*.'?^^^V''"*^•"■''^ 


•  (v!;t,.ito^.  ;.Trs; 


"f 


THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 

SCHOOL  OF  LAW 


THE  LAW 


OF 


INTERSTATE  COMMERCE 


AND    ITS 


FEDERAT.  KEGULATION 


BY 

FREDERICK  K  JUDSOT^J" 


Of  the  St.  Louis  Bar 


SECOND  EDITION 


CHICAGO 

T.  II.  FLOOD  &  CO. 
1912 


T 

Copyright,  1912 

BY 

;T.  H.  FLOOD  AND  COMPANY 


STATE  JOURNAL  PRINTINa  COMPANY. 

PlUNTEES  AND  StEREOTYPERS, 
MADISON,  WIS, 


PKEFAOE. 


The  first  edition  of  this  book  was  published  in  May,  1905, 
and  a  supplement  thereto  in  August,  1906,  after  the  adoption 
of  the  amendments  of  that  year  to  the  Interstate  Commerce 
Act.  To  such  an  extent  has  the  law  of  Interstate  Commerce 
and  its  federal  regulation  been  developed  and  expanded  during 
the  intervening  years,  not  only  through  judicial  construction, 
but  through  far-reaching  statutory  changes,  that  a  new  edition 
is  now  required  not  only  because  much  must  be  added,  but  also 
for  the  further  reason  that  much  of  what  was  then  declared  to 
be  the  law  must  of  necessity  be  rewritten. 

It  was  said  in  the  preface  to  the  first  edition  that  it  was  the 
purpose  of  the  book  to  present  in  a  compact  form  the  law  of 
interstate  commerce  as  declared  by  the  court  since  the  adoption 
of  the  constitution,  and  also  as  enacted  by  Congress  and  ap- 
plied by  the  Interstate  Commerce  Commission  in  the  direct 
exercise  of  the  power  of  federal  regulation,  and  that  the  book 
was  written  under  the  conviction  that  the  direct  federal  regu- 
lation of  interstate  commerce  had  come  to  stay. 

It  was  also  said  that  the  rules  declared  by  the  Interstate 
Commerce  Commission  in  what  were  then  tlie  eighteen  years 
of  its  existence,  though  its  powers  had  been  in  some  respects 
curtailed  by  the  judicial  construction  of  the  Interstate  Com- 
merce Act,  were  a  body  of  administrative  railroad  law  which 
was  properly  included  in  such  a  treatise,  as  every  phase  of  the 
complex  adjustment  of  railway  rates  had  been  considered  by 
the  Commission,  and  its  rulings  in  this  infinite  variety  of  cases 
had  a  permanent  value  in  the  solution  of  the  transportation 
problems  of  the  future.  At  the  present  time  it  must  be  said 
that  the  powers  of  the  Interstate  Commerce  Commission  have 
been  greatly  enhanced,  not  only  by  legislation,  but  also  by  judi- 
cial construction.  It  now  exercises  powers,  not  only  of  investi- 
gation and  administration,  but  also  those  that  are  essentially 


IV  PREFACE. 

judicial  and  legislative.  It  passes  on  and  determines  the  rea- 
sonableness of  rates  and  other  regulations  of  carriers,  and  fixes 
their  limitations  for  the  future  ;  and  these  administrative  orders 
within  the  limits  of  their  powers  are  not  subject  to  judicial 
revicAv.  It  is  the  more  important,  therefore,  tlmt  the  rulings 
of  this  body  should  be  formulated,  so  far  as  may  be,  for  the 
guidance  of  our  vast  transportation  interests,  both  of  railroads 
and  the  public. 

In  the  preface  to  the  first  edition  reference  was  made  to  the 
then  agitation  for  the  amendment  of  the  Interstate  Commerce 
Act.  During  the  period  which  has  elapsed  from  that  publica- 
tion the  legislation  of  1C06  and  1910  has  in  effect  given  to  the 
Commission  all  the  increased  powers  that  were  then  the  sub- 
ject of  agitation. 

As  was  said  in  the  preface  to  the  first  edition,  in  view  of  the 
informality  of  the  procedure,  as  well  as  for  convenience  and 
in  the  interest  of  brevity,  the  citations  of  the  Commission's 
cases  have  been  by  the  book  and  page  of  the  reports  without 
the  names  of  the  parties.  It  is  also  true  that  the  reports  of 
the  Commission,  while  of  permanent  value,  are  not  adjudica- 
tions in  the  ordinary  sense  of  the  term,  in  that  they  deal  with 
temporary  conditions  which  may  be  transitory,  and  the  ad- 
ministrative orders  are  effective  for  only  a  period  of  two  years. 
It  has  been  the  aim  to  note  those  rulings  which  are  of  value  as 
precedents  for  the  determination  of  similar  controversies. 

"While  the  book  is  entitled  "The  Law  of  Interstate  Commerce 
and  Its  Federal  Regulation, ' '  and  deals  in  Part  I  with  the  law 
of  interstate  commerce  as  declared  by  the  courts,  the  remain- 
ing parts  of  the  book  are  taken  up  vvith  the  actual  regulation 
of  interstate  commerce  through  the  acts  relating  to  transporta- 
tion and  with  the  Anti-Trust  Act  which,  as  declared  by  the 
Supreme  Court,  was  enacted  to  protect  interstate  commerce 
against  unlawful  combinations.  The  enforcement  of  this  act  is 
so  closely  allied  to  the  subject  of  the  regulation  of  commercial 
intercourse  that  it  seemed  properly  included  in  a  treatise  of 
this  character. 

The  law  of  interstate  commerce  has  through  recent  legisla- 
tion of  Congress  a  still  broader  scope,  illustrated  in  such  acts 
as  the  Pure  Food,  Meat  Inspection,  and  National  Quarantine 


PREFACE.  V 

Acts,  and  llio  liko,  wliicli  arc  cnaclcil  in  what  for  want  of  a 
better  term  niay  hr  classed  as  police  rcpjiilation  under  the  In- 
terstate Cominercc  clause.  Tlic  discussifui  of  this  Ic^'islation 
seemed  apart  from  the  sfojx'  j)l;inniMl  )<»r-  this  work,  and  only 
incidental  reference  has  been  made  thereto.  On  the  other  hand 
the  questions  relating  to  the  concurrent  powers  of  the  State 
and  Pcdei-al  Government  in  inlci-state  commerce,  and  the  fed- 
eral control  of  state  regulation  of  state  traffic  of  interstate  car- 
riers conducted  Avith  tlie  same  equipment  and  same  employes 
as  interstate  traffic,  seemed  properly  included  in  a  treatise  on 
the  federal  regulation  of  interstate  commerce. 

I  take  great  pleasure  in  acknowledging  ray  services  to  ^Nlr. 
J.  Edgar  Smith,  of  the  Washington,  D.  C.  bar,  now  associated 
with  the  Interstate  Commerce  Commission,  in  valuable  sugges- 
tions and  assistance,  especialh^  in  the  annotation  of  Section  1 
of  the  Interstate  Commerce  Act,  also  to  Mr.  J.  Porter  Henry, 
of  the  St.  Louis  bar,  for  very  efficient  services  in  revision,  cor- 
recting proofs,  and  in  the  difficult  and  tedious  work  of  prepar- 
ing index. 

St.  Louis,  Dec.  1911. 


TABLE  OF  CONTENTS. 


PART  I. 


CHAPTER  I. 
INTERSTATE  COMMERCE  UNDER  THE  FEDERAL  CONSTITUTION. 

§     1.    The  commerce  clause  in  the  constitution 3 

2.  Power  of  congress  in  foreign  commerce  and  with  the  Indian 

tribes  distinguished 5 

3.  The  preference  clause  in  the  constitution 6 

4.  The  prohibition  of  tax  or  duty  on  exports  from  state 7 

5.  Federal  sovereignty  in  interstate  commerce 8 

6.  Gibbons  v.  Ogden 11 

7.  What  is  commerce 12 

8.  What  is  not  commerce 15 

9.  Insurance  and   commerce 16 

10.  What  are  the  subjects  of  commerce 17 

11.  Wild  game  and  fish  as  subjects  of  commerce 20 

12.  Natural  oil  and  gas  as  subjects  of  commerce 22 

13.  The  commerce  clause  and  the  admiralty  jurisdiction 23 

14.  Erie  Canal  subject  to  admiralty  jurisdiction 25 

15.  Jurisdiction  of  federal  courts  in  admiralty  cases 26 

16.  State  corporations  in  interstate  commerce 26 

17.  When  transit  ends;  the  original  package  in  interstate  com- 

merce     30 

18.  The  Wilson  Bill  of  1890 32 

19.  Limitations  of  state  control  of  liquor  traffic 33 

20.  A  state  cannot  tax  interstate  commerce 34 

21.  But  a  state  can  tax  the  property  employed  in  interstate  com- 

merce    * 35 

22.  State  power  of  taxation  of  corporations  engaged  in  interstate 

commerce  summarized 37 

CHAPTER  II. 
THE  CONCURRENT  AND  EXCLUSIVE  POWERS. 

§  23.     The  concurrent  and  exclusive  powers  distinguished 38 

24.  The  supreme  court  on  the  thi-ee  classes  of  commerce  cases. .  40 

25.  The  concurrent  state  power 40 

26.  The  state  power  as  to  interstate  telegraph  companies 41 


Vlll  TABLE    OF    CONTENTS. 

27.     Concurrent  power  in  interstate  railroad  transportation 42 

25.     State  Sunday  laws  and  interstate  traffic 44 

29.  State  laws  as  to  qualifications  of  employes  and  safety  of  pub- 

lic     44 

30.  State  laws  concerning  separation  of  races  in  interstate  traflSe  45 

31.  Limitation  of  state  power  in  stoppage  of  through  trains....  46 

32.  State  regulation  of  contractual  relations  of  interstate  rail- 

road and  shippers 48 

33.  State  regulation  under  rules  of  common  law  in  state  courts  49 

34.  The  concurrent  jurisdiction  in  live  stock  inspection  laws. .. .  50 

35.  Effect  of  congressional  legislation  upon  concurrent  power  of 

state    51 

36.  State  quarantine  laws 53 

37.  Freedom  of  interstate  commerce 54 

38.  Congressional  inaction  in  foreign  and  interstate  commerce 

distinguished 57 

39.  Attachment  of  foreign  railroad  cars 58 

40.  Rulings  of  the  state  courts  on  the  commerce  clause 59 

CHAPTER  III. 
THE  FEDERAL  REGULATION  OF  INTERSTATE  COMMERCE. 

§  41.     The  beginning  of  federal  regulation 63 

42.  The  railroad  act  of  1866 64 

43.  The  state  control  of  local  business  of  interstate  railroads...  66 

44.  State  regulation  of  railways  in  the  United  States 67 

45.  Governmental  regulation  of  railways  in  England 68 

46.  The  common  law  in  interstate  commerce 69 

47.  Federal  and  state  courts  in  the  federal  regulation  of  inter- 

state commerce 71 

48.  Federal  cause  of  action  in  the  state  courts 74 

49.  Genesis  of  the  Interstate  Commerce  Act 75 

50.  Passage  of  the  Interstate  Commerce  Act 76 

51.  Successive  amendments  of  the  Interstate  Commerce  Act 77 

52.  Enlarged   powers   and   jurisdiction   of   the    Interstate   Com- 

merce Commission gl 

53.  The  commerce  court ^^ 

54.  Regulation  of  bridges  and  ferries  over  navigable  rivers....  86 

55.  Regulation  of  telegraph  and  telephone  companies 89 

56.  The  release  of  the  federal  regulating  power 91 

57.  Regulation  by  the  delegation  of  power 92 

58.  Additional  acts  of  congress  in  the  regulation  of  commerce..  94 

59.  The  Department  of  Labor  and  Commerce 97 


TABLE   OF    CONTENTS. 


IX 


CIIArTER  IV. 

THE  FEDERAL  POWER  OF  REGULATION   L\  INTERSTATE 
COMMERCE. 

§  GO.     No  Judicial  formulation  of  extent  of  power 100 

61.     The  supremacy  of  federal  regulation 101 

62      Federal  regulation  ot    employes  performing  both  intrastate 

and  interstate  service ■^"- 

63.  The  federal  regulating  power  and  state  corporations 103 

64.  .Limitations   upon  the   federal   authority   in   interstate  com- 

merce     

65.  Prohibition  as  a  means  of  regulation 106 

66.  Regulation  of  commerce  through  the  taxing  power 107 

67.  The  federal  power  of  granting  corporate  charters lOS 

68.  Federal  incorporation  as  a  means  in  the  exercise  of  the  com- 

merce power   ^^" 

69.  Relation  of  the  states  to  federal  corporations Ill 

70.  The  requirement  of  federal  franchise  for  business  corpora- 

tions in  interstate  commerce H-^ 

71.  The  development  of  the  latent  federal  power  in  the  regula- 

tion of  commerce 


115 


CHAPTER  V. 

BUSINESS  COMBINATIONS  IN  INTERSTATE  COMMERCE. 

72.  The  demand  for  federal  regulation  of  business  combinations  117 

73.  The  Anti-Trust  Act  of  1 S90 119 

74      Restraint  of  trade  in  interstate  commerce  under  the  common 

^.^^,  120 

75.  Constitutionality  of  the  act 121 

76.  Railroads  included  'n  the  act 122 

77.  A  r-^asonable  construction  and  reasonable  restraints  of  trade 

distinguished     ^-^ 

7S.     Direct  and  incidental  restraint  of  trade 125 

79.  Suppression  of  competition  must  be  substantial  to  be  a  re- 

straint of  trade   128 

80.  The  modern  law  of  restraint  of  trade 129 

81.  Illegal  combinations  in  interstate  commerce 130 

82.  Complete  suppression  of  competition  not  essential 131 

83.  Monopoly  within  the  meaning  of  the  act 132 

84.  No  application  to  commerce  within  a  state 134 

85.  State  holding  companies 135 

86.  Restrictive  sales  in  interstate  conmierce 137 

87.  No  distinction  as  to  commodities  subject  of  contract 139 

b 


S  TABLE    OF    CONTENTS. 

CHAPTER  YI. 

LABOR  COMBINATIONS  IN  INTERSTATE  COMMERCE. 

5  8S.     The  labor  legislation  of  congress 142 

S9.     Regulation  of  interstate  commerce  in  relation  to  labor 143 

90.  The  courts  on  labor  combinations  in  relation  to  interstate 

commerce     14o 

91.  Interstate  commerce  and  railroad  labor  organization 145 

92.  Business  boycotts  in  interstate  commerce 147 

93.  Strikes  and  boycotts  by  employes  of  interstate  carriers 148 

94.  The  law  of  conspiracy  in  interstate  commerce 151 

95.  Distinguished  from  common-law  conspiracy 154 

96.  Interstate  commerce  in  relation  to  employes  therein 155 

97.  "Picketing"  and  "soliciting"  In  interstate  commerce 157 

98.  The  status  of  interstate  railroad  employes  is  that  of  free 

contract    158 

99.  The  right  of  labor  organization  includes  the  right  of  repre- 

sentation      160 

100.  Injunction  in  interstate  commerce 161 

101.  Contempt  in  United   States  courts 164 

102.  Direct  and  indirect  contempts 165 

103.  Criminal  and  civil  contempts 166 

104.  Conspiracy  and  contempt 169 

105.  Mandatory  injunctions  in  interstate  commerce 169 

CHAPTER  VII. 

FEDERAL  CONTROL   OP   STATE   RAILROAD   REGULATION. 

I  106.  State  regulation  of  railroads  through  state  commissions...   171 

107.  Assessment  of  expense  of  state  regulation  upon  railroads..   172 

108.  State  regulation  not  dependent  upon  state  incorporation..  173 

109.  State  cannot  regulate  any  part  of  interstate  rates 174 

110.  Competitive  effect  of  intrastate  rates  upon  interstate  rates  175 

111.  The  fourteenth  amendment   177 

112.  Federal  review  of  state  regulation  of  railroads 178 

113.  The   federal  jurisdiction  must  be  invoked  on   substantial 

grounds    179 

114.  Jurisdiction  of  the  federal  courts  not  limited  by  state  legis- 

lation       180 

115.  Injunctions  against  state  officials  not  violative  of  the  elev- 

enth amendment   181 

116.  The  regulating  orders  of  state  commissions  legislative,  not 

judicial  182 

117.  Procedure  in  federal  review  of  state  legislation 183 

118.  Temporary  injunctions  in  federal  control  of  state  legisla- 

tion      185 


TABLE   OP    CONTENTS.  -^' 

119.  Tomporary  injunction  under  act  of  1910 l^''- 

120.  Reasonableness  and  ronfiseation  in  regulation  of  rates....   1S7 

121.  State  rates  determined  without  reference  to  interstate  traffic  189 

122.  The  supreme  court  on  state  regulation 190 

123.  Schedules  of  rates  and  special  rates 1^1 

124.  The  valuation  of  railroad  property  in  state  regulation 193 

125.  The  apportionment  of  railroad  property  in  state  regulation  195 

126.  Confiscation  in  state  regulation;  how  proved 196 

127.  Rate  of  profit  necessary  to  avoid  charge  of  confiscation 199 

128.  Protection  of  the  carrier  against  discriminating  state  regu- 

lation       200 

129.  The  state  power  of  regulation  not  limited  to  rates 202 

130.  The  state  anti-trust  laws  and  the  fourteenth  amendment. .  205 

131.  Classification  in  state  railroad  legislation 207 


TAKT  II. 


INTERSTATE  CO:\DrERCE  ACT. 
Section  1. 

132.  Section  1  of  the  Act  of  1887 212 

133.  Section  1  as  amended  by  Act  of  June  18,  1910 213 

134.  Amendments  to  the  section 217 

135.  All  of  interstate  commerce  not  included 218 

136.  Parties  subject  to  the  act 220 

137.  Common  carriers  under  the  act 220 

138.  Express  companies  under  the  act 222 

139.  Sleeping  car  companies 223 

140.  Under  common  control,  management,  or  arrangement  for  a 

continuous  carriage    224 

141.  Transportation  through  a  state 226 

142.  Territorial    transportation    220 

143.  Interstate    electric    railroads 227 

144.  Receivers,  lessees,  and  purchasers  pendente  lite 228 

143.     Foreign  commerce   22S 

146.  Place  of  incorporation  of  carrier  immaterial 230 

147.  The  intention  of  interstate  shipment  not  sufficient 230 

148.  All  instrumentalities  of  shipment  or  carriage 231 

149.  Delivery,  cartage,  storage,  and  demurrage  charges 231 

150.  Commerce  court  on  terminal  facilities  and  plant  facilities..   233 

151.  Bulk  grain  storage  as  part  of  transportation 231 

152.  The  amendments  of  section  as  to  accessory  charges 235 

153.  Carriage  of  live  stoci\  and  perishable  property 235 

154.  Refrigeration   in   transit    238 

155.  Private  cars  240 


XU  TABLE   OF    CONTENTS. 

156.  Prohibition  of  passes 241 

157.  The  commodities  clause 2A2 

158.  Switch  connections    244 

159.  The  establishment  of  through  routes 246 

160.  Classifications,  regulations,  and  practices 246 

ICl.  Charges  must  be  reasonable  and  just 246 

162.  Practical  difficulties  in  the  enforcement  of  reasonableness 

in   rates    247 

163.  Standard  of  reasonableness  under  state  statutes 249 

164.  Standard  of  reasonableness  under  the  act 249 

165.  The  power  of  the  commission  in  fixing  rates 250 

166.  No  power  in  the  courts  to  fix  rates 251 

167.  The  federal  courts  on  reasonableness  of  railroad  rates....  252 

168.  The  value  of  railroad  property  as  a  basis  for  rate  regulation  254 

169.  The  unearned  increment  in  valuation  of  railroad  property 

in  rate  regulation   255 

170.  The  relation  of  railroad  rate  to  investment  of  earnings  in 

property    256 

171.  Reasonableness  under  sections  1  and  3 256 

172.  Consideration  of  reasonableness  in  the  courts 257 

173.  Rulings  of  the  commission  upon  the  reasonableness  of  rates  258 

174.  Limitation  of  the  commission's  power  in  fixing  rates 259 

175.  Presumptions  of  reasonableness  from  established  rates....  260 

176.  Burden  of  proof   261 

177.  Considerations  in  the  determination  of  reasonableness....  261 

178.  What  is  a  reasonable  rate 262 

179.  Res  judicata  with  respect  to  rates 263 

180.  Through  rates  and  local  rates 264 

181.  Reasonableness  in  commutation  rates 265 

182.  Relation  of  interstate  to  state  rates 266 

183.  Rates  as  affected  by  development  of  country 267 

184.  Commission  on  the  interdependence  of  rates 267 

185.  The  commerce  court  on  interdependence  of  rates 268 

186.  Reasonableness  of  rates  as  dependent  on  character  of  traffic  269 

187.  Distance  as  a  factor  in  rates 270 

188.  The  commission  on  comparison  of  rates 271 

189.  Reasonableness  of  rates  as  relating  to  cost  of  service  and 

needs  of  the  shii)per 271 

190.  Reasonableness    and    proportion 273 

191.  The  commission  on  rate  wars  and  reasonableness  of  rates. .  274 

Section  2. 

§  192.  Section  2.     Unjust  discrimination  defined  and  forbidden..  27S 

193.  Origin  of  the  section 276 

194.  Purpose  of  the  section 277 

195.  Effectiveness  of  the  section.     The  Act  of  February  19,  1903  278 

196.  Common  law  as  to  discriminations.- 279' 


TABLE   OF    CONTENTS.  XUl 

197.  Just  and  uiljust  discrimination  at  rcmmon  law 2S1 

198.  Discrimination  in  cliarge  based  upon  differences  in  service 

not  discriminative    284 

199.  Circumstances  and  conditions  of  tlirough  traffic  and  local 

traffic  are  dissimilar 28^ 

200.  Competition  of  carriers  docs  not  mal<e  circumstances  dis- 

similar under  section  2 285 

201.  The  party  rate  case 287 

202.  Wholesale  and  retail  rates  in  freight  traffic 287 

203.  Wholesale    rates    in    freight    and    passenger    traffic    distin- 

guished      289 

204.  Discrimination  not  unjust  when  based  on  special  service. .   290 

205.  Carload  and  less  than  carload  rates 291 

206.  Discrimination  in  aiiplication  of  carload  rates 292 

207.  The  supreme  court  on  forwarding  agents  in  carload  rates.   293 

208.  Discrimination  in  carload  rates 294 

209.  Cargo  rates  discriminative 294 

210.  Different  forms  of  discrimination 295 

211.  Discrimination  in  restricted  rates 296 

212.  Discrimination  through  industrial  tap  lines  and  plant  fa- 

cilities     297 

213.  Discrimination  through  interest  in  connecting  company. .   299 

214.  Discrimination  by  carrier  in  favor  of  itself  as  a  shipper. . .   299 

215.  Discrimination  in  storage  of  goods,  etc 301 

216.  Stopjiage   in   transit  privileges 302 

217.  Unjust  discrimination  through  abuse  of  stoppage  in  transit 

privileges   303 

218.  Unjust  discrimination   in   passenger   service 304 

219.  Giving  passes  to  shippers  prohibited 305 

220.  Unjust  discrimination  in  telephone  service 306 

221.  Application  of  the  section 306 

222.  Retention  of  overcharge 308 

223.  Enforcement  of  the  section 308 

224.  Connecting  carrier  not  responsible   for   discrimination   by 

initial  carrier  310 

2i5.     Effect  of  rebates  upon  contracts  of  affreightment 310 

226.     Discrimination  in  allowance  to  private  transfer  companies  311 

Section  3. 

§  227.     Section  3.     Undue  or  unreasonable  preference  or  advantage 

forbidden    313 

228.  Origin  of  the  section 314 

229.  Relation  to  sections  1  and  2 315 

230.  Preferences  of  localities  enforced  by  competition  are  not 

unjust    316 

231.  Application  of  the  competition  rule 318 

232.  Whether  competition  is  controlling  is  a  question  of  fact...  319 


XIY  TABLE    OF    CONTEXTS, 

233.  Discrimination  between  domestie  and  foreign  traffic  in  im- 

port and  export  rates  not  unjust  preference 320 

234.  Milling  in  transit  and  export  trade 322 

235.  Application  of  the  import  rule  to  intermediate  points  on 

the  line 322 

236.  Competition   created   by  carriers 323 

237.  The  "basing  point  system"  not  illegal 324 

238.  Basing  points  not  exempt  from  regulating  power  of  com- 

mission      323 

239.  Grouping  of  rates 326 

240.  Qualilleations  in  the  application  of  the  competition  rule..   329 

241.  Recognition  of  natural  advantages  of  localities  not  an  un- 

just preference  331 

242.  Competing  cities  on  opposite  banks  of  rivers 332 

243.  Differentials  between  competitive  cities 333 

244.  Preference  in  demurrage  charges 335 

245.  Uniform  demurrage  rules  recommended 335 

24G.     Different  forms  of  undue  preference 336 

247.  Undue  preference  In  allowance   for   grain  elevator  service  337 

248.  Undue  preference  in  wharfage  rights 339 

245.     Undue  preference  in  management  of  freight  stations  and 

warehouses    340 

250.  Undue  preference  in  car  service 341 

251.  The  commission's  regulations  of  coal  car  service  sustained  343 

252.  Discrimination  by  carrier  in  its  own  favor 346 

253.  Undue  preference  in  private  cars 346 

254.  Demurrage  and  other  charges  on  privately  owned  cars....  348 

255.  The  commerce  court  on  demurrage  charges  upon  private 

cars    348 

256.  Exclusive  use  of  excursion  or  sleeping  cars  of  one  owner.   349 

257.  Leasing  of  cars  does  not  carry  right  of  exclusive  use  by 

owner    349 

258.  Stoppage  in  transit  privileges 350 

259.  Reconsignment  charges    351 

260.  Transit  privileges    351 

261.  Interference    by    state    railroad    commission    with    propor- 

tional tariff  rates  353 

262.  Sidetracks  and  connections 353 

263.  Undue  preference  in  denying  shippers  the  choice  of  route. .  355 

264.  Undue  preference  in  arbitrary  division  of  territory 356 

265.  Rate  wars  and  undue  preferences 357 

266.  Discrimination  in  kinds  of  traffic 358 

267.  Preferences  against  traffic — must  Involve  injury 360 

268.  A  reasonable  regulation  of  carload  weights  not  preferential  360 

269.  Differentials  between  grain  and  grain  products 361 

270.  The  commission  not  concluded  by  ruling  of  state  commis- 

sion      362 

271.  Discrimination  in  mode  of  shipment 362 


TABLE   OF    CONTEXT?.  XV 

272.  Classification    304 

273.  Uniform  classification  recommcndod   3^34 

274.  Consultation  of  carriers  in   classification   not  illegal   com- 

bination     366 

275.  Undue  preference  in  classification 366 

276.  Power  of  commission  in  correcting  classification 36S 

277.  Reasonable  regulations  in   classifications 36f> 

278.  Facilities  for  interchange  of  traffic 370 

279.  Discrimination    in    exacting   prepayment    from    connecting 

carriers  not  unjust  discrimination 371 

280.  Discrimination  in  exacting  prepayment  from  shippers 372 

281.  State  control  of  interchange  of  interstate  traffic 372 

282.  State  and  municipal  control  of  terminals 373 

283.  The  charging  of  local  rates  not  an  unjust  discrimination..   374 

284.  The  right  of  exclusive  through  routing 37o 

285.  Contract  rights  of  trackage 370 

280.     Rights  of  connecting  carriers  as  to  milling  in  transit  privi- 
leges     377 

287.     Exclusive  contracts  for  station  facilities  not  unlawful 377 

Section  4. 

§  288.  Long  and  short  haul  provisions 379 

289.  History  of  the  section  and  its  amendments 380 

290.  Construction  of  the  section  prior  to  the  amendment  of  1910  381 

291.  "Over  the  same  line" 382 

292.  Application  to  the  commission 383 

293.  The  burden  of  proof 383 

294.  Construction  of  section  by  commission  and  application  to 

different  classes  of  rates 3S4 

295.  Ruling  of  commission  as  to  export  and  import  rates  under 

section    385 

290.     The  commission  on  application  for  relief  under  the  fourth 

section    386 

297.     The  five  trade  zones  for  transcontinental  trafiBc 387 

Section  5. 

§  298.  Pooling  of  freight  and  division  of  earnings  forbidden 390 

299.  Construction  of  section 390 

300.  Controlling  through  routing  by  initial  carrier  is  not  pooling  391 

301.  Agreements  not  within  the  prohibition 392 

302.  The  relation  of  the  section  to  the  Anti-Trust  Law  of  1890. .  393 

303.  Pooling  as  a  defense  to  action  of  the  carrier 39-1 

Section  6. 

§  304.     Section  6  as  amended 395 

303.     History  and  amendment  of  the  section 398 

306.     EL'ect  of  publication 399 


XTl  TABLE    OF    COXTENTS. 

307.  The  published   rate   conclusive 401 

308.  Failure  to  post  rate  lu  stations 402 

309.  Claims  for  misrouting 403 

310.  Status  of  carriers,  as  shippers  or  consignees 403 

311.  What  is  included  in  schedules 406 

S12.     "What  is  sufficient  publication  and  filing 407 

313.  Joint  tariffs  and  through  rates 408 

314.  Responsibility  for  through  rates 409 

315.  Published  joint  rates  must  be  duly  authorized 410 

316.  The  commission's  power  of  modification  as  to  filing  of  tar- 

iffs     411 

Section  7. 

§  317.     Continuous  carriage  of  freights  from  place  of  shipment  to 

place  of  destination 413 

313.     Judicial  application  of  section 413 

Section  8. 

§  319.  Liability  of  common  carriers  for  damages 414 

320.  Right  of  action  based  on  the  statute 414 

321.  Plaintiff  must  show  injury 41.5 

322.  Allowance  of  attorney's  fee  as  costs 416 

323.  Limitation  of  actions 416 

324.  Assignability  of  claims 417 

325.  The  jurisdiction  of  federal  courts 417 

326.  Jurisdiction  of  the  federal  courts  in  eqaity  under  the  act. .  418 

327.  Jurisdiction  in  equity  for  protection  of  interstate  commerce  420 

Section  9. 

§  328.  Right  of  election  in  appealing  to  commission  or  the  court..  421 

329.  The  limitation  of  the  right  of  private  action  in  the  courts. .   421 

330.  Jurisdiction  in  equity  under  the  act  as  amended 423 

331.  Action  for  damages  on  account  of  discrimination 426 

332.  Judicial  application  of  section 428 

Section  10. 

§  333.  Penalties  for  violations  of  act  by  carriers..... 430 

334.  Amendments  to  the  section 432 

335.  The  amendment  of  1903 432 

336.  Illegal  combinations  under  section  10 433 

337.  The  incidental  interference  with  commerce  by  a  peaceable 

strike  not  a  violation  of  the  section 434 

338.  Construction  of  the  statute 435 

339.  Removal  of  indicted  persons  to  other  districts  for  trial. . . .  436 

340.  Limitation  of  criminal  prosecution  under  the  act 437 


TABLE  OF  CONTENTS.  xVU 


SECTION  11. 

341.  Interstate  Commerce  Commission— How  appointed 43^? 

342.  The  organization  and  membersliip  of  the  commission 438 


Section  12. 

?j  13.  General  investigating  powers  of  rommission 440 

344.  Amendments  of  the  section 442 

345.  Compelling  of  self-incriminating  testimony 442 

346.  Corporations  not  included  in  immunity  of  witness 444 

347.  Immunity  acts  of  February  23,  1903  and  June  13,  1906 447 

348.  Corporate  official  compelled  to  produce  corporate  books  con- 

taining personally  incriminating  matter 44S 

349.  Probative  effect  of  self-incriminating  testimony 449 

330.     Immunity  is  limited  to  the  subject  of  testimony 449 

351.     Power  of  the  court  to  enforce  testimony  before  the  commis- 
sion sustained 


449 


35 


Relevancy  of  testimony  before  the  commission 4.-j0 


53.     Limitation  of  the  power  of  the  couimission  to  enforce  testi- 
mony 

354.  Investigating  powers  of  a  grand  jury  in  the  United  States 

courts    

355.  General  powers  of  the  commission 


Section  13. 

§  35G.     Complaints  to  commission— How  and  by  whom  made— How 

served  upon  carriers 

357.     The  amendment  of  1910.. 


431 


432 
452 


454 
455 


358.     Procedure  before  commission- 


Parties 455 


359. 
360. 


Pleadings  and  proofs 4d  < 

Demand  for  reparation  must  be  specifically  stated 438 

43S 


361.     Burden  of  proof. 

362. 

363. 


Production  of  books  and  papers 4.^9 

The  rulings  of  the  commission  as  precedents 460 


Section  14. 

364.     Commission's  report  of  investigation 461 

3C3.     Amendment  of  the  section 461 

366.  The  changed  relation  of  the  commission  to  the  courts 46- 

367.  Procedure  before  the  commission 462 

368.  Reports  of  decisions *^4 


XVIU  TABLE    OF    CONTENTS. 


Section  15. 

§  369.     Section  15  as  amended  in  1910 466 

370.  The  amendments  of  1906  and  of  1910 470 

371.  The  constitutionality  of  the  amendment  of  1906  sustained.   471 

372.  The  enlarged  powers  of  the  commission  under  section 472 

373.  The  establishment  of  through  routes 473 

374.  Switch  connections  and  through  routing  between  steam  and 

electric  railway   474 

375.  The  two  year  limitation  of  commission's  orders 475 

376.  Selection  of  the  route  by  the  shipper 477 

377.  The  advanced  rate  cases  of  1910 477 

378.  Jurisdiction  over  contracts  of  carriers 478 

379.  Allowances  by  carriers  for  shipper's  services  must  not  in- 

volve  undue   preference 479 

380.  The  powers  of  the  commission  construed 480 

Section  16. 

§381.  Section  16.     Enforcement  of  orders 48? 

382.  The  amendments  of  1906  and  1910 485 

383.  The  saving  of  the  right  of  trial  by  jury 486 

384.  The  time  limitations  of  actions  for  reparation 487 

385.  Commission  must  find  reasonable  rate  before  ordering  rep- 

aration       487 

386.  Jurisdiction  of  commission  in  awarding  reparation 488 

387.  The  jurisdiction  of  the  commission  in   awarding  general 

damages    489 

388.  Jurisdiction  of  federal  and  state  courts  in  reparation  actions  491 

389.  Prima  facie  effect  of  commission's  orders  in  reparation, ,..  492 

390.  The  procedure  in  actions  in  court 493 

391.  The  judicial  review  of  the  commission's  orders 494 

392.  The  jurisdiction  of  the  circuit  courts 495 

393.  The  right  of  appeal  under  amended  act 495 

394.  Jurisdiction  of  the  courts  to  review  the  orders  of  the  com- 

mission      495 

395.  The  commerce  court  on  parties  entitled  to  appeal  from  com- 

mission's orders 497 

396.  The  finality  of  the  order  of  the  commission 498 

Section  16a. 
§  397,    Section  16a  499 

Section  17. 
J  398.    Interstate  commission — Form  of  procedure 500- 


TABLE    OF    CONTENTS.  XIX 


Sectign  18. 

S  399.     Salaries  of  commissioneis,  secretary,  etc 501 

400.     Expenses  of  the  commission 501 


Section  10. 

401.  Principal  office  of  the  commission,  etc 503 

402.  Practice  of  commission  in  hearings 502 


Section  20. 

403.  Section  20  as  amended 504 

404.  The  amendments  of  1906  and  191 0 508 

405.  Railroads  not  subject  to  section  20  of  the  act 508 

406.  The  enforcement  of  reports  by  mandamus 509 

407.  The  liability  of  the  initial  carrier 509 

408.  The  employment  of  special  examiners 510 

409.  The  effectiveness  of  the  publicity  provisions  of  the  section  510 


Section  21. 

§  410.    Section  21  as  amended 512 

411.    The  annual  reports  of  the  commission 512 


Section  22. 

§  412.  Persons  and  property  that  may  be  carried  free  or  at  reduced 

rates,  etc 513 

413.  Amendments  to  section 514 

414.  The  section  illustrative  and  not  exclusive 515 

415.  The  section  permissive  only 516 

416.  Withdrawal  of  commutation  tickets 516 

417.  The  commission  on  excursion  rates 517 

418.  The  jurisdiction  of  the  commission  as  to  commutation  rates  518 


Section  23. 

§  419.     Jurisdiction  of  United  States  courts  to  issue  writs  of  man- 
damus     519 

420.  Application  of  section  to  car  shortage 519 

421.  Commission  to  consist  of  seven  members;  terms;  salaries. .  520 


XX  TABLE    OF    CONTENTS. 


THE  ELKINS'  ACT. 

§  422.     The  Elkins  Act  as  amended 522 

423.  The  enactment  and  amendments  to  the  act 526 

424.  The  repealing  clause  of  the  Hepburn  Act  did  not  bar  prior 


offenses 


527 


425.  The  validity  and  enforcibility  of  the  act 528 

426.  Participation  in  the  joint  rate 528 

427.  The  unit  of  offenses  under  the  act.     The  Standard  Oil  Com- 


pany of  Indiana  case. 


529 


428.  Prior  contracts  and  want  of  criminal  intent  no  defenses...  530 

429.  Conspiracy   in   rebating 531 

430.  What  are  rebates 532 

431.  Requisites  of  indictment  under  the  act 533 

THE  ANTI-TRUST  ACT  OF  1890. 

Section  1. 

§  432.  Section  1  of  the  act 535 

433.  Constitutionality  and  scope  of  the  act 535 

434.  Interstate  transportation  is  subject  to  the  act 536 

435.  Unlawful  combinations  in  commerce  other  than  transporta- 

tion    537 

436.  The  California  Tile  Trust  case 53S 

437.  The  Tennessee,  California  and  Ohio  Coal  cases 538 

438.  The  Chicago  Meat  Trust  case 539 

439.  The  Washington   Shingle  Trust   case 540 

440.  Incidental  restraint  of  trade  not  violative  of  the  act 540 

441.  The  Kansas  City  Live  Stock  Exchange  cases 540 

442.  The  Chicago  Board  of  Trade  Bucket  Shop  case 542 

443.  The  Calumet  &  Heckla  Mining  Company  case 542 

444.  Combinations  held  to  be  within  the  act 543 

445.  Agreements  held  not  within  the  act 544 

446.  The  Standard  Oil  case 545 

447.  The  American  Tobacco  case    546 

448.  The  Powder  Trust  case 547 

449.  Labor  combinations  548 

450  Emplovment  of  common  agency  not  necessarily  within  the 

act' 549 

451.  Acts  done  outside  of  the  United  States  not  within  the  act. .  549 

452.  Patent  monopoly  not  within  the  act 550 

453.  Secret  formula  contracts  under  the  act 551 

Section  2. 

§  454.     Section  2  of  the  act 553 

455.     Criminal   procedure   under   the   act— Sufficiency   of   indict- 
ments      553 


TAB1>K    OF    CONTKN'TS.  iil 

a:,G.  The  Chicago  :Meat  Trust  indictment 55.") 

407.  Criminal  conspiracy  under  the  act — The  overt  act 556 

458.  Limitation  of  prosecutions  for  conspiracy 5.o7 

459.  SufTiciency  of  indictment  for  conspiracy 557 

460.  Corporation  indictal)le  for  criminal  conspiracy 558 

461.  Indictability  of  conspiracy  to  run  a  corner 558 

462.  Immunity  of  witnesses  in  criminal  prosecutions  under  act.   559 

463.  The  plea  of  nolo  contendere 5G0 

Sl'XTIOX    3. 

§  464.     Section  3  of  the  act 561 

465.     Territories  and  district  of  Columbia  included 561 

Section  4. 

§  466.  Section  4  of  the  act 562 

467.  Procedure  in  equity  under  the  act 562 

468.  Right  of  statutory  injunction  limited  to  the  government...   563 

469.  The  act  under  the  general  equity  jurisdiction  of  the  court. .   563 

470.  A  state  cannot  enjoin  under  the  act o6t 

471.  Suits  by  the  government  for  dissolution  of  unlawful  com- 

binations,  procedure 56.> 

472.  A  decree  in  the  Standard  Oil  case 566 

473.  A  decree  in  the  American  Tobacco  Co.  case 566 

SfX'TIOX  5. 

§  474.     Section  5  of  the  act 568 

475.     Judicial  application  of  section 568 

Section  6. 

§  476.     Section  6  of  the  act 570 

477.     Enforcement  of  seizure  of  goods  under  section  6 570 

Section  7. 

§  478.  Section  7  of  the  act 571 

479.  The  section  construed  by  the  supreme  court 571 

480.  Plaintiff  must  show  injury 572 

481.  State  is  not  a  "person  or  corporation"  under  this  section.  . .  573 
4S2.  Pleadings  under  section  7 573 

483.  Danbury  Hat  case 574 

484.  Measure  of  damages  under  the  section 574 

485.  The  act  as  a  defense  in  suits  by  alleged  illegal  combinations  575 

486.  No  recovery  under  act  for  violation  of  Interstate  Commerce 

Act   57& 


Xxii  TABI.E   OF    CONTENTS. 

4S7.     Limitations  ' ^^^ 

4SS.     Self-incriminating  testimony  under  the  act 577 

Section  S. 

§  4S9.     Section  S  of  tlie  act 578 

THE  EXPEDITION  ACT. 

§  490.  The  Expedition  Act 579 

491.  The  judicial  application  of  the  act 580 

492.  The  amendment  of  1910 581 

493.  The  construction  of  the  statute 582 

THE  DEPARTMENT  OF  COMMERCE  AND  LABOR. 
§  494.     The  department  of  commerce  and  labor 583 

495.  Section  6  of  the  act 584 

496.  The  remaining  sections  of  the  act 585 


PART  III. 


THE  SAFETY  ACT  OF  1893,  AMENDED  1896. 

Section  1. 

§  497.     Section  1  of  the  act 586 

498.  Railroads  subject  to  the  act 586 

499.  The  common  law  duty  of  the  carrier  in  relation  to  safety 

appliances    588 

500.  Petition  and  procedure  under  the  act 589 

501.  Federal  question  in  suits  under  the  act 589 

502.  The  act  in  the  state  courts 590 

Section  2. 

§  503.  Section  2  of  the  act 591 

504.  Coupler  equipment  under  section  2 591 

505.  Automatic  couplers  of  different  makes 592 

506.  The  meaning  of  "car"  In  section  2 592 

507.  An  absolute  duty  ini])osed  upon  carriers  by  the  act  to  pro- 

vide and  maintain  automatic  equipment 593 

508.  When  cars  are  in  interstate  commerce 594 

Section  3. 

§  509.     Section  3  of  the  act 596 

510.     The  use  of  defective  cars  forbidden 596 


TABLE   OF    CONTENTS.  XXlll 


Section  4, 


§  511.     Section  4  of  the  act ^9" 

512.     Construction  of  section 597 

Section  5. 

§  513.     Section  5  of  the  act 598 

514.    The  delegation   of  power  sustained 598 

Section  6. 

§515.  Section  6  of  the  act 600 

516.  Enforcement  of  act  by  prosecution 600 

517.  The  supreme  court  on  prosecution  for  penalty  under  the  act  601 

518.  The  burden  of  proof  under  the  proviso 601 

Section  7. 

§  519.     Section  7  of  the  act 602 

520.     Discretion  of  the  commission  in  delaying  enforcement  of 

the  act 602 

Section  8. 

§  521.     Section  8  of  the  act 603 

522.  Contributory  negligence  under  the  act 603 

523.  Contributory  negligence  distinguished  from  assumption  of 

rislv    605 

524.  Responsibility  of  carrier  for  cars  out  of  condition 606 

AMENDMENT  OF  1903  TO  SAFETY  ACT. 
§  525.    Amendment  of  1903 607 

SAFETY  ACT  OF  1910. 
§  526.     Safety  Act  of  1910 609 

THE  EMPLOYERS'  LIABILITY  ACT. 

§  527.     The  Employers'  Liability  Act  of  1906 612 

528.  The  act  of  1906  invalid  as  to  interstate  carriers 613 

529.  The  act  of  1900  valid  as  to  the  District  of  Columbia  and 

the  territories    614 

530.  The  Employers'  Liability  Act  of  1908 614 

531.  The  amendatory  act  of  April  5,  1910 616 

532.  The  construction  of  the  act  of  1908 616 


XXiV  TABLE   OF    CONTEXTS. 

533.  The  abolition  of  contributory  negligence  in  connection  with 

the  Safety  Appliance  Act 617 

534.  The  amendment  of  1910 618 

535.  The  amendment  of  1910  not  retroactive 618 

536.  What  is  employment  in  interstate  commerce 619 

537.  Concurrent  jurisdiction  of  the  state  courts 620 

53S.     The  prohibition  of  contracting  out  of  the  act 621 

539,     The  superseding   of    state    statutes 621 

640.     The  right  of  removal  under  the  act 621 

THE  HOURS  OF  SERVICE  ACT  OF  1907. 

§  541.  The  act  of  1907 622 

542.  The  constitutionality  of  the  act  sustained ; 624 

543.  The  statute  not  void  for  uncertainty 624 

544.  The  Interstate  Commerce  Commission  had  authority  to  re- 

quire report 625 

545.  No  privilege  to  a  corporation  or  corporation  officers  against 

self-incrimination 628 

THE  TWEX TV-EIGHT  HOUR  LIVE   STOCK  TRANSPOR- 
TATION LAW. 

§  546.     The  twenty-eight  hour  act 626 

547.  Delivery  to  connecting  carrier 628 

548.  Accidental  or  unavoidable  causes  defined 628 

549.  Violation  of  rules  and  regulations  of  company  no  defense. .   628 

550.  Press  of  business 629 

551.  Requested  confinement — Question  for  jury 629 

552.  Burden  of  proof 629 

553.  The  government  is  entitled  to  writ  of  error 629 

554.  Pleadings    629 

555.  "Wilfully"    construed    630 

556.  Who  subject  to  the  act 630 

557.  Place  of  bringing  suits 630 

558.  Procedure — Unit  of  Offense 630 

APPENDIX. 

1.  Commerce  Court  Act 631 

2.  National  Trade  Union  Incorporation  Act 641 

3.  Arbitration  A  ct 642 

4.  Interlocking  Act   649 

5.  Ash  Pan  Act 650 

6.  Report  of  Accidents    Act 651 

7.  Rules  of  practice  before  the  com  nission 653 

8.  Forms  of  procedure  of  the  commission 655 

9.  Rules  of  practice  of  the  commerce  court 670 

10.     Report  of  the  National  Securities  Commission 675 


THE 

LAW  OF  INTERSTATE  COMMERCE. 


FART  I. 

CHAPTER  I. 

INTERSTATE  COMMENCE  UNDER  THE  FEDEEAL  CONSTITUaiOIT. 

CHAPTER  II. 
THE  CONCXmRENT  AND  EXCLTJSI\TE  POWERS  IN  INTERSTATE  CXHIMEBCE. 

CHAPTER  III. 
THE  FEDEEAL  LEGISLATIVE  EEGULATION  OF  INTERSTATE  COMMERCE. 

CHAPTER  IV. 

THE  FEDERAL  POWER  OF  REGULATION  IN  INTERSTATE  COMMERCE. 

CHAPTER  V. 

BUSINESS   COMBINATIONS  IN  INTERSTATE  COMMERCES. 

CHAPTER  VI. 

LABOR  COMBINATIONS  IN  INTERSTATE   COMMERCE, 

CHAPTER  VII. 

THE  FEDERAL  COI.'TROL  OF  STATE  REGULATION  OF  INTERSTATE  CARRIERS. 

1 


CHAPTER  I. 

INTERSTATE  COMMERCE  UNDER  THE  FEDERAL  CONSTITUTION. 

§  1.     The  commerce  clause  in  the  constitution. 

2.  Power  of  congress  in  foreign  commerce  and  with  the  Indian  tribes 

distinguished. 

3.  The  preference  clause  in  the  constitution. 

4.  •  The  prohibition  of  tax  or  duty  on  exports  from  state. 

5.  Federal  sovereignty  in  interstate  commerce. 

6.  Gibbons  v.  Ogden. 

7.  What  is  commerce. 

8.  What  is  not  commerce. 

9.  Insurance  and  commerce. 

10.  What  are  the  subjects  of  commerce, 

11.  Wild  game  and  fish  as  subjects  of  commerce. 

12.  Natural  oil  and  gas  as  subjects  of  commerce. 

13.  The  commerce  clause  and  the  admiralty  jurisdiction. 

14.  Erio  Canal  subject  to  admiralty  jurisdiction. 

15.  Jurisdiction  of  federal  courts  in  admiralty  cases. 

16.  State  corporations  in  interstate  commerce. 

17.  When  transit  ends;  the  original  package  in  interstate  commerce. 

18.  The  Wilson  Bill  of  1890. 

19.  Limitations  of  state  control  of  liquor  traffic. 

20.  A  state  cannot  tax  interstate  commerce. 

21.  But  a  state  can  tax  the  property  employed  in  interstate  commerce. 

22.  State  power  of  taxation  of  corporations  engaged  in  interstate  com- 

merce summarized. 

*'The  congress  shall  have  power  ...  to  regulate  com- 
merce with  foreign  nations,  among  the  several  states,  and  with 
the  Indian  tribes."  Constitution  of  the  United  States,  art.  I, 
sec.  8,  par.  3. 

"To  establish  post  offices  and  post  roads."  Art.  I,  sec.  8, 
par.  7. 

"The  congress  shall  have  power  to  make  all  laws  which  shall 
be  necessarj^  and  proper  for  carrying  into  effect  the  foregoing 
powers,  and  all  other  powers  vested  by  this  constitution  in  the 
government  of  the  United  States,  or  in  any  department,  or  any 
officer  thereof."     Art.  I,  sec.  8,  par.  18. 

"No  tax  or  duty  shall  be  laid  on  articles  exported  from  any 
state.  No  preference  shall  be  given  by  any  regulation  of  com- 
merce or  revenue  to  the  ports  of  one  state  over  those  of  an- 


§    1]    INTERSTATE   COMMERCE   UNDER  FEDERAL   CONSTITUTION.  3 

other;  nor  sliall  vessels  bound  to  or  from  one  state  be  obliged 
to  enter,  clear,  or  pay  duties  in  another."     Art.  I,  sec.  9,  par.  5. 

"The  citizens  of  eacli  state  shall  be  entitled  to  all  the  priv- 
ileges and  iiiniuinities  of  the  citizens  of  the  several  states." 
Art.  IV,  sec.  2. 

"This  constitution  and  the  laws  of  the  United  States  -which 
shall  be  made  in  pursuance  thereof,  and  all  treaties  made  or 
which  shall  be  made  under  the  authority  of  the  United  States 
shall  be  the  supreme  law  of  the  land;  and  the  judges  in  every 
state  sludl  be  bound  thereby,  anything  in  the  constitution  or 
laws  of  any  state  to  the  contrary  notwithstanding."  Art.  VI, 
par.  2. 

"The  powers  not  delegated  to  the  United  States  by  the  con- 
stitution, nor  prohibited  by  it  to  the  states,  are  reserved  to  the 
states  respectively,  or  to  the  people."  Amendment  X  (de- 
clared ratified  January  8,  1798). 

"All  persons  born  or  naturalized  in  the  United  States  and 
subject  to  the  jurisdiction  thereof  are  citizens  of  the  United 
States  and  of  the  state  wherein  they  reside.  Xo  state  shall 
make  or  enforce  any  law  wiiich  shall  abridge  the  privileges  or 
immunities  of  citizens  of  the  United  States,  nor  shall  any  state 
deprive  any  person  of  life,  liberty  or  property  without  due 
process  of  law,  nor  deny  to  any  person  within  its  jurisdiction 
the  equal  protection  of  the  laws."  Article  XIV,  Section  1  (de- 
clared ratified  July  28,  1868). 

§  1.  The  commerce  clause  in  the  constitution. — The  com- 
merce clause  in  tlie  federal  constitution  illustrates  more  point- 
edly than  any  other  the  circumstances  which  forced  the  adop- 
tion of  the  constitution  and  the  formation  of  the  government 
of  the  Unipn,  and  its  judicial  history  is  the  clearest  example  of 
the  adaptation  of  a  written  constitution  by  construction  to  con- 
ditions and  emergencies  never  contemplated  by  its  framers. 
It  was  the  necessity  for  national  control  over  foreign  com- 
merce which  was  the  immediate  occasion  for  calling  the  con- 
vention of  1787,  as  the  defect  of  the  articles  of  confederation 
in  failing  to  provide  for  the  control  of  this  commrece  was  uni- 
versally recognized. 

Under  the  articles  of  confederation  adopted  during  the 
revolutionary  war  congress  had  power  to  regulate  trade  with 
the  Indians,  but  the  control  of  foreign  and  interstate  com- 
merce remained  with  the  states.  The  compact  between  Vir- 
ginia and  Maryland  relative  to  the  navigation  of  the  Potomac 


4  INTERSTATE   COMMERCE   UNDER  FEDERAL   CONSTITUTION.    [§    1 

river  aud  the  Chesapeake  Bay,  and  the  report  of  the  commis- 
sioners thereon  led  the  Virginia  legislature  to  call  a  confer- 
ence at  Annapolis  in  1786  to  take  into  consideration  the  "trade 
of  the  United  States,  to  examine  the  relative  situation  in  the 
trade  of  the  states,  to  consider  how  far  a  uniform  system  in 
their  commercial  relations  may  be  necessary  to  the  common 
interests  and  their  permanent  harmony."  From  the  Annapolis 
conference  came  the  call  for  the  Philadelphia  convention  of 
1787,  which  framed  the  constitution. 

Commerce  among  the  states  however  was  in  1787  very 
simple,  and  other  than  that  carried  on  in  teams  and  wagons 
was  carried  on  by  navigation.  There  was  comparatively  little 
discussion  in  the  debates  of  the  convention  or  in  the  Federalist 
concerning  the  federal  control  over  interstate  commerce,  and 
no  consideration  seems  to  have  been  given  to  the  question  of 
the  effect  of  this  grant  of  the  federal  power  upon  the  police  or 
taxing  power  of  the  states.  It  was  regarded  as  essentially 
supplemental  to  the  control  over  foreign  commerce,  and  was 
granted  so  as  to  make  the  control  over  foreign  commerce  effect- 
ive. It  was  said  by  Mr.  Madison,^  that  without  this  supple- 
mental provision  the  great  and  essential  power  of  regulating 
foreign  commerce  would  have  been  incomplete  and  ineffectual, 
and  that  with  state  control  of  interstate  commerce,  ways 
would  be  found  to  load  the  articles  of  import  and  export  dur- 
ing the  passage  through  their  jurisdictions  with  duties,  which 
would  fall  on  the  makers  of  the  latter  and  the  consumers  of 
the  former. 

The  far-reaching  importance  of  this  federal  control  over 
commerce  among  the  states  was  not  and  could  not  be  fore- 
seen. It  only  came  to  be  realized  in  the  course  of  years,  as  the 
commercial  development  of  the  country  demanded  a  judicial 
construction  of  the  federal  power  in  harmony  with  the  recjuire- 
ments  of  such  commerce.  The  basis  of  this  construction  for 
all  time  was  made  by  the  far-sighted  and  masterful  reasoning 
in  the  broad  and  comprehensive  opinions  of  Chief  Justice 
Marshall.^ 

1  Federalist  No.  42.     It  was  sug-  gation  law  or  law  regulating  com- 

gested   in  the  convention   though,  merce    should    be   passed  without 

not  adopted,  and  also  in  some  of  the   consent   of   two-thirds  of   the 

the  state  conventions  as  a  condi-  members  present  in  both  houses 

tion  of  ratification,  that  no  navir  2  Justice  Bradley  in  the  opinion 


§    2]    INTERSTATE   COM -MERGE   UNDER  FEDERAL   CONSTITUTION.  5 

The  supreme  court  in  1895  in  affirming  the  supremacy  of 
the  federal  power  in  interstate  commerce,  said:^ 

"Constitutional  provisions  do  not  change,  but  their  opera- 
tion extends  to  new  matters,  as  the  modes  of  business  and  the 
habits  of  life  of  the  people  vary  with  each  succeeding  genera- 
tion. The  law  of  the  common  carrier  is  the  same  to-day  as 
when  transportation  on  land  was  by  coach  and  wagon,  and  on 
water  by  canal  boat  and  sailing  vessel,  yet  in  its  actual  opera- 
tion it  touches  and  regulates  transportation  by  modes  then  un- 
known, the  railroad  trains  and  steamships.  Just  so  it  is  with 
the  grant  to  the  national  government  of  power  over  interstate 
commerce.  The  constitution  has  not  changed.  The  power  is 
the  same.  But  it  operates  to-day  upon  modes  of  interstate 
commerce,  unknown  to  the  fathers,  and  it  will  operate  with 
equal  force  upon  any  new  modes  of  such  commerce  which  the 
future  may  develop." 

§  2.  Power  of  congTess  in  foreign  commerce  and  with  the 
Indian  tribes  distinguished. — In  the  commerce  clause,  congress 
is  empowered  to  regulate  commerce  with  foreign  nations 
among  the  several  states  and  with  the  Indian  tribes.  Although 
the  three  classes  of  commerce  are  thus  grouped  in  the  same 
clause  and  in  the  same  terms,  there  is  a  distinction  which  has 
been  frequently  discussed  between  interstate  commerce  on  the 
one  hand,  and  that  with  foreign  nations  and  with  the  Indian 
tribes  on  the  other,  and  this  distinction  is  important  not  only 
in  the  construction  of  the  legislation  heretofore  enacted  by 
congress,  but  in  determining  the  power  of  congress  in  what 
may  be  termed  its  unexercised  power  over  interstate  commerce. 

In  its  control  over  foreign  commerce,  congress  exercises  the 
power  of  an  independent  sovereign  dealing  with  other  inde- 

of  the  court  in  Leloup  v.  Port  of  clauses    of    the    constitution,   the 

Mobile,   127  U.    S.   640,   32   L.  Ed.  court  has  been  constrained  to  refer 

311,    in    18S7,    said    that    a   great  to     the     fundamental     principles 

number   and  variety   of  cases  inr  stated     and    illustrated    with    so 

volving  the  commercial   power  of  much  clearness  and  force  by  Chief 

congress    have    been    brought    to  Justice  Marshall  and  other  mem- 

the  attention  of  this  court  during  bers  of  the  court  in  former  times, 

the  past  fifteen  years,  which  have  and  to  modify  to  some  degree  cer- 

frequently   made    it   necessary   to  tain    dicta    and    decisions    which 

re-examine     the     whole     subject  have    occasionally    been    made    in 

with  care  and  the  result  has  some-  the  intervening  period, 
times  been  that  in  order  to  give  i  In  re  Debs    (1894),  15S  U.  S. 

full  and  fair  effect  to  the  different  564,  c.  p.  591,  39  L.  Ed.  1092. 


6  INTERSTATE  COMMERCE   UNDER  FEDERAL   CONSTITUTION.     [§    3 

pendent  sovereign  powers,  and  tliere  is  no  implied  or  reserved 
poAYer  in  the  states  in  relation  to  such  commerce.  Congress 
maj^  exercise  the  sovereign  power  of  placing  an  embargo  upon 
foreign  commerce  ^  or  it  may  exclude  aliens.  Commerce  with 
the  Indian  tribes  is  also  distinct  from  that  between  the  states, 
in  that  congress  in  such  regulation  exercises  the  power  of  a 
sovereign  over  a  dependent  people  or  tribal  communities  sub- 
ject to  the  paramount  authority  of  the  United  States.-  The 
power  of  controlling  commercial  relations  with  foreign  nations 
and  with  the  Indian  tribes  is  therefore  an  essential  sovereign 
power,  which  might  have  been  inferred  as  an  attribute  of  an 
independent  sovereign  nation  created  by  the  constitution  with- 
out express  grant  of  such  power  in  the  constitution. 

The  power  to  regulate  commerce  among  the  states  was  ex- 
pressly given  to  congress  in  order  to  secure  equality  and  free- 
dom in  commercial  intercourse  between  the  states  as  sovereign 
political  communities,  subject  only  to  the  paramount  author- 
ity of  the  United  States  in  national  concerns.  Although  the 
three  classes  of  commerce  are  thus  included  in  the  same  clause 
and  in  the  same  terms  in  the  enumeration  of  powers,  they  are 
clearly  distinguished  in  their  historic  setting  and  constitu- 
tional import,  and  the  laws,  Avhich  are  necessary  and  proper  in 
regulating  commercial  intercourse  with  foreign  nations  and 
with  the  Indian  tribes,  may  not  be  necessary  and  proper  in 
regulating  such  commercial  intercourse  between  the  states.^ 

§  3.  The  preference  clause  in  the  constitution.  The  so- 
called  preferential  clause  of  the  constitution  (article  I,  section 
9,  paragraph  5,  supra)  illustrates  this  differentiation  of  the 
federal  control  of  commerce  among  the  states  from  that  over 
foreign  commerce  and  with  the  Indian  tribes. 

As  already  observed,  at  the  time  of  the  adoption  of  the  con- 

11    Story   on    the   Constitution,  228      (1886);     United     States     v. 

sec.  289;  United  States  v.  Brigan-  Forty.-three  Gallons  of  Whiskey,  93 

tine    William,    Dist.    of    Mass.,   2  U.  S.   188,  23  L.  Ed.   846    (1876); 

Hall's  Am.  Law.  .T.  2.55.  Cherokee    Nation    v.    Kansas    Ry. 

2  Cherokee  Nation  v.  Georgia,  5  Co.,  13.5  U.  S.  641  (1890),  34  L.  Ed. 

Peters,  1  (1831),  8  L.  Ed.  25;  Wor-  295. 

cester   v.    Georgia,    6    Peters,    515  3  See  opinion  of  Justice  McLean 

(1832)  8  L.  Ed.  483;  United  States  in  Groves  v.  Slaughter,  15  Peters,  1. 

v.  Kagama,  118  U.  S.  375,  30  L.  Ed.  c.  505,  10  L.  Ed.  800-821  (1841). 


§    4]    INTERSTATE   COMMERCE    UNDER   FEDERAL   CONSTITUTION.  7 

stitiition,  commerce  among  the  states,  all  of  which  were  con- 
nected by  sea  and  navigable  waters,  was  conducted  wholly  by 
navigation  except  what  was  conducted  by  stage  or  wagon.  The 
prohibition  therefore  of  any  preference  of  the  ports  of  one 
state  over  those  of  another,  or  of  any  duties  in  interstate  traf- 
fic, had  an  importance  at  that  time  as  a  restraint  upon  the 
powers  of  the  general  government  which  can  hardly  be  appre- 
ciated at  the  present  time.  The  section  is  devoted  exclusively 
to  defining  the  powers  conferred  upon  congress,  and  is  a  dis- 
tinct limitation  of  the  powers  of  congress  in  the  regulation  of 
commerce  between  the  slates.^ 

§  4  (3).  The  prohibition  of  tax  or  duty  on  exports  from 
a  state. — The  prohibition  of  a  tax  or  duty  upon  articles  of  ex- 
port from  any  state  was  assumed  in  Almy  v.  California  ^  to  ap- 
ply to  exports  from  one  state  to  another.  It  has  since  been 
held  that  this  prohibition  has  no  application  to  interstate  traf- 
fic, but  applies  to  foreign  exports  only.^ 

This  clause  was  discussed  in  one  of  the  Insular  cases,*  where 
a  bare  majority  of  the  court  held  that  a  tariff  upon  merchan- 
dise going  into  Porto  Eico  from  the  United  States  was  not  a 
duty  upon  an  article  exported  from  the  United  States,  as  it 
was  not  exported  to  a  foreign  country. 

Mr.  Justice  Brown  in  delivering  the  opinion  of  the  court  said 
it  was  not  intended  to  intimate  that  congress  could  lay  a  tariff 
upon  merchandise  carried  from  one  state  to  the  other,  while 
in  the  dissenting  opinion  ^  it  was  insisted  that  this  clause  was 
intended  to  prevent  the  exercise  through  the  taxing  power  of 
congress  or  its  power  to  regulate  commerce  so  as  to  discrimi- 

1  Morgan,    etc.    Co.    v.    Bd.    of  though  they  resulted  in  a  van'iQg 

Health,  118  U.  S.   435    (1886),  30  charge   per   ton   per   mile   to   and 

L.     Ed.     237.       Attorney-General  from    the   ports    of   the    different 

Moody,  in  his  opinion  of  May  25,  states. 

1905     (Vol.     11,     Senate    Reports,  2  24  Howard,  169    (1860),   16  L. 

p.  1674),  advised  the  senate  com-  Ed.  644. 

mittee  of  interstate  commerce  that  .-!  WoodrufE    v.    Parham,    8    Wal- 

reasonable  rates  determined  by  leg-  lace,  123  (1868),  19  L.  Ed.  382. 

islative  authority  would  not  con-  *  Dooley   v.    United    States,    183 

stitute   a   preference  between   the  U.  S.  151  (1901),  43  L.  Ed.  128. 

ports    of    different    states    within  s  Justices   Fuller,   Brewer,   Har- 

the  prohibition  of  Art.  1,  Sec.  9.  par-  lan,  and  Pecliham. 
agrraph  5  of  the  Constitution,  even 


8  INTERSTATE   COMJilERCE   UNDER  FEDERAL   CONSTITUTION.    [§    5 

iiate  between  one  part  of  tlie  country  and  another,  and  the 
power  to  regulate  interstate  commerce  was  granted  in  order 
that  trade  between  the  states  might  be  left  free  from  discrimi- 
nating legislation,  and  not  to  impart  the  power  of  creating 
antagonistic  commercial  relations  between  them. 

§  5  (4).  Federal  sovereignty  in  interstate  commerce. — The 

federal  authority  in  interstate  commerce  is  enforced  not  only 
by  the  power  of  regulation  granted  to  congress  by  the  consti- 
tution, but  also  by  the  exercise  of  other  expressly  enumerated 
powers  of  congress,  more  or  less  directly  relating  to  interstate 
commercial  intercourse.  Thus  the  power  to  establish  post  of- 
fices and  post  roads,^  to  coin  money,  to  establish  uniform  sys- 
tems of  bankruptcy,  to  grant  patents  for  discoveries,  and  most 


1  The  Articles  of  Confederation 
gave  congress  the  power  only  to 
establish  post  oflBces.  The  en- 
larged grant  in  the  constitution  so 
as  to  include  the  establishment  of 
post  roads,  was  the  subject  of  ex- 
tended discussion  in  the  ante-rail- 
road days.  See  Story's  Commen- 
taries on  the  Constitution,  sections 
1123,  et  seq.  It  was  discussed  in 
connection  with  the  building  of 
the  Cumberland  or  National  road 
by  the  United  States.  See  Sea- 
right  V.  Stokes,  3  How.  151,  11  L. 
Ed.  537  (1845).  Mr.  Tucker,  in 
his  Commentaries  on  the  Constir 
tution.  Sec.  276,  claims  that  the 
power  to  construct  post  roads  is 
limited  to  cases  where  there  are  no 
post  roads  and  it  is  necessary  to 
build  them  for  postal  purposes. 
He  says,  however,  that  the  ques- 
tion of  power  to  build  the  roads, 
where  not  for  postal  purposes,  has 
never  been  settled.  In  Pennsyl- 
vania V.  The  Wheeling  &  Belmont 
Bridge  Co.,  18  I^ow.  421,  15  L.  Ed. 
435  (1856),  in  sustaining  the 
power  of  Congress  to  declare  the 
Wheeling  bridge  a  lawful  stnictr 


ure,  the  court  declined  to  enter 
upon  the  question  whether  Con- 
gress possessed  the  power  to  estab- 
lish the  bridge  as  a  post  road  un,- 
der  the  Post  Road  clause,  saying, 
"For,  conceding  that  no  such 
power  can  be  derived  from  this 
clause,  it  must  be  admitted  that  it 
is  at  least  necessarily  included  in 
the  power  conferred  to  regulate 
commerce  among  the  several 
states."  It  has  been  claimed  that 
the  power  to  establish  post  roads 
would  authorize  Congress  to  or- 
ganize a  system  of  national  post- 
road  corporations  with  incidental 
power  to  deal  in  transportation  of 
persons  or  property  within  as  well 
as  among  the  states.  See  mono- 
graph of  Hon.  Edgar  Howard  Far- 
rar  (1907).  Since  the  introduc- 
tion of  railroads  they  have  been 
uniformly  used  to  carry  the  mails, 
and  state  roads  have  been  used  to 
reach  post  offices  not  reached  by 
the  railroads.  In  the  Railroad  Act 
of  1866,  infra,  §  42,  Congress  re- 
ferred, in  the  preamble  to  the  act, 
to  the  power  to  establish  post 
roads. 


§    5 J    INTERSTATE   COMMERCE    UNDER   FEDERAL   CONSTITL'TION.  '.) 

important  of  all  tke  taxing  power,  are  closely  associated  with 
commercial  relations  and  activities.  There  is  also  what  has 
been  termed  the  "  D-efficient  power,"  the  power  to  make 
all  laws  necessary  ai.i  proper  to  carry  into  effect  the  foregoing 
powers,  and  all  other  powers  vested  by  the  constitution,  in  the 
government  of  the  United  States  or  in  any  department  or  of- 
ficer thereof. 

The  broad  and  comprehensive  construction  given  to  this  co- 
efficient power,  in  selecting  measures  for  carrying  into  execu- 
tion the  constitutional  poAvers  of  the  government  has  made 
academic  rather  than  practical  the  long  debated  distinction  be- 
tween tlie  express  and  implied  powers  of  congress.^  The  words 
"necessary  and  proper"  are  not  limited  to  such  measures  as 
are  absolutely  and  indispensably  necessary,  without  which  the 
powers  granted  must  fail  of  execution,  but  they  include  all 
proper  means  which  are  conducive  or  adapted  to  the  end  to  be 
accomplished,  and  wdiich  in  the  judgment  of  congress  will  most 
advantageously  effect  such  end.- 

The  federal  authority  in  interstate  commerce,  as  in  other 
matters,  does  not  rest  on  a  mere  aggregation  of  the  enumerated 
powers.  Although  the  government  of  the  United  States  is  one 
of  enumerated  powers,  and  under  the  tenth  amendment  the 
powers  not  delegated  to  the  United  States  by  the  constitution, 
nor  prohibited  by  it  to  the  states,  are  reserved  to  the  states  re- 
spectively or  to  the  people,  it  is  also  true  that  there  is  a  na- 
tional sovereignty — a  national  Federal  State — within  the  ^ 
scope  of  the  enumerated  powers,  and  the  constitution  and  laws 
of  the  United  States  are  the  supreme  law  of  the  land.  Upon 
this  broad  principle  of  the  sovereignty  growing  out  of  the  ag- 
gregation of  enumerated  powers  Avas  based  the  power  to  char- 
ter a  national  bank.-  the  power  to  exercise  the  right  of  emi- 
nent domain.'*  the  power  to  issue  legal  tender  notes.''  and  the 
power  to  exclude  aliens."  The  power  to  issue  legal  tender 
notes,  which  was  strongly  controverted,  was  based  upon  two 

1  McCulloch      V.      Maryland,      4  307,  23  L.  Ed.  440    (1S75):    Stock- 
Wheat.    316,    43S,    4    L.    Ed.    579  ton  v.  Baltimore,  32  Fed.  Rep.  9. 
("1819).  8  Legal  Tender  Case,  supra. 

2  Legal  Tender  Cases,  110  U.  S.  a  Chinese    Exclusion   Cases,    130 
421    (1884),  28  L.  Ed.  204.  F.   S.  581    (1889),  32  L.  Ed.   1068, 

3  McCulloch  V.  Maryland,  supra.      149  U.  S.  698  (1893),  37  L.  Ed.  905. 
i  Kohl  V.  United  States,  91  U.  S. 


10         INTERSTATE   COMMERCE   UNDER  FEDERAL   CONSTITUTION.    [§    5 

enumerated  powers,  that  of  coining  money  and  thereby  estab- 
lishing a  national  currency,  and  also  upon  the  commerce  power. 
It  was  also  declared  to  be  a  power  inherent  in  sovereignty,  as 
exercised  by  other  sovereignties  at  the  time  of  the  adoption  of 
the  constitution,  and  not  expressly  withheld  by  the  constitu- 
tion from  congress. 

As  a  political  sovereignty  the  government  of  the  United 
States  may  by  physical  force,  through  its  official  agents,  in  the 
enforcement  of  its  powers,  exercise  complete  sovereignty  over 
every  part  of  American  soil  which  belongs  to  it.  There  is  a 
"Peace  of  the  United  States,"  and  this  Peace  can  be  enforced 
by  the  executive  ^  in  the  protection  of  the  judicial  officers  of 
the  United  States  throughout  the  United  States  and  within 
the  limits  of  any  State.  These  fundamental  principles  were 
very  strongly  asserted  in  the  Debs  case,^  where  the  court  said 
that  the  government  of  the  United  States,  in  the  exercise  of 
its  power  over  the  mails  and  in  protecting  interstate  commerce, 
had  jurisdiction  over  every  foot  of  soil  in  its  territory  and 
acted  directlj^  upon  every  citizen.  The  decision  was  expressly 
based  upon  the  sovereign  power  of  the  United  States  within 
the  limits  of  its  enumerated  powers,  and  on  the  power  of  the 
government  to  enforce  that  sovereignty  through  the  executive 
or  through  the  courts,  acting  directly  through  the  citizens  and 
not  through  the  agencies  of  a  state,  when  the  federal  author- 
ity is  resisted. 

The  complexity  of  our  federal  governmental  system  includes 
this  distinct  sovereign  power  in  the  federal  government  with 
sovereign  powers  in  the  states.  In  the  language  of  Chief  Jus- 
tice Marshall,^  the  poM'ers  of  a  sovereic^n  are  divided  between 
the  government  officers  of  the  Union  and  those  of  the  states. 
They  are  each  sovereign  with  respect  to  the  rights  committed 
to  it,  and  neither  sovereign  with  respect  to  the  rights  committed 
to  the  other.  The  supreme  court  of  Massachusetts  *  said  that 
it  was  a  bold,  wise  and  successful  attempt  to  place  the  people 
under  two  distinct  governments,  each  sovereign  and  independ- 
ent within  its  own  sphere  of  action,  dividing  the  jurisdiction 
between  them,  not  by  territorial  limits  nor  by  the  relation  of 

1  In  re  Nagel,  135  U.  S.  1  3  McCulloch  v.  Maryland,  supra. 
(1890),  34  L.  Ed.  55.                                   4  Opinion   of  Justices,   14   Gray,. 

2  Supra,  §  1.  615. 


§    6]    INTERSTATE   COMAIERCE   UNDER   FEDERAL   CONSTITITIOX.         11 

superior  or  sul>oi'(liiiato,  but  classifying  the  subjects  of  jurisdic- 
tion and  designating  those  over  which  each  had  entire  and  in- 
dependent jurisdiction. 

The  federal  governnient  therefore,  though  sovereign  within 
the  sphere  of  its  enuiuerated  powers,  has  not  what  has  been 
termed  inherent  sovereignty,  nor  has  it  any  general  police 
powers;  but  with  its  wide  scope  of  selection  of  the  means  for 
the  execution  of  its  enumerated  powers  the  distinction  is 
hardly  a  practical  one  in  the  actual  working  of  our  dual  politi- 
cal system. 

§  6  (5).  Gibbons  v.  Ogden. — The  judicial  construction  of  the 
commerce  clause  begins  in  1824  with  the  great  opinion  of  Chief 
Justice  Marshall  in  Gil)bons  v.  Ogden,^  wherein  a  grant  of  the 
state  of  New  York  for  the  exclusive  right  to  navigate  the  wa- 
ters of  New  York  wnth  boats  propelled  by  fire  or  steam  was 
held  void  as  repugnant  to  the  commerce  clause  of  the  constitu- 
tion, so  far  as  the  act  prohibited  vessels  licensed  by  the  laAvs  of 
the  United  States  for  carrying  on  the  coast  trade  from  navi- 
gating the  said  waters  by  fire  or  steam. 

The  broad  and  comprehensive  construction  of  the  term  "com- 
merce" in  this  opinion  is  the  basis  of  all  subsequent  decisions 
construing  the  commerce  clause,  and  is  the  recognized  source 
of  authority.  Commerce  is  more  than  traffic ;  it  includes  inter- 
course. The  power  to  regulate  is  the  power  to  prescribe  the 
rules  by  which  commerce  is  to  be  governed.  This  power  like 
all  others  vested  in  congress  is  complete  in  itself,  and  may  be 
exercised  to  its  utmost  extent,  and  acknowledges  no  limitations 
other  than  as  prescribed  in  the  constitution.  The  power  over 
commerce  with  foreign  nations  and  among  the  several  states, 
said  the  court,  is  vested  in  congress  as  absolutely  as  it  would 
be  in  a  single  government  having  in  its  constitution  the  same 
restrictions  on  the  exercise  of  the  power  as  is  found  in  the  con- 
stitution of  the  United  States.  The  power  comprehended  nav- 
igation within  the  limits  of  every  state,  so  far  as  navigation 
may  be  in  any  manner  connected  with  commerce  with  foreign 
nations  or  among  the  several  states,  or  with  the  Indian  tribes, 

19  Wheat.  1,  6  L.  Ed.  23,  revers-       (1*^19),  and  also  in  Livingston  v. 
Ing    17    .Johns.     488     (1820).    and       Van  Ingen,  9  Johns.  507  (1812.) 
Kent,    .T..    in     4    .Tohns.    Ch.    150 


12         INTERSTATE   COMMERCE   UNDER  FEDERAL   CONSTITUTION.    [§    7 

and  therefore  it  passed  beyond  the  jurisdictional  line  of  New 
York  and  included  the  public  waters  of  the  state  which  were 
connected  with  such  foreign  or  interstate  commerce. 

The  most  important  and  far-reaching  declaration  in  the 
opinion  was  that  of  the  supremacy  of  the  federal  power,  so 
that  in  any  case  of  conflict  the  act  of  congress  was  supreme, 
and  state  laws  must  yield  thereto,  though  enacted  in  the  exercise 
of  powers  which  are  not  controverted. 

§  7  (6).  What  is  commerce. — The  term  "commerce"  is  not 
defined  in  the  constitution,  but  its  meaning  has  been  deter- 
mined by  the  process  of  judicial  inclusion  and  exclusion  on  the 
broad  and  comprehensive  basis  laid  down  in  Gibbons  v.  Ogden. 
Commerce,  it  was  there  said,  is  not  traffic  alone,  it  is  inter- 
course. "It  described  the  commercial  intercourse  between  na- 
tions, and  parts  of  nations  in  all  its  branches,  and  is  regulated 
by  prescribing  rules  for  carrying  on  that  intercourse." 

In  the  Passenger  Cases  ^  the  rule  declared  in  Gibbons  v.  Og- 
den was  applied  in  holding  invalid  certain  state  statutes  im- 
posing taxes  upon  alien  passengers.  It  was  said  that  com- 
merce included  navigation  and  intercourse  and  the  transporta- 
tion of  passengers. 

In  the  Pensacola  Telegraph  Company  case "  the  court  said 
that  since  the  ease  of  Gibbons  v.  Ogden  it  had  never  been 
doubted  that  commercial  intercourse  was  an  element  which 
comes  within  the  power  of  regulation  by  congress,  and  that 
the  power  thus  granted  was  not  confined  to  the  instrumentali- 
ties of  commerce  known  or  in  use  when  the  constitution  was 
adopted,  but  kept  pace  with  the  progress  of  the  country,  adapt- 
ing themselves  to  the  new  developments  of  time  and  circum- 
stances.   In  the  language  of  the  court : 

"They  extend  from  the  horse  with  its  rider  to  the  stage 
coach,  from  the  sailing  vessel  to  the  steamboat,  from  the  coach 
and  steamboat  to  the  railroad,  and  from  the  railroad  to  the 
telegraph,  as  these  new  agencies  are  successively  brought  into 
use  to  meet  the  demands  of  increasing  population  and  wealth. 
They  Avere  intended  for  the  government  of  the  business  to 
which  they  relate  at  all  times  and  under  all  circumstances." 

1  7  How.  283  (1849),  12  L.  Ed.  24,  1866,  as  a  prohibition  of  all 
702.  state  monopolies  in  interstate  tele- 

2  96   U.   S.   1    (1877),  24   L.  Ed.  graph  business. 
708,  711.     Construing  act  of  July 


§    7j    INTERSTATE   COMMKRCE   UNDER   FEDERAL   CONSTITUTION.         13 


In  a  later  case  it  was  said  ^  that  the  commerce  which  con- 
gress could  regulate  included  not  only  the  intercluinge  and 
transportation  of  commodities  or  visible  and  tangible  things, 
but  the  carriage  of  persons  and  the  transmission  by  telegrapli 
of  ideas,  orders  and  intelligence. 

Imj)ortation  into  one  state  from  another  is  tlie  indispensable 
element,  the  test  of  interstate  commerce ;  and  every  negotia- 
tion, contract,  trade  and  dealing  between  citizens  of  different 
states  which  contemplates  and  uses  such  importation,  whether 
it  be  of  goods,  persons  or  information,  is  a  transaction  of  inter- 
state connncrce.-  Such  commerce,  therefore,  includes  not  only 
communication  by  telephone  between  points  in  different 
states,^  but  also  communication  througli  a  correspondence 
school,  v»-here  the  intercourse  and  communication  relates  to 
matters  of  regular  and  continuous  business  and  the  conduct 
of  such  business,  therefore,  through  local  agencies  is  exempt 
from  state  control  or  interference.* 

While  a  bridge  is  not  a  common  carrier,  it  aft'ords  a  highway 


1 W.  U.  Tel.  Co.  V.  Pendleton, 
122  U.  S.  347  (1S87),  30  L.  Ed. 
1187. 

2  From  opinion  of  Sanborn,  J., 
in  Butler  Brothers  Shoe  Co.  v. 
United  States  Rubber  Co.,  1.56  Fed. 
1,  C.  C.  A.  8th  Cir.,  quoted  by  the 
Supreme  Court,  in  International 
Text  Book  Co.  v.  Pigg,  217  U.  S.  91, 
54  L.  Ed.  678   (1910). 

s  Richmond  v.  Southern  Bell 
Tel.  Co.,  174  U.  S.  761,  43  L.  Ed. 
1162  (1899);  Sunset  Telephone  & 
Telegraph  Co.  v.  Ureka,  172  Fed. 
755,  Cir.  Ot.  of  Northern  Dist.  of 
Cal.  (1902).  In  United  States  v. 
Westnian,  182  Fed.  1017  (Ore. 
1910),  the  Act  of  .lune  25,  1910, 
known  as  the  "White  Slave  Traffic 
Act,"  making  it  a  criminal  offense 
to  knowingly  transport,  or  to  pro- 
cure the  transportation  of  women 
for  immoral  purposes,  was  sus- 
tained as  within  the  commerce 
power  of  Congress.  The  case  was 
d'stinguished      from      Keller      v. 


United  States,  213  U.  S.  138,  53  L. 
Ed.  737,  where  the  court  held  ia- 
valid  the  statute  of  1907  which 
made  criminal  the  harboring  for 
immoral  purposes  alien  women 
within  three  years  after  entrance 
into  the  United  States. 

The  White  Slave  Traffic  Act  was 
also  sustained  by  the  District 
Court,  E.  D.  of  Texas,  in  April 
1911,  187  Fed.  992,  the  court  hold- 
ing that  the  transportation  of  per- 
sons was  commerce  and  that  Con- 
gress, under  its  regulatory  power, 
as  declared  in  the  Lottery  cases, 
could  prohibit  a  class  of  commerce 
in  the  interest  of  public  morals. 
The  validity  of  this  statute  is  now 
(1911)  pending  before  th'^  Supreme 
Court. 

•i  International  Text  Book  Co.  v. 
Pigg.  supra,  reversing  76  Kan.  32S. 
In  U.  S.  Fidelity  &  Guarantee  Co. 
V.  Commonwealth,  Ct.  Apps.  of  Ky. 
139  Ky.  27,  the  case  of  a  corpo- 
ration    operating     a     scheme     ot 


li        INTERSTATE  COMMERCE   UNDER  FEDERAL   CONSTITUTION.    [§    7 

for  such  carriage,  and  a  state  enactment  prescribing  the  rate 
of  toll  on  an  interstate  bridge  is  an  unauthorized  regulation  of 
interstate  commerce.^  Commerce  among  the  states,  therefore, 
embraces  navigation,  transportation  of  passengers  and  freight 
traffic  and  the  communication  of  messages  by  telegraph  ^  and 
by  telephone  ^  and  by  correspondence  schools. 

The  carrying  of  lottery  tickets  from  one  state  to  another  by 
corporations  or  companies  whose  business  it  is  to  carry  tangi- 
ble property  from  one  state  to  another,  constitutes  interstate 
commerce  which  may  be  properly  prohibited  by  congress  un- 
der its  power  of  regulation.* 

Interstate  commerce,  as  distinguished  from  domestic  com- 
merce, includes  traffic  between  points  in  the  same  state, 
but  which  in  transit  if  carried  through  another  state.^  It  fol- 
lows that  the  railroad  c'ommission  of  a  state  cannot,  without 
violating  the  commerce  clause,  fix  and  enforce  rates  for  the 
continuous  transportation  of  goods  between  such  terminal 
points.^  A  tax  on  an  interstate  railroad  can  be  apportioned  ac- 
cording to  mileage  in  a  state  (see  §  21,  infra),  but  when  a 
freight  rate  is  established  it  must  be  established  as  a  whole. 
(See  §  141,  infra.) 

Commerce  includes  navigation,  and  the  power  to  regulate 
commerce  comprehends  the  control,  for  that  purpose,  and  to 
the  extent  necessary,  of  all  the  rivers  of  the  United  States 
•which  are  accessible  from  a  state  other  than  those  in  which 
they  lie.'^     The  right  to  regulate  navigation  carries  with  it  the 

recommending  commercial  credits  State,  118  Ind.  194,  and  In  re  Penn. 

through  a  list  of  attorneys  of  dif-  Tel.  Co.,  48  N.  J.  Eq.  91. 

ferent    states,    was    distinguished  *  Lottery   Cases,   188   U.    S.   321 

from  the  above  case  and  held  lia-  (190.3),  four  judges  dissenting,  47 

ble  to  a  state  license  tax.  L.  Ed.  492. 

1  Covington,  etc.  Bridge  Co.  v.  5  Hanley  v.  K.  C.  So.  R.  Co.,  187 
Kentucky,  154  U.  S.  204  (1894),  38  U.  S.  G17  (1903),  47  L.  Ed.  333. 
L.  Ed.  962.  As  to  taxation  of  an  e  Delivery  of  packages  from  in- 
interstate  bridge,  see  Henderson  terstate  trains  to  addresses  in  a 
Bridge  Co.  v.  Kentucky,  166  U.  S.  city  is  a  part  of  interstate  com- 
150  (1897),  41  L.  Ed.  953,  and  merce.  Burnett  v.  City  of  New 
Henderson  Bridge  Co.  v.  Render-  York,  C.  C.  S.  D.  of  N.  Y.,  189 
son,  173  U.  S.  592,  48  L.  Bd.  823  Fed.  268  (1911).  See  also  Jewel 
(1899).  Tea  Co.   v.   Lee's   Summit,   W.   D. 

zPensacola  Telegraph  Co.  case,  of  Mo.  et  al.,  189  Fed.  280  (1911). 

^upra.  7  Oilman  v.  Philadelphia,  3  Wal- 

« Central     Union     Tel.     Co.     v.  lace,  724,  18  L.  Ed.  96. 


§    8]    INTERSTATE  COMMERCE   UNDER  FEDERAL   CONSTITUTION.         15 

right  to  regulate  and  improve  navigable  rivers  and  the  ports 
on  sucli  rivers,  and  the  power  to  close  one  of  several  channels 
in  a  navigable  stream,  if  in  the  judgment  of  congress  the  navi- 
gation of  the  river  will  be  thereby  improved.  Thus  the  power 
of  congress  over  the  Savannah  river  was  not  affected  by  the 
compact  between  South  Carolina  and  Georgia  in  1787,  before 
the  adoption  of  the  constitution.^  (As  to  concurrent  power  of 
state  in  river  improvements,  see  chap.  2,  infra.) 

To  constitute  interstate  commerce,  it  must  be  so  in  fact  and 
not  only  in  intention.  The  intention  to  ship  manufactured 
goods  to  other  states  does  not  make  a  contract  for  the  opera- 
tion of  a  factory  for  their  manufacture  relate  to  interstate 
commerce  in  a  constitutional  sense  so  as  to  exempt  it  from  the 
operation  of  state  laws,-  nor  does  such  intention  to  export 
property  from  the  state  constitute  a  ground  for  the  exemption 
from  the  power  of  state  taxation.     (See  §  20,  infra.) 

§  8  (7).  What  is  not  commerce. — While  commerce  is  more 
than  traffic  and  includes  commercial  intercourse  and  the  trans- 
mission of  intelligence,  it  does  not  include  the  contractual  rela- 
tions between  citizens  of  different  states,  which  are  incidental 
or  even  in  one  sense  are  essential  to  interstate  commercial  in- 
tercourse. The  distinction  may  be  illustrated  by  a  bill  of  lad- 
ing and  a  bill  of  exchange.  A  bill  of  lading  upon  an  interstate 
or  foreign  shipment  represents  the  property  shipped,  and  in 
the  case  of  an  interstate  shipment  is  beyond  the  taxing  power 
of  a  state,'  and  in  the  case  of  a  foreign  shipment  a  tax  upon  a 
bill  of  lading  is  a  tax  upon  exports,  and  therefore  beyond  the 
taxing  poAver  of  either  the  state  or  federal  government.-*  On 
the  other  hand,  a  bill  of  exchange,  whether  drawn  on  an  inter- 
state shipment  or  a  foreign  shipment,  is  an  incident  of  such 
commerce  and  not  a  part  of  it.  It  follows,  therefore,  that  a 
broker  dealing  in  foreign  bills  of  exchange  is  not  engaged  in 
commerce,  but  in  supplying  the  instrumentalities  of  commerce, 

1  South  Carolina  v.  Georgia,  93  «  Almy  v.  California,  24  How. 
U.  S.  4,  23  L.  Ed.  782  (1876).  As  169,  16  L.  Ed.  644  (1860);  Wood- 
to  the  admiralty  jurisdiction,  see  ruff  v.  Parham,  8  Wall.  123  (ISTO), 
infra,  §  13.  19  L-  Ed.  382. 

2  Diamond  Glue  Co.  v.  United  <  Fairbanks  v.  United  States, 
States  Glue  Co.,  E.  D.  of  Wis.  181  U.  S.  283  (1901),  45  L.  Ed.  862. 
(1900),  103  Fed.  Rep.  838. 


16         INTERSTATE  COMMERCE  UNDER  FEDERAL   CONSTITUTION.    [§    9 

and  a  state  tax  upon  money  and  exchange  brokers  is  not  void 
as  a  regulation  of  commerce.^ 

The  business  of  a  manufacturing  company,  although  the  man- 
ufactured product  is  sold  by  the  company  in  other  states  and 
in  foreign  countries,  is  not  interstate  conunerce.^  Commerce 
succeeds  manufacture  and  is  not  a  part  of  it,  and  the  relation 
of  the  manufacturer,  in  such  a  ease,  to  interstate  and  foreign 
commerce  is  incidental  and  indirect,  and  the  business  therefore 
is  subject  only  to  state  control. 

Trademarks,  though  useful  and  valuable  aids  of  commerce, 
are  not  subject  to  congressional  regulation,  unless  limited  to 
their  use  in  commerce  with  foreign  nations  and  among  the  sev- 
eral states  and  with  Indian  tribes.^ 


§  9  (8).  Insurance  and  commerce. — An  important  applica- 
tion of  this  principle,  that  the  contractual  relations  incidental 
to  commerce  are  not  included  in  the  commerce  clause,  has  been 
made  in  relation  to  the  business  of  insurance.  The  business  of 
fire  and  marine  insurance  is  intimately  related  to  interstate 
and  foreign  commerce,  and  is  indeed  an  essential  feature  of 
such  commerce,  while  life  insurance  involves  an  associated  re- 
lation for  the  averaging  of  human  lives,  extending  not  onlj'- 
through  the  states  of  this  country  but  foreign  countries.*     It 


1  Nathan  v.  Louisana,  8  How. 
73  (1850),  12  L.  Ed.  992.  The  lend- 
ing of  money  by  a  citzen  of 
one  state  to  a  citizen  of  an- 
other is  not  interstate  commerce. 
Nelms  V.  Mortgage  Co.,  92  Ala.  157. 
Mr.  Hamilton,  in  his  argument  on 
the  power  to  charter  a  national 
bank,  3  Hamilton's  Works 
(Lodge),  pp.  179-203,  enumerates, 
among  the  subjects  over  which  he 
had  little  doubt  the  national  power 
extended,  the  regulation  of  policies 
of  insurance  and  bills  of  exchange 
drawn  by  a  merchant  of  one  state 
upon  a  merchant  of  another. 

zKidd  V,  Pierson,  128  U.  S.  1 
(1888),  32  L.  Ed.  346;  United 
States  V.  Knight  Co.,  156  U.  S.  1 
(1895),  39  L.  Ed.  325. 


3  Trade  Mark  Cases,  100  U.  S. 
82,  25  L.  Ed.  550  (1879). 

4  President  Roosevelt  in  his 
message  of  December,  1904,  says 
that  the  business  of  insurance 
vitally  affects  the  great  mass  of 
the  people  of  the  United  States,  and 
is  national  and  not  local  in  its  ap- 
plication, and  that  it  involves  a 
multitude  of  transactions  among 
the  people  of  the  different  states 
and  between  American  countries 
and  foreign  governments.  He 
urges  congress  to  consider 
whether  the  power  of  the  Bureau 
of  Corporations,  infra,  §  59,  could 
not  constitutionally  be  extended  to 
cover  interstate  transactions  in  in- 
surance. 


§    lOj    INTERSTATE  COMMEHCE  UNDER  FEDERAL  CONSTITUTION.         17 

was  held  first  in  the  case  of  a  foreign  fire  insurance  company 
which  clfumed  ex('ini)tion  from  state  control,  that  a  policy  of 
insurance  was  not  an  instrument  of  commerce,  but  was  a  mere 
contract  for  indemnity  against  loss  by  fire,  and  that  the  fact 
that  the  parties  were  domiciled  in  diflferent  states  did  not  make 
such  contracts  interstate  transactions  within  the  meaning  of 
the  commerce  clause.^  Later  this  ruling  was  applied  to  a  con- 
tract of  marine  insurance,-  and  the  court  said,  if  the  power  to 
regulate  interstate  commerce  applied  to  all  the  incidents  to 
which  commerce  might  give  rise,  and  to  all  the  contracts  which 
might  be  made  in  the  course  of  its  transaction,  the  power  would 
embi-ace  the  entire  sphere  of  mercantile  activity  in  any  way 
connected  Avith  trade  between  the  states.  Finally,  in  1900,  the 
ruling  Avas  extended  to  the  case  of  mutual  life  insurance,  al- 
though here  it  was  contended  that  the  policies  were  not  mere 
contracts  of  indemnity,  but  represented  an  associated  relation 
based  on  the  comparative  certainty  of  the  average  life  and  the 
uncertainty  of  the  individual  life,  thus  necessitating  a  uniform 
law  controlling  this  associated  relation  of  parties  resident  in 
different  states  and  countries.  The  court,  however,  refused  to 
distinguish  the  business  of  mutual  life  insurance  from  that  of 
fire  and  marine  insurance.^  The  business  of  insurance  there- 
fore in  all  its  branches  is  subject  to  the  legislation  of  the  dif- 
ferent states  *  wherein  the  companies  are  located. 

It  Avas  strongly  contended  by  the  dissenting  judges  in  the 
lottery  cases,  supra,  that  lottery  tickets,  under  the  ruling  in  the 
insurance  cases,  Avere  mere  evidences  of  contractual  relations, 
furnishing  the  means  of  enforcing  contract  rights,  and  were 
not  instruments  of  commerce  in  any  sense.  It  was  ruled  in  the 
prevailing  opinion,  hoAvever,  that  lottery  tickets  are  subjects 
of  traffic,  and  are  therefore  subjects  of  commerce. 

§  10  (9).  What  are  the  subjects  of  commerce. — Commerce 
betAveen  the  states  includes  only  the  subjects,  which  are  prop- 
erly and  laAvfully  articles  of  commerce.    The  regulating  power 

1  Paul  V.  Virginia,  8  "Wall.  168  Cravens,  178  U.  S.  389  (1890),  44 
(18691,  19  L.  Ed.  3.57.  L-  Ed.  1116. 

2  Hooper  v.  California,  155  U.  S.  *  As  to  the  exercise  of  their 
647  (1S95),  39  L.  Ed.  297.  power  by  the  states  and  its  effect 

8  New    York    Life    Ins.    Co.    v.      upon    the    business    of    insurance, 

see  infra,  §  16. 


18         INTERSTATE  COMMERCE  UNDER  FEDERAL  CONSTITUTION.    [§    10 

of  congress  does  not  deprive  the  states  of  their  inherent  police 
power  in  protecting-  the  lives  and  property  of  their  citizens, 
although  the  line  is  oftentimes  difficult  to  draw,  as  the  dissents 
in  the  supreme  court  show,  between  reasonable  police  regula- 
tion Avhieh  only  indirectly  or  incidentally  affects  interstate 
commerce,  and  legislation  wliich  invades  the  prerogatives  of 
congress. 

Thus  the  states  may  legislate  to  prevent  the  spread  of  crime, 
and  may  exclude  from  their  limits  paupers,  convicts,  persons 
likely  to  become  a  public  charge,  and  persons  afflicted  with  con- 
tagious diseases.^  A  state  may  protect  the  moral  as  well  as 
the  physical  health  of  its  people.  A  corpse  is  not  the  subject 
of  commerce.-  This  jjower  of  the  state  includes  the  right  to 
protect  the  people  against  fraud  and  deception  in  the  sale  of 
food  products.  The  principle  was  applied  by  the  court  in  sus- 
taining a  IMassaehusetts  statute,^  which  prohibited  the  manu- 
facture and  sale  of  imitation  butter,  oleomargarine,  artificially 
colored  so  as  to  cause  it  to  look  like  butter. 

This  principle  does  not  extend  to  the  exclusion  of  any  com- 
modity which  is  generally  recognized  as  a  legitimate  article  of 
■commerce,  though  condemned  and  sought  to  be  excluded  by 
the  legislation  of  a  particular  state.  A  state  cannot  determine 
for  itself  upon  its  own  standards  of  public  opinion  what  are 
and  what  are  not  lawful  subjects  of  commerce,  against  the 
generally  accepted  opinion  of  the  commercial  world.  This  dis- 
tinction was  illustrated  in  another  oleomargarine  case  *  where 

^  But   as   to   right  of   excluding  foreign    coffee.      Held    that    there 

foreign    immigrants,    see    Hender-  was  no  error  in  excluding  evidence 

son    v.    New   York,    92    U.    S.    259  that  it  was  a  recognized  article  of 

(1875),  23  L.  Ed.  543;  Chy  Lung  V.  commerce.     See  also  Capitol  City 

Freeman,  92  U.  S.  275   (1875),  23  Dairy  Co.  v.  Ohio,   183  U.    S.   238 

L.  Ed.  550.  (1902),  46  L.  Ed.  171. 

2  In  re  V/ong  Yung  Quy,  6  Saw.  4  Schollenberger  v.  Pennsyl- 
442.  vania,  171  U.  S.  1  (1898),  43  L.  Ed. 

3  Plumley  v.  Massachusetts,  155  49.  In  Collins  v.  New  Hampshire, 
U.  S.  461  (1895),  39  L.  Ed.  223.  171  U.  S.  31  (1898),  43  L.  Ed.  60, 
The  same  principle  was  applied  in  the  court  held  invalid,  as  being  in 
Grossman  v.  Lurman,  192  U.  S.  189  necessary  effect  prohibitory,  a 
(1904),  48  L.  Ed.  401,  in  sustain-  statute  prohibiting  sale  of  oleo- 
ing  a  New  York  statute  as  to  the  margarine  as  a  substitute  for  but- 
importation    of   artifically   colored  ter  unless  colored  pi77k. 


§    10]    INTERSTATE  COMMERCE  UNDER  FEDERAL  CONSTITUTJOX.  19 

the  court  held  invalid  a  statute  of  Pennsylvania  which  abso- 
lutely prohibited  the  manufacture  or  sale  of  oleomargarine,  so 
far  as  that  statute  prohibited  the  introduction  of  oleomarga- 
rine from  another  state  and  its  sale  in  the  original  package. 

The  court  distinguished  the  Plumley  (Massachusetts)  case  on 
the  ground  that  it  Avas  based  upon  the  right  of  the  state  to 
prevent  deception  and  fraud,  and  that  the  right  of  a  state  in 
relation  to  the  administration  of  its  internal  affairs  was  one 
thing,  and  its  right  to  prevent  the  introduction  within  its  limits 
of  an  article  of  commerce  was  another  and  totally  different 
thing.  The  court  in  its  opinion  referred  to  the  fact  that  oleo- 
margarine had  been  treated  by  congress  as  a  proper  subject  of 
taxation,^  that  this  was  in  effect  an  affirmative  declaration  by 
congress  that  it  was  a  proper  subject  of  commerce,  and  that 
it  was  estnl)lished  by  competent  testimony  that  it  was  a  whole- 
some human  food  and  a  legitimate  subject  of  commerce. 

This  conflict  between  local  and  general  public  opinion  as  to 
what  are  proper  subjects  of  commerce  was  illustrated  in  the 
case  of  spirituous  liijuors  -  which  the  court  held  were  legiti- 
mate subjects  of  commerce,  the  introduction  and  sale  whereof 
in  the  original  package  could  not  be  prohibited  by  the  state.' 
The  right  of  the  state  in  its  control  of  its  domestic  commerce 
to  enforce  its  ow^n  view^s  of  public  policy  in  prohibiting  the 
manufacture  and  sale  of  both  liquors*  and  oleomargarine^ 
had  been  sustained  by  the  court. 

Tobacco  is  also  a  legitimate  article  of  commerce  and  the  su-' 
preme  court  said  that  it  could  not  take  judicial  notice  of  the 
fact  that  it  w^as  more  noxious  in  the  form  of  cigarettes  than  in 

lAct   of   August   2,   1S66,   c.    40,  Circuit.  51  C.  C.  A.  122,  113  Fed. 

24  statutes  at  large,  209.  Rep.  CI  6,  65  L.  R.  A.  864,  where  the 

2  See  infra,  §  19.  court    refused    to    enjoin    the    en- 

3  As  to  the  regulation  of  inter-  forcement  of  a  state  statute  pro- 
state liquor  traffic  under  Wilson  hibiting  coloring,  coating  or  polish- 
Act,  see  infra,  §  18.  ing  an   article  intended  for  food, 

4Mugler   V.   Kansas,   123    U.    S.  whereby  damage  or  inferiority  is 

623,  31  L.  Ed.  205   (1877);  Boston  concealed.      The    court    said    this 

Beer  Co.  v.  Mass.,  97  U.  S.  25;   24  was  not  in  conflict  with  the  power 

L.  Ed.  9S9  (1878).  of  congress  to  regulate  commerce, 

B  Powell  V.  Pennsylvania,  127  U.  though  applied  to  articles  sold  in 

S.  678  (1888),  32  L.  Ed.  253.     See  original    packages    imported    from 

also   Arbuckle   v.    Blackburn,    6th  other  states. 


20         INTERSTATE  COMMERCE  UNDER  FEDERAL  CONSTITUTION.    [§    11 

other  forms.^  It  was  therefore  subject  to  the  same  extent  as 
intoxicating  liquors  to  the  police  power  of  the  state,  that  is, 
the  state  could  declare  how  far  cigarettes  should  be  sold  or 
prohibit  their  sale  entirely  after  they  had  been  taken  from  the 
original  packages  or  had  left  the  hands  of  the  importer,  pro- 
viding no  discrimination  was  used  as  against  those  imported 
from  other  states,-  but  could  not  prohibit  their  importation. 

The  la^vful  police  power  of  the  state  also  extends  to  the  rea- 
sonable inspection  of  articles  brought  in  from  the  other  states, 
this  right  of  inspection  being  expressly  recognized  by  the  con- 
sitution  in  the  case  of  foreign  importations.^  But  this  inspec- 
tion must  be  reasonable,  and  is  invalid  if  burdened  with  such 
conditions  as  would  wholly  prevent  the  introduction  of  the 
sound  article  from  other  states.* 

§  11  (10).  Wild  game  and  fish  as  subjects  of  commerce. — 

Lawful  subjects  of  commerce  must  be  capable  of  private  owner- 
ship, and  while  this  is  not  subject  to  the  determination  of  a 
state  in  relation  to  recognized  subjects  of  commerce,  it  is  sub- 
ject to  the  state  control  where  the  matter  is  not  a  subject  of 
private  ownership  except  as  permitted  by  state  law.  Thus  the 
wild  game  within  a  state  at  common  law  belongs  to  the  sov- 
ereign, and  in  this  country  to  the  people  in  their  collective  ca- 
pacity, and  the  state  therefore  has  a  right  to  say  that  it  shall 
not  become  the  subject  of  commerce.  Upon  this  principle  the 
supreme  court  sustained  a  Connecticut  ^  statute  prohibiting 
the  killing  of  certain  game  in  the  state,  with  the  intent  of  trans- 
porting the  same  out  of  the  state. 

A  state  in  the  exercise  of  its  police  power  may  also  prohibit 
the  possession  of  game  during  prescribed  seasons,  except  on 
giving  bond  against  the  sale,  whether  the  game  was  taken 
within  or  without  the  state  and  although  the  game  may  have 

1  Austin  V.  Tennessee,  179  U.  S.  Co.,  203  U.  S.  38,  51  L.  Ed.  78 
343  (1900),  45  L.  Ed.  224.  (1906),  sustaining  the  hide  inspec- 

2  As  to  size  of  the  original  tion  law  of  Territory  of  New  Mex- 
package,  see  infra,  §  17.  ioo. 

3  Art.    1,   sec.    10,    par.    2;    Pat-  4  See  Minnesota  v.   Barber,  136 
apsco  Guano  Co.  v.  North  Carolina  U.  S.  313  (1890),  34  L.  Ed.  455. 
Board  of  Agriculture,  171  U.  S.  345  *  Geer  v.  Connecticut,  161  U.  S. 
(1898),  43  L.  Ed.  191.     New  Mex-  519  (1896)  40  L.  Ed.  793. 

ico  ex  rel.  v.  Denver  &  R.  G.  R.  R. 


§    11]    INTERSTATE  COMMERCE  UNDER  FEDERAL  CONSTITUTION.         21 

been  taken  in  foreign  countries  during  the  open  season  for  tak- 
ing game  in  such  countries.^ 

The  act  of  congress '  prohibiting  the  shipment  or  transporta- 
tion in  interstate  commerce  of  game  killed  in  violation  of  the 
local  laws,  and  requiring  all  packages  containing  game  shipped 
in  interstate  commerce  to  be  plainly'  marked,  showing  the  name 
and  address  of  the  shipper  and  the  character  of  the  contents, 
and  making  the  violation  of  these  provisions  a  criminal  offense, 
was  sustained  as  within  the  lawful  power  of  congress  over  in- 
terstate commerce."' 

Under  the  same  principle  the  state  determines  on  what  condi- 
tions the  products  of  oyster  beds  and  fisheries  may  become  sub- 
jects of  commerce,  as  each  state,  subject  to  the  paramount  con- 
trol of  navigation  in  the  federal  government,  owns  the  beds  of 
all  tide  waters  and  public  waters  in  its  jurisdiction.* 

In  the  case  cited  from  Massachusetts  the  courts  held  valid 
an  act  of  that  state  prohibiting  fisheries  in  the  waters  of  Buz- 
zard's Bay,  except  under  the  regulations  prescribed  by  the  act, 
and  held  that  it  applied  to  a  vessel  which  had  a  license  to  fish 
under  the  laws  of  the  United  States.  There  has  been  no  grant 
to  congress  of  power  over  fisheries,  and  these  remain  under  the 
exclusive  control  of  the  states.  The  extent  of  the  territorial 
jurisdiction  of  the  state  of  Massachusetts  over  the  sea  adjacent 
to  its  coast  was  held  to  be  that  of  an  independent  nation,  and 
except  so  far  as  the  right  of  control  over  this  territory  had  been 
granted  to  the  United  States,  the  control  remained  with  the 
state,  subject  of  course  to  the  admiralty  and  maritime  jurisdic- 
tion of  the  United  States.  Within  what  are  generally  recog- 
nized as  the  territorial  limits  of  states  by  the  law  of  nations,  a 

1  New  York  ex  rel.  Silz  v.  Hes-  merce  between  the  states  of  New 
terbey,  211  U.  S.  31,  53  L.  Ed.  75  York  and  New  Jersy  was  not  in- 
(1908),  affirming  184  N.  Y.  126.  terfered    with   by    a   New    Jersey 

2  See  Act  of  May  25,  1900,  U.  S.  statute,  whereunder  a  riparian 
Compiled  Statutes  1901,  p.  3181,  owner  was  forbidden  to  direct  the 
known  as  the  Lacey  Act.  waters  of  Passaic  river  beyond  the 

8  Rupert  V.  United  States,  C.  C.  state  under  a  contract  to  furnish 

A.  8th  Circuit,  181  Fed.  87  (1910).  water  supply  for  city  of  New  York. 

4  McCready  v.  Virginia,  -94  U.  S.  Hudson  County  Water  Co.  v.  Mc- 

391    (1876),   24  L.  Ed.   248;    Man-  Carter,  209  U.  S.  349,  52  L.  Ed.  828 

Chester  v.  Massachusetts,  139  U.  S.  (1909),  aff'g  70  N.  J.  Eq.  695. 
240    (1890),  35  L.  Ed.   159.     Com- 


22         INTERSTATE  COMMERCE  UNDER  FEDERAL  CONSTITUTION.    [§    12 

str.te  can  define  its  boundaries  on  the  sea  and  the  boundaries  of 
its  counties ;  and  by  this  test  Massachusetts  can  properly  include 
Buzzard's  Bay  within  the  limits  of  its  counties. 

§  12  (11).  Natural  oil  and  gas  as  subjects  of  commerce. — Nat- 
ural oil  and  gas  are  not  subject  to  absolute  ownership  while  in 
the  confines  of  the  earth,  and  from  their  tendency  to  move  from 
one  place  to  another  have  been  called  in  some  of  the  decisions 
minerals  fercc  natnrcu.  They  become  however  lawful  subjects  of 
commerce  when  brought  to  the  surface  and  secured  in  pipes.  A 
statute  of  Indiana  prohibiting  the  piping  of  natural  gas  from 
the  state  was  held  by  the  supreme  court  of  that  state  to  be  an 
attempted  regulation  of  interstate  commerce,  and  violative  of 
the  natural  right  of  dealing  with  the  property,  and  therefore 
void.  The  court  said  that  the  natural  gas  in  the  earth  cannot 
be  a  commercial  commodity,  but  w4ien  brought  to  the  surface 
and  placed  in  pipes  for  transportation,  it  assumed  that  charac- 
ter as  completely  as  coal  in  cars  or  petroleum  in  tanks.^ 

"While  this  position  seems  to  be  conceded  in  all  the  courts  as 
to  the  commercial  character  of  oil  and  gas  when  brought  to  the 
surface  and  secured  in  possession,  it  is  also  recognized  that  ow- 
ing to  the  peculiar  character  of  these  substances  the  property 
right  of  the  owner  of  the  land  in  such  mineral  oil  and  gas  while 

1  State  ex  rel.  v.  Indiana  &  Ohio  but  it  was  property  which  by  law- 
Gas  and  Mining  Co.,  120  Ind.  575.  ful  right  one  could  transport  and 
In   West   V.    Kansas  Natural    Gas  sell  as  other  personal  property.   In 

Co.,  220  U.  S.  ,  55  L.  Ed.  this  case  the  state  had  granted  the 

(1911),    the    Supreme    Court    af-  use  of  highways  to  domestic  cor- 

finned   the   United    States   circuit  porations    engaged    in    intrastate 

court   of  the   Eastern   District   of  transportation  of  natural  gas,  giv- 

Oklahoma,  172  Fed.  545,  in  enjoin-  ing    such    corporations    even    the 

ing  the   enforcement  of  an  Okla-  right  to  the  longitudinal  use  of  the 

homa  statute,  which  prohibited  ex-  state  highways  but  denied  to  the 

cept  for  private   use   construction  appellees  the  right  to  pass  under 

of  pipe  lines  for  the  transportation  and     over     the     highways.       The 

of  natural  gas  and  held  that  the  court  said  that  this  discrimination 

act  providing  that  the  gas  should  was  beyond  the  power  of  state  to 

not  be  transported  out  of  the  state  make.      This    case    was   therefore 

was  void   as  to  interference  with  distinguished    from     the     Indiana 

Interstate  Commerce.    Natural  gas  case,   infra,   and   Justices  Holmes, 

was  not  a  product  which  the  state  Lurton  and  Hughes  dissenting, 
could  conserve  for  its  own  people, 


§    12]    INTERSTATE  COMMERCE  UNDER  FEDERAL  CONSTITrTIOX.         2:) 

confined  in  the  earth  is  necessarily  subject  to  qualifications. 
Thus  an  act  of  Indiana  making  it  unlawful  for  the  owner  of  a 
natural  gas  or  oil  well  to  allow  or  permit  the  flow  of  gas  or  oil 
from  any  such  well  to  escape  into  the  air,  without  being  con- 
fined within  the  well  or  proper  pipes,  for  a  longer  period  than 
two  days  after  the  gas  or  oil  shall  have  been  struck  in  such 
well,  was  not  a  violation  of  the  constitution  of  the  United  States, 
nor  taking  of  private  property  "without  compensation,  nor  a 
denial  of  due  process  of  law,  but  was  a  lawful  regulation  by  a 
state  within  its  discretion  of  a  subject  which  especially  comes 
Avitliin  its  lawful  authority.^ 

The  supreme  court  said  in  this  case  that  there  is  a  distinction 
between  animals  fcrcc  natnrce  and  gas  and  oil,  in  that  in  the  case 
of  the  former  there  was  no  individual  proprietorship  until  the 
actual  reduction  of  the  property  to  possession,  the  property 
right  until  then  being  in  the  public.  In  the  case  of  natural  gas 
and  oil  no  such  right  exists  in  the  public ;  and  in  the  case  of  the 
former  every  one  may  be  prohibited  from  seeking  to  reduce  to 
possession.  In  the  case  of  natural  gas  and  oil  however  the 
surface  proprietors  within  the  gas  field  have  the  right  to  re- 
duce to  possession  the  gas  and  oil  beneath,  and  they  cannot  be 
absolutely  deprived  of  this  right  without  the  taking  of  private 
property.  The  legislative  power  however,  from  the  peculiar 
nature  of  the  right  and  the  objects  upon  which  it  is  to  be  ex- 
erted, can  be  manifested  for  the  purpose  of  protecting  all  the 
collective  owners  in  the  gas  field  and  preventing  waste. 

It  was  urged  in  this  case  that  it  was  necessary  to  Avaste  the 
gas  in  order  to  force  up  the  oil ;  but  the  court  said  this  was  a 
matter  vrhich  addressed  itself  to  the  wisdom  of  the  legislature 
and  did  not  affect  the  power  to  make  the  regulation. 

The  right  of  a  state  to  conserve  its  resources  for  its  own  peo- 
ple, as  illustrated  in  the  case  of  flowing  rivers  and  game,  does 

1  Ohio  Oil  Co.  V.  Indiana,  177  U.  Ind.  44G:    Hague  v.  Wheeler,  1.'7 

S.    190,   44   L.   Ed.    729.     See   also  Pa.    St.   ^24;    Jamison   v.    Indiana 

Brown  v.  Spillman,  155  U.  S.  665,  Natural  Gas  &  Fuel  Co.,  128  Ind. 

39    L.    Ed.    304;    Westmoreland    &  555,  12  L.  R.  A.  652;   Benedict  v. 

Cambria  Natural  Gas   Co.   v.   Da-  Construction  Co.,  49  N.  J.  Eq.  23; 

v/itt,  130  Pa.  St.  235;  Townsend  v.  Manufacturer  Gas  Co.  v.  Ind.  Nat. 

State,  147  Ind.  624;   Indiana  Con-  G.  &  F.  Co.,  155  Ind.  545. 
sumers  &  T.  R.  Co.  v.  Horlass,  131 


24         INTERSTATE  COMMERCE  UNDER  FEDERAL  CONSTITUTION,    [§    13 

not  extend,  whatever  the  local  needs  of  a  state,  to  natural  oil 
and  gas,  when  reduced  to  private  possession  through  owner- 
ship of  the  soil  and  thus  become  the  subjects  of  private  owner- 
ship. In  such  case  the  state  can  adopt  such  reasonable  methods 
of  regulation  of  the  production  of  oil  and  gas  as  are  required 
b}'  the  peculiar  nature  of  the  property,  but  it  cannot  deprive 
the  owner  of  his  right  to  withdraw  and  sell  the  oil  or  gas  when 
reduced  to  possession  in  interstate  commerce,  and  a  state  stat- 
ute seeking  to  attain  these  unauthorized  ends  is  void.^ 

§  13  (12).  The  commerce  clause  and  the  admiralty  jurisdic- 
tion.— The  federal  power  over  interstate  and  foreign  commerce 
is  reinforced  as  to  the  commerce  on  water,  as  distinguished 
from  land  transportation,  by  section  2,  article  III,  of  the  con- 
stitution, extending  the  judicial  power  of  the  courts  of  the 
United  States  to  all  cases  of  admiralty  and  maritime  jurisdic- 
tion. It  is  not  within  the  scope  of  this  work  to  consider  the  fed- 
eral legislation  enacted  in  the  regulation  of  this  admiralty  and 
maritime  jurisdiction,  further  than  to  show  the  progressive  de- 
velopment of  this  jurisdiction,  which  has  more  than  kept  pace 
with  the  judicial  development  of  the  commerce  clause. 

It  was  first  ruled,  following  the  English  precedents.-  that  the 
admiralty  courts  could  not  rightfully  exercise  jurisdiction  ex- 
cept in  eases  where  the  service  was  substantially  performed  or 
to  be  performed  upon  the  sea,  or  upon  waters  within  the  ebb 
and  flow  of  the  tides.  The  effect  of  this  decision  was  to  exclude 
from  the  admiralty  and  maritime  jurisdiction  the  commerce 
upon  the  great  lakes  and  navigable  rivers  of  the  United  States. 
It  was  not  until  1851  that  the  earlier  decision  was  overruled, 
and  it  was  definitely  decided  that  the  admiralty  and  maritime 
jurisdiction  granted  to  the  federal  government  by  the  constitu- 
tion of  the  United  States  was  not  limited  to  tide  waters,  but 
extended  to  all  public  navigable  lakes  and  rivers  where  com- 
merce was  carried  on  between  different  states  or  with  foreign 

iWest  v.  Kansas  National  Gas  (April,  1911),  wherein  an  inter- 
Co.,  supra.  In  this  case  the  su-  locutory  injunction  against  the  en- 
preme  court  cited  and  quoted  ap-  forcement  of  same  Oklahoma  stat- 
provingly  the  opinion  of  the  cir-  ute  was  affirmed, 
cuit  court  of  appeals  of  the  8th  2  The  Thomas  Jefferson.  10 
circuit  in  Haskell  v.  Cowhan,  187  Wheat.  428  (1825),  6  L.  Ed.  358. 
Fed.    402,    decided    shortly    before 


§    14]    INTERSTATE  COMMERCE  UNDER  FEDERAL  CONSTITUTION.  2.J 

nations.^  This  case  arose  upon  tlie  great  lakes,  but  the  rnJe 
was  subsequently  extended  to  cases  arising  upon  the  navigable 
rivers  of  the  United  States  where  there  was  no  ebb  and  flow 
of  the  tide.- 

Later  it  was  held  that  a  stream  lying  wholly  within  a  state 
and  forming  by  its  junction  witb  Lake  Micliigan  a  continuous 
highway  for  commerce,  both  with  other  states  and  with  foreign 
nations,  was  a  navigable  water  of  the  United  States.^  In  this 
case  the  rule  was  announced,  that  those  rivers  must  be  re- 
garded as  public  navigable  rivers  in  law,  which  are  navigable 
in  fact,  and  that  they  constitute  navigable  waters  of  the  United 
States  within  the  meaning  of  the  acts  of  congress  in  contra- 
distinction between  the  navigable  waters  of  the  states,  when 
they  form  in  their  ordinary  condition  by  themselves,  or  by 
uniting  with  other  waters,  a  continued  highway  over  which 
commerce  is  or  can  be  carried  on  with  other  states  or  foreign 
countries,  in  the  customary  modes  in  which  such  commerce  is 
conducted  by  water.  It  is  immaterial  that  the  navigability  of 
such  a  river  may  be  interrupted  by  rapids  and  falls  over  which 
portages  are  required  to  be  made.* 

§  14  (13).  Erie  canal  subject  to  admiralty  jurisdiction. — In 
a  recent  case  the  admiralty  and  maritime  jurisdiction  has  been 
extended  to  the  Erie  canal,  which  lies  wholly  within  the  state 
of  New  York,  on  the  ground  that  it  connects  navigable  waters 
and  is  a  great  highway  of  commerce  between  ports  of  different 
states  and  foreign  countries,  and  is,  therefore,  a  navigable  wa- 
ter of  the  United  States  Avithin  the  legitimate  scope  of  the  ad- 
miralty jurisdiction  of  the  courts  of  the  United  States.  In  this 
ease  it  was  adjudged  that  the  enforcement  of  a  lien  in  rem  for 
repairs  to  a  canal  boat  engaged  in  traffic  on  the  Erie  canal  and 

1  The  Genesee  Chief,  12  How.  der  valid  coasting  license  on  vessel 
443  (1851),  13  L.  Ed.  1058.  in  the  lakes  was  engaged  in  inter- 

2  The  Magnolia,  20  How.  296  state  commerce  and  was  not  sub- 
(1857),  15  L.  Ed.  909;  Fretz  v.  ject  to  state  or  municipal  license 
Bull,  12  How.  466,  13  L.  Ed.  106S  *  The  Montello,  20  Wall.  430 
(1851).  (1874),   22  L.   Ed.   391;    Escanaba 

8  The  Daniel  Ball,  10  Wall.  557  Co.    v.    Chicago,    107    U.     S.    678 

(1870),  19  L.  Ed.  999.     In  Ex  parte  (1882),   27   L.   Ed.  442;    Miller  v. 

Eaglesfield,  ISO  Fed.  558  (1910)  E.  The  Mayor,  109  U.  S.  385    (1883), 

D.  of  Wis.,  it  was  held  that  one  27  L.  Ed.  971;  In  re  Garnett,  141 

trrding  in  interstate  commerce  un-  U.  S.  1  (1891),  33  L.  Ed.  631. 


26         INTERSTATE  COMMERCE  UNDER  FEDERAL  CONSTITUTION.     [§    15 

the  Hudson  river,  and  at  a  port  in  the  state,  was  within  the 
admiralty  jurisdiction,  and  could  not  be  enforced  by  any  pro- 
ceeding in  tlie  courts  of  the  state  of  New  York,^ 

§  15  (14).  Jurisdiction  of  federal  courts  in  admiralty 
cases. — The  admiralty  and  maritime  jurisdiction  is  conferred 
by  the  constitution  upon  the  judicial  power,  and  not  in  ex- 
press terms  upon  the  legislative  power  of  the  federal  govern- 
ment. The  supreme  court  however  has  held  that  the  power 
of  legislation  upon  the  same  subject  must  necessarily  be  in  the 
national  legislature,  and  not  in  the  state  legislatures.  The 
federal  legislative  power  is  not  confined  to  the  boundaries  or 
class  of  subjects  Avhich  limit  and  characterize  the  power  to  reg- 
ulate commerce ;  but  in  maritime  matters  it  extends  to  all  mat- 
ters and  places  to  which  the  maritime  law  extends.  The  boun- 
daries and  limits  of  the  admiralty  and  maritime  jurisdiction 
are  matters  of  judicial  cognizance,  and  they  cannot  be  affected 
or  controlled  by  legislation,  whether  state  or  national.  The 
jurisdiction  of  the  federal  courts  in  maritime  eases,  therefore, 
is  broader  than  that  under  the  commerce  clause,  as  it  includes 
maritime  cases,  where  the  voyage  or  contract,  if  maritime  in 
character,  is  made  to  be  performed  wholly  within  a  single 
state.-  Under  the  judiciary  act  of  1789  the  jurisdiction  of 
the  courts  of  the  United  States  is  exclusive  in  all  cases  of  ad- 
miralty and  maritime  jurisdiction,  saving  to  suitors  a  common- 
law  remedy,  where  the  common  law  is  competent  to  give  it.' 

§  16  (15).  State  corporations  in  interstate  commerce. — The 

right  of  a  state  corporation  to  engage  in  business  in  another 
state  by  locating  therein,  without  the  permission  of  that  state, 

1  The  Robert  "W.  Parsons,  191  U.  2  in  re  Garnett,  141  U.  S.  1,  and 
S.  17  (1903),  48  L.  Ed.  73,  Justices  cases  cited,  35  L.  Ed.  631. 
Brewer,  Fuller,  Peckham  and  Har-  s  Sec.  711,  R.  S.  U.  S.  A  con- 
Ian  dissented  on  the  ground  that  tract  to  build  a  ship  is  not  a  mari- 
the  contract  was  not  a  maritime  time  contract,  and  a  lien  given  by 
contract  and  that  the  admiralty  a  state  law  for  materials  used  in 
jurisdiction  did  not  extend  to  con-  such  construction  can  be  enforced 
tracts  for  repairs  to  vessels  which  against  the  vessel  in  the  state 
were  incapacitated  for  foreign  court.  Iroquois  Trans.  Co.  v.  Ve- 
oommerce  and  designed  and  used  Laney,  205  U.  S.  354,  51  L.  Ed.  837 
exclusively  for  mere  local  traffic  (1907). 
within  the  state. 


§    16]    INTERSTATE  COMMERCE  UNDER  FEDERAL  CONSTITUTION.         27 

must  dopi'iid  u])oii  wlicllicr  IIk;  cofporatioii  is  engaged  in  car- 
rying on  interstate  comnieree.  In  this  connection  the  term 
"carrying  on  interstate  commerce"  is  limited  to  the  corpora- 
tions actually  engaged  in  carrying  on  interstate  commerce, 
that  is,  common  carriers  and  others  who  afford  the  facilities 
whereby  commerce  is  carried  on  among  tlie  states  or  actually 
carry  on  such  commerce  and  does  not  include  manufacturing 
and  trading  companies  making  interstate  shipments.  Thus  all 
public  carriers,  railroads,  steamboats,  telegraph  or  telephone 
companies,  bridge  and  ferry  companies  operating  in  different 
states,  are  carrying  on  interstate  commerce  in  this  sense.  The 
state  can  neither  exclude  corporations  of  this  class  actually  en- 
gaged in  interstate  commerce,  nor  can  it  impose  conditions 
upon  the  transaction  of  their  busines  in  the  state,  though,  it 
may  tax  their  property  employed  in  the  state. ^ 

Corporations  engaged  in  the  execution  of  contracts  for  the 
federal  government,  are  also  protected  as  to  such  business 
from  state  interference  or  control. - 

In  one  sense,  all  commercial  business  between  citizens  of  dif- 
ferent states  is  interstate  commerce,  and  the  manufacturer 
who  ships  his  goods  to  the  purchasers  in  another  state  is  en- 
gaged in  interstate  commerce.  This  commerce  is  protected  by 
the  federal  power  against  discriminating  or  interfering  state 
legislation,  and  in  such  protection,  there  is  no  distinction  be- 
tween non-resident  individuals  and  corporations.  Corpora- 
tions, it  is  true,  are  not  citizens  within  the  meaning  of  the  con- 
stitution,^ providing  that  citizens  of  each  state  shall  he  enti- 
tled to  all  the  privileges  and  immunities  of  the  citizens  of  the 
several  states,  though  they  are  persons  within  the  meaning  of 
the  fourteenth  amendment  and  are  therefore  entitled  to  due 
process  of  law  and  the  equal  protection  of  the  laws.  The  right 
to  engage  in  interstate  commerce  does  not  depend  upon  citi- 
zenship, and  the  capacity  of  the  foreign  coporation  to  carry  on 
such  business  must  be  determined  by  its  own  charter,  granted 
by  the  state  of  its  creation,  and  by  the  law  of  the  state  in 

1  Western     Union     Tel.     Co.     v.  Co.,  ITS  Fed.  721,  Cir.  Ct.  E.  D.  of 

Kansas.    216    U.    S.    1,    54    L.    Ed.  Penn.  (1909). 

355  (1909) ;  Pullman  Co.  V.  Kansas,  s  Constitution,   art.   IV.,   sec.   2; 

216  U.  S.  56,  54  L.  Ed.  378  (1909).  Crutcher  v.  Kentucky,  141  U.  S.  47 

3U.  S.  to  use  V.  Fidelity  Guar.  (1901),  35  L.  Ed.  649. 


28         INTERSTATE  COMMERCE  UNDER  FEDERAL  CONSTITUTION.    [§   16 


■which  it  is  cariying  on  business.  The  manufacturing  or  trad- 
ing company  incorporated  and  doing  business  under  the  laws 
of  one  state  can  send  its  commercial  travelers  soliciting  sales 
through  other  states,  and  may  ship  its  goods  to  the  purchasers, 
or  factors,  and  such  business  cannot  be  interfered  with  by  the 
states  in  the  exercise  of  either  their  taxing  or  police  powers. 
Such  interstate  commerce  does  not  constitute  a  "doing  of  busi- 
ness" within  the  state. ^  But  while  the  foreign  manufactur- 
ing or  trading  corporation  may  sell  its  goods  in  the  state,  or 
solicit  sales  in  the  transaction  of  interstate  commerce,  it  can- 


1  Cooper  V.  Ferguson,  113  U.  S. 
727  (1884),  28  L.  Ed.  1137.  In  But- 
ler Brothers  Shoe  Co.  v.  U.  S.  Rub- 
ber Co.,  C.  C.  A.  8th  Cir.  156  Fed.  1, 
in  holding  that  a  foreign  corpora- 
tion consigning  goods  to  its  factor 
business  there,  is  engaged  in  inter- 
in  a  state,  who  conducts  all  the 
state  commerce  and  is  not  doing 
business  in  the  latter  state,  within 
the  meaning  of  the  statute  relative 
to  the  admission  of  foreign  corpo- 
rations, the  court  said  that  the 
broad  statement  in  Paul  v.  Vir- 
ginia, 8  Wall.  168,  that  a  state  may 
exclude  a  foreign  corporation  from 
business  or  may  condition  its  ad- 
mission to  do  business  in  the  state 
by  such  terms  as  it  may  deem 
proper,  had  been  qualified,  and  the 
following  exceptions  thereto  estab- 
lished by  the  decisions  of  the  su- 
preme court. 

(a)  Every  corporation  empow- 
ered by  state  of  its  creation  to  en- 
gage in  interstate  commerce,  may 
carry  on  that  commerce  in  sound 
and  recognized  articles  of  con- 
gress in  every  state  of  the  Union. 
Every  prohibition  and  obstruction 
or  burden  which  the  other  states 
attempt  to  impose  upon  such  busi- 
ness is  unconstitutional  and  void. 


(b)  Every  corporation  of  every 
state  which  is  in  the  employ  of  the 
United  States  has  the  right  to  ex- 
ercise the  necessary  corporated 
powers  and  to  transact  the  requi- 
site business,  to  discharge  the 
duties  of  that  employment  in 
every  other  state  in  the  Union, 
without  let  or  hindrance  from  the 
latter. 

(c)  Every  corporation  of  every 
state  has  the  absolute  right  to  in- 
stitute, maintain  and  defend  in  the 
federal  courts  and  to  remove  to 
those  courts  its  suits  in  any  other 
state  in  the  cases  and  on  the  terms 
prescribed  by  the  acts  of  congress. 
This  right  of  removal,  however,  by 
a  foreign  corporation  doing  busi- 
ness in  the  state  is  subject  to  the 
power  of  the  state  to  provide  that 
the  license  of  any  such  company  to 
do  business  in  the  state  through 
the  comity  of  the  state  should  be 
revoked  if  the  company  should  re- 
move to  the  federal  court  a  case 
which  has  been  commenced  in  a 
state  court.  It  is  immaterial  what 
is  the  motive  of  the  state  in  the 
exercise  of  its  lawful  power.  See 
Security  Mutual  Life  Ins.  Co.  v. 
Prewitt,  202  U.  S.  246,  50  L.  Ed. 
1013. 


§    IG]     INTEK.STATE  CUM-MKKCE  UNDER  FEDERAL  CONSTITUTION.  2'J 


not  establish  a  business  office  in  the  state  for  the  transaction 
of  intrastate  business  without  the  consent  of  the  state.  As  a 
state  has  the  right  to  exclude  foreign  corporations  from  local 
business  it  necessarily  has  involved  therein  the  right  to  impose 
conditions  upon  their  admission  into  the  state  to  transact  such 
business.^ 

The  state  power  of  prohibiting,  absolutely  or  conditionally, 
the  foreign  corporations,  not  engaged  in  interstate  commerce 
in  the  constitutional  sense  from  doing  business  in  the  state  is 
illustrated  by  the  rulings  of  the  supreme  court  already  referred 
to  sustaining  state  statutes  regulative  of  the  insurance  business. 
See  §  9  supra.  Thus,  the  provisions  of  state  statutes  pre- 
scribing terms  and  conditions  of  insurance  contracts  have  been 
held  to  be  written  into  the  policy  contracts  made  by  the  par- 
ties, over-riding  the  will  of  the  parties  and  making  contracts 
for  them  contrary  to  their  expressed  intent.-  These  statutes 
were  sustained  on  the  theory  that  tlie  state  had  the  power  to 
determine  the  conditions  under  which  the  insurance  busi- 
ness should  be  conducted,  to  the  extent  of  writing  these  condi- 
tions in  the  policies  for  the  parties  and  controlling  the  terms  of 
their  contracts,  and  in  the  case  of  foreign  corporations  such 
conditions  would  be  enforced  as  conditions  imposed  upon  their 
being  permitted  to  do  business  in  tlie  state,  and  to  which  the 
companies  are  presumed  to  assent  by  doing  business  in  the  state 
under  its  laws.'' 


1  Waters  Pierce  Oil  Co.  v. 
Texas,  177  U.  S.  28  (1900),  44  L. 
Ed.  657;  Philadelphia  Fire  Ass'n  v. 
New  York,  119  U.  S.  110  (1SS6),  30 
L.  Ed.  342. 

2  Orient  Insurance  Co.  v.  Daggs, 
172  U.  S.  557  (1899),  43  L.  Ed. 
552;  Equitable  Life  Assurance  Soc. 
V.  Clements,  140  U.  S.  226,  35  L. 
Ed.  497  (1890);  New  York  Life 
Ins.  Oo.  V.  Cravens,  178  U.  S.  389 
(1900),  44  L.  Ed.  1116. 

8  In  mutual  life  insurance  It  is 
obvious  that  the  writing  of  differ- 
ent state  statutes  into  the  policy- 
contracts  is  necessarily  destructive 


cf  the  insurance  scheme,  which  is 
based  upon  the  uncertainty  of  the 
individual  life  and  the  compara- 
tive certainty  of  the  average  life 
ascertained  from  human  experi- 
ence, and  which  therefore  contem- 
plates the  union  of  the  interests  of 
a  large  number  of  persons  resident 
in  different  states  and  countries 
and  the  administration  of  a  fund 
for  the  mutual  benefit  under  a 
single  applicatory  law.  New  York 
Life  Ins.  Co.  v.  Statham,  93  U.  S. 
21,  23  L.  Ed.  789;  Bogardus  v.  In- 
surance Co.,  101  N.  Y.  329. 


30         INTERSTATE  COMMERCE  UNDER  FEDERAL  CONSTITUTION.     [§    17 

§  17  (16).  When  transit  ends;  the  original  package  in  inter- 
state commerce. — The  "original  package"  rule,  which  has  been 
the  subject  of  extended  judicial  discussion  both  in  relation  to 
the  taxing  power  as  well  as  the  police  power  of  the  state,  was 
first  declared  in  1827,  in  Brown  v.  ]\Iaryland.^  This  case  in- 
volved the  validity  of  a  statute  of  Maryland,  requiring  every 
importer  of  foreign  merchandise  to  take  out  a  license,  paying 
therefor  fifty  dollars.  The  court  admitted  the  difficulty  of  set- 
ting a  time  when  the  taxing  power  of  the  state  should  begin, 
but  fixed  it  as  beginning  when  the  original  package  in  which 
the  goods  had  been  imported  was  broken  up  or  sold,  and  thus 
was  first  laid  down  the  "original  package"  rule.  While  the 
court  has  adhered  to  this  rule  in  respect  to  state  taxation  of 
foreign  importations,  it  has  not  been  extended  to  interstate 
commerce,  so  that  goods  brought  from  one  state  into  another 
are  subject  to  the  taxing  power  of  the  state,  whether  they  are 
in  the  original  package  or  not;^  that  is  to  say,  such  goods 
which  have  reached  their  destination  in  the  state  may  be  taxed 
as  property  in  common  with  the  other  property  in  the  state, 
when  the  tax  is  levied  without  discrimination  as  between  domes- 
tie  and  non-domestic  goods. ^ 

There  is  a  distinction,  however,  between  the  taxing  power 
of  a  state  and  its  police  power  with  reference  to  the  original 
packages  in  interstate  shipments.  In  the  absence  of  legisla- 
tion by  congress,  commerce  between  the  states  must  be  free, 
and  the  right  to  sell  goods  imported  is  an  inseparable  incident 
of  the  right  to  import.  Congress  alone  can  act  as  to  the  ad- 
mission of  goods  from  one  state  to  another,  and  its  non-action 
means  that  the  commerce  must  be  free.*    This  freedom  of  trans- 

1 12   "Wheat.   419,  6   L:   Ed.   678.  the  line  could  be  drawn  more  ac- 

Twenty  years  later  Chief   Justice  curately. 

Taney  said  in  his  opinion  in  the  2  Woodruff  v.  Parham,   8   Wall. 

License  Cases,  5  How.  1.  c.  505,  12  123   (1868),  19  L.  Ed.  382;   Brown 

L.    Ed.    256,    that   he   ar^ed    this  v.  Houston,  114  U.  S.  622   (1885), 

case  for  the  state  of  Maryland,  but  29  L.  Ed.  257;  Pittsburg,  etc.  Coal 

that  since  then  matured  reflection  Co.  v.  Bates,  156  U.  S.  577  (1895), 

had  convinced  him  that  the  rule  39  L.  Ed.  538. 

laid  down   by  the  supreme  court  s  American  Steel  &  Wire  Co.  v. 

was  a  just  and  safe  one.    It  was  a  Speed,  192  U.  S.  500,  48  L.  Ed.  538 

very  difficult  question  for  the  judi-  (1904). 
cial  mind,  but  he  did  not  see  how  4  Bowman   v.   Railway   Co.,    125 


§    17]    INTERSTATE  COMMERCE  UNDER  FEDERAL  CONSTITL'TIOX.         31 


portation  and  of  sale  extends  to  goods  in  tlieir  original  pack- 
ages, when  imported  in  packages.  Thus,  the  original  package 
first  introduced  in  Brown  v,  Maryland,  in  reference  to  foreign 
importations,  becomes  material  in  interstate  commerce  in  lim- 
iting the  police  power  of  the  state.  An  original  package  in  in- 
terstate commerce  means  the  bos  or  case  in  which  the  goods 
Avere  shipped,  and  not  the  package  in  which  they  were  placed 
by  the  manufacturer  when  manufactured  and  before  they  were 
placed  in  the  larger  boxes  for  shipment.'  The  importation 
however  must  be  made  in  the  usual  manner  prevalent  among 
honest  dealers,  and  in  a  hona  fide  package  usual  for  shipmcnt.- 

The  original  package  rule  was  one  of  convenience,  is  not  de- 
fined in  any  statute  of  the  United  States,  and  is  of  course  only 
applicable  where  property  is  imported  in  packages.  As  to 
other  property,  such  as  live  stock,  the  commercial  transit  ends 
when  it  is  delivered  to  the  consignee.  Thus  a  flock  of  sheep 
driven  through  a  state  is  a  subject  of  interstate  commerce  and 
protected  by  the  federal  power  against  state  taxation,  although 
the  sheep  Avere  permitted  to  graze  during  their  journey.^  Prop- 
erty in  commercial  transit,  however  transported,  through  a 
state  or  into  a  state,  is  not  subject  to  the  taking  power  of  a 
state,  and  this  immunity  extends  until  the  termination  of  the 
shipment  by  the  delivery  to  the  consignee.*     Goods,  to  be  ex- 


U.  S.  4C5  (188S),  31  L.  Ed.  700; 
Lelsy  V.  Hardin,  135  U.  S.  100 
(1890),  34  L.  Ed.  128,  overruling, 
the  License  Cases,  5  How.  504 
(1847),  12  L.  Ed.  256;  Lyng  v. 
Michigan.  135  U.  S.  101,  34  L.  Ed. 
150  (1890).  The  distinction  be- 
tween the  state  police  power  and 
the  state  taxing  power  in 
relation  to  "original  packages"  im- 
ported from  other  states  is  illus- 
rated  in  two  Iowa  cases  (January, 
1905),  decided  by  the  supreme 
court.  In  Am.  Exp.  Co.  v.  Iowa, 
196  U.  S.  133,  49  L.  Ed.  471,  the 
police  interference  with  a  liquor 
importation  was  denied;  while  In 
Cook  V.  County  of  Marshall,  196  U. 
S.  261,  49  L.  Ed.  471,  tax  on  a  ciga- 
rette importation  was  sustained. 


1  May  V.  New  Orleans  178  U.  S. 
496  (1900),  44  L.  Ed.  1165,  affirnv 
ing  51  La.  Ann.  1064,  four  justices 
dissenting;  SchoUenberger  v. 
Pennsylvania.  171  U.  S.  1  (1898), 
43  L.  Ed.  49. 

2  Austin  V.  Tennessee,  179  U.  S. 
343  (1900),  45  L.  Ed.  224.  See  also 
Cook  V.  County  of  Marshall,  supra. 

8  Kelley  v.  Rhoades,  188  U.  S.  1, 
47  L.  Ed.  359;  Diamond  Match  Co. 
V  Ontonogon,  188  U.  S.  82  (1903), 
47  L.  Ed.  394. 

4  Rhodes  v.  Iowa.  170  U.  S.  412 
(1S9S).  42  L.  Ed.  lOSS.  In  Simp- 
son Crawford  Co.  v.  Burroughs  of 
Atlantic  Highlands,  15S  Fed.  372. 
C.  C.  N.  J.,  goods  were  sold  by 
complainants  in  New  York  City 
for  delivery  to  customers  in  Atlan- 


32         INTERSTATE  COMMERCE  UNDER  FEDERAL  CONSTITUTION.    [  §    18 

empt,  however,  must  be  actually  in  commercial  transit,  that  is, 
the  transit  must  have  commenced  by  the  delivery  to  the  car- 
rier for  shipment.^  It  does  not  follow  however  that  this  im- 
munity from  the  state  taxing  power  would  prevent  the  prop- 
erty from  being  subject  of  an  illegal  agreement  of  combination 
in  violation  of  the  anti-trust  act  (see  infra,  §  69).  The  termina- 
tion of  the  transit  means  that  the  property  is  subject  to  taxa- 
tion in  common  with  other  property;  but  it  cannot  be  subjected 
to  any  discriminating  regulations  on  account  of  its  foreign 
origin. 

§  18  (17).  The  Wilson  bill  of  1890.— The  judicial  application 
of  the  original  package  rule  in  interstate  commerce  to  the 
police  power  of  the  state  and  the  consequent  inability  of  the 
state  to  exclude  the  importation  of  liquors  resulted  in  the  pas- 
sage by  congress  in  !!890  of  the  so-called  "Wilson  bill,^ — pro- 
viding that  liquors  transported  into  any  state  or  territory 
should,  upon  arriving  in  such  state  or  territory,  be  subject  to 
the  operation  and  effect  of  its  laws  enacted  in  the  exercise  of 
its  police  powers  to  the  same  extent  and  in  the  same  manner 
as  though  such  .liquors  had  been  there  produced,  and  should 
not  be  exempt  therefrom  by  reason  of  being  introduced  in  the 
original  packages  or  otherwise. 

This  act  made  effective  the  state  prohibition  of  the  local  traf- 
fic in  imported  liquors. 

Its  constitutionality  was  contested  on  the  ground  that  con- 
gress could  not  delegate  its  control  over  interstate  commerce 
to  the  states.  It  was  sustained,  however,  by  the  supreme 
court.'  The  court  said  that  in  surrendering  their  own  power 
over  interstate  commerce  the  states  did  not  secure  absolute 

tic  Highlands,   N.   J.,  where  they  Stats.  313,  c.  728.   The  same  princi- 

were    delivered    from    the    steam-  pie   was  also   applied   in   1900,   in 

boats  to  complainant's  wagons  for  making  effective  the  game  laws  of 

delivery  to  the  purchasers,  and  It  the  states.  Act  of  May  25,  1900,  3 

was  held  that  the  entire  transac-  Comp.  Stats.  U.  S.  p.  3181,  and  in 

tion    constituted    interstate    com-  Act.  of  May  9,  1902,  in  making  ef- 

merce,   and   that   the   license   tax  fective  state  laws  as  to  "oleomar- 

tliereon  was  invalid.  garine,"  "butterine"  and  other  im- 

1  Coe    V.    Errol,    116    U.    S.    517  itations  of  butter. 

(1886),  29  L.  Ed.  715.  sin    re   Rahrer,    140    U.    S.    545 

.  2Act    of    August,    1890,    and    26  (1891),  35  L.  Ed.  572. 


§    19]    IXTEKSTATE  COMMERCE  UNDER  FEDERAL  CONSTITUTION.         33 

freedom  in  sucli  commerce,  but  only  tlie  protection  from  en- 
encroac-hmeut  aiforded  by  eonforiiiiii^'  its  execution  to  congress. 
The  court  held  that  liquors  transported  into  the  state  and 
there  sold  after  the  passage  of  this  act  of  August,  1890,  became 
subject  to  the  then  existing  laws  of  the  state  as  to  the  sale  of 
liquors;  that  congress  did  not  use  terms  of  permission  for  the 
state  to  act,  but  simi)ly  removed  an  impediment  to  the  enforce- 
ment of  state  laws  in  resi)eet  to  inqjorted  packages  in  their 
original  condition  created  by  the  absence  of  a  specific  utterance 
on  its  part.  It  imparted  no  power  to  the  state  not  then  pos- 
sessed, but  allowed  imported  jiroperty  to  fall  at  once  upon 
arrival  within  the  local  jurisdiction. 

§  19.  The  limitations  of  the  state  control  of  the  liquor  traflBc. 

While  the  Wilson  Act  is  effective  in  enabling  a  state  to  con- 
trol the  sale  of  liquors  imported  from  other  states,  it  does  not 
prevent  the  importation  and  consumption  by  the  consignee. 
This  is  because  the  term  "arrival"  as  used  in  the  Wilson  bill, 
has  been  construed  by  the  supreme  court  to  mean  the  comple- 
tion of  the  shipment  by  delivery  by  the  consignee  in  the  state 
and  not  by  the  arrival  at  the  station  of  the  carrier.^  The  court 
said  that  the  act  was  not  intended  to,  and  did  not,  cause  the 
power  of  the  state  to  attach  to  an  interstate  commerce  ship- 
ment Avhilst  the  merchandise  w^as  in  transit  under  such  ship- 
ment and  until  its  arrival  at  the  point  of  destination  and  de- 
livery there  to  the  consignee.  It  is  immaterial  that  the  pack- 
ages of  liquor  are  shipped  by  a  c.  o.  d.  interstate  shipment,  and 
the  agent  of  the  express  company  agrees  to  hold  the  shipment 
to  suit  the  convenience  of  the  consignee  in  paying  for  the 
liquor  and  taking  it  away.-  Neither  can  intoxicating  liquors 
sshipped  c.  o.  d.  into  a  state  from  another  state  be  seized  while 
in  the  hands  of  the  express  company  on  the  ground  that  the 
sale  to  the  consignee  was  consummated  at  the  time  of  ship- 
ment so  that  the  merchandise  was  at  his  risk.^  Nor  e^n  the 
agent  of  an  express  company  be  prosecuted  for  violation  of  a 
state  statute  for  furnishing  knowingly  intoxicating  liquor  to 

1  Rhodes  v.  Iowa,  supra.  reversing  the  Court  of  Appeals  of 

2  Adams    Express    Co.    v.    Ken-      Ky.,  87  S.  W.  1111. 

tucky,  206  U.  S.  129,  51  L.  Ed.  9S7,  s  American  Express  Co.  v.  Iowa, 

19G  U.  S.  133,  49  L.  Ed.  417  (1905). 


34         INTERSTATE  COMMERCE  UNDER  FEDERAL  CONSTITUTION.    [§    20 

an  inebriate,  from  another  state,  the  agent  paying  the  express 
charges,"'  as  the  statute  construed  to  cover  such  case  was  held 
to  be  an  attempt  to  regulate  interstate  commerce. 

The  liquor  law  of  South  Carolina  was  held  void  ^  because 
it  imposed  conditions  upon  the  shipment  into  South  Carolina 
from  other  states  of  liquor  to  a  consumer  who  had  purchased 
it  for  his  own  use,  and  not  for  sale,  as  the  Wilson  Act,  while 
giving  to  the  state  plenary  power  to  regulate  the  sale  of  liqu- 
ors, did  not  permit  the  state  to  prevent  an  individual  from 
ordering  liquors  from  outside  of  the  state  for  his  own  con- 
sumption. 

A  state,  in  the  exercise  of  its  police  powers  within  the  mean- 
ing of  the  Wilson  Act,  may  lawfully  impose  an  inspection  fee 
upon  beer  or  other  malted  liquors  shipped  from  other  states 
into  the  State  ftnd  held  for  consumption  therein;  and  it  was 
held  immaterial  that  such  an  act  was  denominated  as  an  "in- 
spection laAv"  and  did  not  provide  an  adequate  inspection.^ 
A  state  may  also  exact  a  license  fee  for  the  sale  of  liquors 
within  the  state  on  board  a  ferry  boat  engaged  in  interstate 
commerce  and  making  landings  at  a  port  of  the  state.* 

§  20  (18).  A  state  cannot  tax  interstate  commerce. — Al- 
though the  necessity  for  the  regulation  of  commerce  was  the 
great  moving  force  in  the  adoption  of  the  constitution,  and  was 
thoroughly  discussed  in  the  proceedings  of  the  convention  and 
in  the  Federalist,  there  is  in  neither  any  reference  to  any  pos- 
sible interference  with  the  taxing  power  of  the  state  growing 
•out  of  such  regulation.  The  law  of  federal  restraints  upon 
state  taxation  has  been  developed  upon  the  fundamental  prin- 
ciple of  the  supremacy  of  the  federal  authority.     The  exemp- 

1  Adams  Express  Co.  v.  Ken-  to  compel  the  express  company  to 
tucky,  214  U.  S.  218,  53  L.  Ed.  972  receive  shipments  of  liquor  for  de- 
(1909).  livery  to   customers   in   Oklahoma 

2  Vance   v.    Vandercook,    170    U.  under  Interstate  Commerce  Act. 

S.   438,   42   L.   Ed.   1100;    Crescent  s  pabst    Brewing    Co.    v.    Cren- 

Liquor  Co.  v.  Piatt,  148  Fed.  894,  shaw,  198  U.  S.  17,  49  L.  Ed.  925. 

C.  C.  W.  v.,  holding  invalid  Act  of  4  Fobpiano  v.   Speed,   199  U.   S. 

West  Va.     In  U.  S.  ex  rel.  Fried-  501,  50   L.   Ed.   288,  affirming  113 

man  v.  U.  S.  Express  Co.,  180  Fed.  Tenn.  167.     See  also  Meyer  et  al.  v. 

1006,  the  Circuit  Court  of  West.  Mobile,  147  Fed.  843,  C.  C.  of  Ala., 

Dist.  of  Ark.  held  that  petitioner  holding   valid   a   liquor   ordinance 

v,'a.s  entitled  to  writ  of  mandamus  under  the  Wilson  Act. 


§    21]    INTERSTATE  COMJIERCE  UNDER  FEDERAL  CONSTITUTION.       .35 

tion  from  state  taxation  of  the  means  employed  by  the  federal 
government  for  carrying  on  its  functions  was  first  declared  in 
1819,  in  jMcCnlloch  v.  IMaryland/  and  the  principle  was  latei- 
extended  in  1827,  in  I'lowu  v.  ^Maryland,-'  to  the  liiiiitation  of 
the  state  taxing  authority  by  reason  of  the  national  control 
over  foreign  commerce. 

Under  the  rule  declared  by  the  supreme  court  for  the  first 
time  in  1SS6,^  wliieh  has  since  been  consistently  adhered  to  by 
the  court,  the  business  of  carrying  on  interstate  commerce 
cannot  be  taxed  at  all,  and  as  the  riglit  to  bring  goods  from 
other  states  includes  the  right  to  sell  them  and  to  solicit  sales 
therefor,  as  well  as  to  deliver  the  property  sold,  the  state  can- 
not tax  the  right  to  sell  or  deliver,  or  to  solicit  sales,  whether 
in  the  form  of  license  tax  or  otherwise.  It  is  immaterial  that 
the  tax  is  without  discrimination,  as  between  domestic  and  for- 
eign drummers,  as  interstate  commerce  cannot  be  taxed  at  all.* 

§  21  (19).  But  a  state  can  tax  the  property  employed  in  in- 
terstate commerce. — "While  a  state  cannot  tax  interstate  com- 
merce, that  is,  the  privilege  of  carrying  on  such  commerce,  it 
can  tax  the  property  in  its  jurisdiction  empolyed  in  carrying 
on  such  commerce.  The  difficulty  of  defining  the  line  where 
the  state  and  federal  powers  meet  in  such  cases  is  illustrated 
by  the  not  infrequent  dissents  of  members  of  the  supreme 
court  in  cases  involving  these  questions  of  conflict  between  the 
state  and  federal  power.^  No  question  is  made  as  to  the  power 
of  a  state  to  tax  the  tangible  property  within  its  jurisdiction 
of  a  railroad,  telegraph  or  other  company  engaged  in  inter- 
state commerce,  but  the  difficulty  has  been  found  in  determin- 
ing what  portion  of  the  intangible  property  of  such  corpora- 
tions can  be  located  within  a  state  so  as  to  be  subject  to  its 
taxing  power.  Thus,  has  been  formulated  the  so-called  "unit 
rule"  whereunder  the  entire  value  of  an  interstate  railroad, 

1  Supra.   §   5.  185  U.  S.  27  (1902),  46  L.  Ed.  785; 

2  Supra.  §  17.  Caldwell  v.  North  Car.,  187  U.  S. 
sRobbins  v.  Shelby  County  Tax-      622  (1902"),  47  L.  Ed.  S36:  N.  &  W. 

ing  District,  120  U.  S.  489   (1887),  R.  R.  Co.  v.   Sims,  191  U.  S.  441 

30  L.  Ed.  694.  (1902),  48  L.  Ed.  254. 

*Asher  v.  Texas,  128  U.  S.  129  b  Erie   R.    Co.   v,    Pennsylvania, 

(1888),  r!2  L.  Ed.  368;  Brennan  v.  158  T^  S.  431,  1.  c.  437   (1895),  39 

Titusville,  153  U.  S.  289  (1894).  38  L.  Ed.  1043. 
L.   Ed.  719;    Stockard   v.   Morgan, 


36         INTERSTATE  COMMERCE  UNDER  FEDERAL  CONSTITUTION.    [§    21 

tangible  as  well  as  intangible,  may  be  apportioned  upon  a 
mileage  basis  as  a  means,  prima  facie,  of  arriving  at  the  value 
of  the  property  within  the  state,  that  is,  the  state 's  proportion- 
ate part  of  the  value  of  the  entire  property.^ 

The  rule  of  the  "average  habitual  use"  has  also  been  form- 
ulated in  the  taxation  of  railroad  cars,  so  that  a  state  may  tax 
its  proportionate  part  of  the  property  actually  employed  in  its 
jurisdietion.- 

Thus  also  while  the  receipts  from  interstate  commerce  can- 
not be  taxed  as  such,  the  tax  may  be  levied  upon  the  corpora- 
tion, as  an  excise  or  franchise  tax,  which  may  be  apportioned 
on  the  basis  of  the  proportion  of  the  mileage  within  the  state 
to  the  total  mileage.^ 

These  rules,  however,  are  only  admissible  in  determining  the 
actual  value  of  the  property  in  the  state  for  the  purpose  of 
taxation,  and  will  not  authorize  the  taxing  by  a  state  of  the 
privilege  of  carrying  on  interstate  commerce  among  the  states, 
nor  the  taxation  of  property  permanently  outside  of  its  juris- 
diction."* 


1  State  Railroad  Tax  Cases,  92 
U.  S.  575  (1875),  23  L.  Ed.  663; 
Kentucky  Railroad  Tax  Cases,  115 
U.  S.  321  (1885),  29  L.  Ed.  414; 
Pittsburgh  etc.  R.  Co.  v.  Backus, 
154  U.  S.  421  (1894),  38  L.  Ed. 
1031;  C.  C.  C.  &  St.  L.  R.  Co.  v. 
Backus,  154  U.  S.  439  (1894),  38  L. 
Ed.  1041;  Western  Union  Tel.  Co. 
V.  Massachusetts,  125  U.  S.  530 
(1888),  31  L.  Ed.  790;  Massachu- 
setts V.  Telegraph  Co.,  141  U.  S.  40 
(1891),  35  L.  Ed.  628;  Western 
Union  Tel.  Co.  v.  Taggard,  163  U. 
S.  1  (1896),  41  L.  Ed.  49;  Adams 
V.  Ohio,  165  U.  S.  194  (1897),  41  L. 
Ed.  683;  Adams  Express  Co.  v. 
Kentucky,  166  U.  S.  171  (1897),  41 
L.  Ed.  960;  Henderson  Bridge  Co. 
V.  Kentucky,  166  U.  S.  150  (1897), 
41  L.  Ed.  953;  W.  U.  Tel.  Co.  v. 
Gottlieb,  190  U.  S.  412  (1903),  47 
L.  Ed.  1116. 

2  Pullman     Palace    Car    Co.    v. 
Pennsylvania,  141  U.  S.  18  (1891), 


35  L.  Ed.  613;  Marye  v.  B.  &  O.  R. 
Co.,  127  U.  S.  117  (1888),  32  L.  Ed. 
94;  American  Refrigerator  Transit 
Co.  V.  Hall,  174  U.  S.  70  (1899),  43 
L.  Ed.  899;  Union  Refrigerator 
Transit  Co.  v.  Lynch,  177  U.  S.  149 
(1900),  44  L.  Ed.  708;  Wisconsin  & 
M.  R.  Co.  V.  Powers,  191  U.  S.  379 
(1903),  48  L.  Ed.  229. 

3  The  State  Freight  Tax  Cases, 
15  Wall.  232  (1872),  21  L.  Ed.  146; 
Maine  v.  Grand  Trunk  R.  Co.,  142 
U.  S.  217  (1891),  35  L.  Ed.  994. 
Four  judges  dissenting. 

4  Fargo  V.  Hart,  193  U.  S.  490 
(1904),  48  L.  Ed.  761;  Galveston 
etc.  Co.  V.  Texas,  210  U.  S.  217,  52  L. 
Ed.  1131  (1908).  For  considera- 
tion of  the  many  questions  arising 
in  the  adjustment  of  the  taxing 
power  of  the  state  to  the  para- 
mount authority  of  congress  in 
interstate  commerce,  see  author's 
"Power  of  Taxation,"  chapters  HI 
and  VIII. 


§    22]    INTERSTATE  COMMERCE  UNDER  FEDERAL  CONSTITUTION.         37 

§  22  (20).  State  power  of  taxation  of  corporations  engaged 
in  interstate  commerce  summarized. — The  supreme  court/  iii 
holding  that  a  city  could  recover  from  an  interstate  telegraph 
company  a  reasonable  license  fee  for  the  occupation  of  its 
streets  by  telegraph  poles,  subject  however  to  the  determina- 
tion by  a  jury  of  the  reasonableness  of  the  charge,  said  that 
there  were  few  questions  more  important  or  more  embarrass- 
ing than  those  arising  from  the  efforts  of  the  states  or  munic- 
ipalities to  increase  their  revenues  by  collections  from  corpora- 
tions engaged  in  interstate  commerce,  but  that  the  following 
propositions  had  been  so  often  adjudicated  as  to  be  no  longer 
open  to  discussion:  First.  The  constitution  of  the  United 
States  having  given  to  congress  the  power  to  regulate  com- 
merce not  only  Avith  foreign  nations  but  among  the  several 
states,  that  power  is  necessarily  exclusive  whenever  the  sub- 
jects of  it  are  national  in  their  character  or  admit  of  only  one 
uniform  system  or  plan  of  regulation.  Second.  No  state  can 
compel  a  party,  individual  or  corporation,  to  pay  for  the  priv- 
ilege of  engaging  in  interstate  commerce.-  Third.  This  im- 
munity does  not  prevent  a  state  from  imposing  ordinary  prop- 
erty taxes  upon  property  having  a  situs  in  its  territory  and 
employed  in  interstate  commerce.  Fourth.  The  franchise  of  a 
corporation,  although  that  franchise  is  the  business  of  inter- 
state commerce,  is,  as  a  part  of  its  property,  subject  to  state 
taxation,  provided  the  franchise  is  not  derived  from  the  United 
States.'  Fifth.  No  corporation,  even  though  engaged  in  in- 
terstate commerce,  can  appropriate  to  its  own  use  property, 
public  or  private,  without  liability  to  charge  therefor. 

1  Atlantic,  etc.  Tel.  Co.  v.  Phila-  izens  of  the  United  States,  in  free 
delphia,  190  U.  S.  IGO  (1S9G),  47  L.  travel  through  the  states,  and  not 
Ed.  99.".  merely  as  an  attempted  regulation 

2  The  soliciting  of  traffic  for  an  of  commerce  among  the  states.  The 
interstate  railroad  is  exempt  from  opinion  of  Justice  Miller  quotes 
taxation.  McCall  v.  Cal.,  136  U.  S.  from  the  dissenting  opinion  of 
104  (1890),  34  L.  Ed.  391.  In  1868  Chief  Justice  Taney  in  the  Passen- 
before  the  adoption  of  the  four-  ger  Cases,  Infra,  §  23,  where  he 
teenth  amendment  it  was  held  in  concedes  that  the  state  tax  im- 
Crandall  v.  Nevada,  6  Wall.  35,  18  posed  on  foreigners  would  be  -in- 
L.  Ed.  745,  that  a  state  tax  upon  valid,  if  imposed  on  citizens, 
through  passengers  was  void  as  » N.  Y.  ex  rel.  v.  Miller,  202  U. 
inconsistent  with  the  rights  of  cit-  S.  584,  50  L.  Ed.  1155. 


CHAPTER  II. 

THE  CONCURRENT  AND  EXCLUSIVE  POWERS. 

§  23.  The  concurrent  and  exclusive  powers  distinguished. 

24.  The  supreme  court  on  the  three  classes  of  commerce  cases. 

25.  The  concurrent  state  power. 

26.  The  state  power  as  to  interstate  telegraph  companies. 

27.  Concurrent  power  in  interstate  railroad  transportation. 

28.  State  Sunday  laws  and  interstate  traffic. 

29.  State  laws  as  to  qualifications  of  employes  and  safety  of  public. 

30.  State  laws  concerning  separation  of  races  in  interstate  traffic. 

31.  Limitation  of  state  power  in  stoppage  of  through  trains. 

32.  State  regulation  of  contractual  relations  of  interstate   railroad 

and  shippers. 

33.  State  regulation  under  rules  of  common  law  in  state  courts. 

34.  The  concurrent  jurisdiction  in  live  stock  inspection  laws. 

35.  Effect   of   congressional   legislation   upon   concurrent   power   of 

state. 

36.  State  quarantine  laws. 

37.  Freedom  of  interstate  commerce. 

38.  Congressional  inaction  in  foreign  and  interstate  commerce  dis- 

tinguished. 

39.  Attachment  of  foreign  railroad  cars. 

40.  Rulings  of  the  state  courts  on  the  commerce  clause. 

§  23  (21) .  The  concurrent  and  exclusive  powers  distinguished. 

The  supremacy  of  the  federal  power  in  interstate  commerce 
was  declared  in  1824,  in  Gibbons  v.  Ogden  {supra,  §  6),  in  a 
ease  wherein  congress  had  exercised  its  power  by  authorizing 
the  granting  of  coasting  licenses,  and  the  decision  of  the  court 
therefore  was  based  upon  the  claim  of  an  exclusive  grant  by 
the  state  as  against  this  right,  under  authority  of  congress,  in 
the  navigation  of  the  public  waters  of  the  state.  The  question 
of  the  power  of  the  state  to  legislate  affecting  interstate  com- 
merce, when  congress  had  not  legislated  upon  the  subject, 
was  not  directly  involved  or  decided;  and  this  remained  a 
vexata  quccstio,  and  widely  different  views  were  expressed  by 
members  of  the  court,  until  a  definite  rule  was  declared  in 
1851.^     Thus  it  was  contended  on  the  one  hand  that  the  power 

1  Wilson    V.    Black    Bird    Creek      L.  Ed.  412;  New  York  v.  Miln,  11 
Marsh  Co.,  2  Peters,  245   (1829),  7      Peters,  102    (1837),  9  L.  E'd.  648; 


§    23]  THE   CONCURRENT   AND  EXCLUSIVE  POWERS.  30 

to  regulate  interstate  commerce  was  itself  a  unit,  and  the  grant 
to  congress  was  necessarily  exclusive,  and  no  part  of  this  regu- 
lation could  be  exercised  by  a  state;  and  on  the  other  hand 
that  the  grant  to  congress  was  not  itself  a  prohibition  to  the 
states,  and  that  this  authority  of  the  states  in  the  exercise  of 
their  sovereign  police  [)0\vers  was  complete  and  exclusive.^     . 

The  uncertainty  produced  by  these  differing  opinions  was 
shown  in  sustaining  a  New  York  statute  -  requiring  masters  of 
passenger  vessels  to  report  to  the  state  authorities  as  to  arriv- 
ing passengers;  while  a  few  years  later  statutes  of  New  York 
and  Massachusetts  imposing  a  tax  upon  passengers  arriving 
from  other  states  or  foreign  countries,  for  defraying  expenses 
of  police  laws  excluding  paupers  and  convicts,  the  surplus  to 
be  applied  to  state  purposes,  were  held  void.^ 

In  1846  the  laws  of  certain  of  the  New  England  states,  pro- 
hibiting or  restraining  ihe  introduction  of  spirituous  liquors 
were  sustained,  all  the  six  judges  filing  opinions,"  and  concur- 
ring in  the  judgment,  though  on  different  grounds. 

Finally,  in  1851,  the  rule  was  declared,  which  has  been  the 
basis  of  subsequent  adjudications,^  that  the  power  to  regulate 
commerce  is  one  which  includes  many  subjects,  various  and 
quite  unlike  in  their  nature,  and  that  whenever  these  subjects 
are  in  their  nature  national,  or  admit  only  of  one  uniform  sys- 
tem or  plan  of  regulation,  they  may  be  justly  held  to  belong 
to  that  class  over  which  congress  has  exclusive  power  of  reg- 
ulation ;  but  that  local  and  limited  matters,  not  national  in  their 
nature,  may  be  regulated  by  the  states  during  the  non-action 
of  congress.  The  action  of  congress  however  renders  void 
such  regulations  of  the  states  as  conflict  with  it.^ 

License      Cases,      5      How.      504  5  Cooley  v.  Board  of  "Wardens,  12 

(1847),  12  L.  Ed.  256;   Passenger  How.  299  (1851).  13  L.  Ed.  996. 

Cases,  7   How.   283    (1849),  12   L.  c  The   rule   has   heen   stated   in 

jj(j   702.  subsequent    opinions    without    tlie 

1  See  opinions  in  the  Passenger  qualification  of  the  word  "only," 
and  License  Cases,  supra.  so  as  to  read  "admit  of  one  uni- 

2  New  York  v.  Miln,  supra.  form    system    or   plan    of   regula- 
s  Passenger    Cases,    supra,    four      tion."     See  State  Freight  Tax,  15 

justices  dissenting.  Wall.  232,  21  L.  Ed.  146;  Welton  v. 

4 License  Cases,  supra.    This  de-      Missouri,  91  U.  S.  1.  c.  280  (1875), 

cision     was     overruled     in     1890;       23     L.     Ed.     349;     Henderson     v. 

Leisy  V.  Harding,  supra,  §  17.  Mayor,  92  U.  S.  1.  c.  259  (1875),  23 

L.  Ed.  543. 


40  THE   CONCURRENT   AND   EXCLUSIVE  POWERS.  [§    24 

§  24.  (22).  The  supreme  court  on  the  three  classes  of  com- 
merce cases. — The  supreme  court  in  denying  the  power  of  a  state 
to  regulate  tolls  upon  an  interstate  bridge  without  the  assent  of 
congress,  reviewed  its  decisions  upon  the  construction  and 
application  of  the  commerce  clause  of  the  constitution,  and 
said  they  were  divisible  into  three  distinct  classes.^  The  first, 
where  the  power  of  the  state  was  exclusive,  including  the  con- 
struction of  highways,  turnpikes,  railroads  and  canals,  between 
points  in  the  same  state,  and  their  regulation  for  public  use, 
the  operating  of  bridges  over  navigable  streams  and  regulat- 
ing navigation  over  internal  waters  which  did  not  by  them- 
selves or  in  connection  with  other  waters  form  a  continuous 
highway  for  interstate  or  foreign  commerce.  In  the  second 
class  were  included  the  cases  of  concurrent  jurisdiction  of  the 
states,  and  wherein  it  is  not  the  existence,  but  the  exercise  of 
the  power  of  congress  which  is  incompatible  with  the  exercise 
of  the  same  power  by  the  states.  In  the  tJiird  class  the  court 
included  those  cases  where  the  power  of  congress  was  exclu- 
sive, and  it  was  not  the  exercise  but  the  existence  of  the  power 
in  congress  which  excluded  the  power  of  the  state.  The  first 
class  requires  no  distinct  consideration.  The  dividing  line  be- 
tween the  second  and  third  class  has,  however,  been  ques- 
tioned in  a  number  of  cases,  as  will  be  seen  in  the  succeeding 
sections. 

§  25  (23).  The  concurrent  state  power. — The  concurrent  ju- 
risdiction of  the  states,  as  it  is  called,  may  be  exercised  in  the 
second  of  the  classes  of  cases  mentioned  in  the  preceding  sec- 
tion, Avhere  it  is  not  the  existence  but  the  exercise  of  the  power 
of  congress  which  is  incompatible  with  the  exercise  of  the  state 
power. 

Thus,  the  regulation  of  pilots  has  an  intimate  connection  with 
commerce,  and  discriminating  state  laws  might  be  enacted  on 
the  subject,  yet  the  nature  of  the  power  is  such  that  it  is  likely 
to  be  best  provided  for  by  the  legislative  discretion  of  the  sev- 
eral states,  adapted  to  local  needs.^ 

In  this  essentially  local  class  are  the  state  inspection  laws.^ 
state  quarantine  laws,*  and  laws  regulating  the  improvement 

1  Covington,   etc.   Bridge  Co.   v.  2  Cooley  v.  Port  Wardens,  supra. 

Kentucky,  154  U.  S.  204  (1894),  38  s  See  §  10,  supra. 

L.  Ed.  962.  *  Morgan's,    etc.,    Co.    v.    Loiiisi- 


§    26]  THE    COXCURREXT    AND   EXCLUSIVE    POWERS.  41 

of  navigable  waters  within  the  jurisdiction  of  u  state,  or  the; 
use  of  bridges  over  such  waters  which  have  been  sustained. 
In  the  Mobile  harbor  casie  cited/  the  court  said  that  perhaps 
some  of  the  divergent  views  noticed  upon  this  question  of  state 
power  among  former  judges,  may  have  arisen  from  not  always 
bearing  in  mind  the  distinction  between  commerce  as  strictly 
defined  and  its  local  aids  or  instrumentalities,  or  measures 
taken  for  its  improvement.  In  the  Chicago  case  -  the  court 
sustained  the  state  control  of  the  construction,  repair  and  reg- 
ulation, and  use  of  the  bridges  over  the  Chicago  river,  saying 
that  until  congress  acted,  the  power  of  the  state  over  the 
bridges  was  plenary. 

In  the  same  class  are  state  laws  regulating  wharves,  piers 
and  clocks,^  the  construction  of  bridges,*  and  establishing  fer- 
ries over  navigable  rivers  within  state  jurisdiction.  Local  reg- 
ulations, however,  cannot  impose  a  tax  or  charge  upon  inter- 
state commerce.  Thus,  while  a  state  can  exact  a  toll  or 
compensation  for  a  specific  improvement  of  a  navigable  water 
within  its  jurisdiction.''  it  cannot  exact  a  license  for  the  use 
of  navigable  waters,  w^hich  is  not  a  charge  for  any  specific  im- 
provement." 

§  26  (24).  The  state  pow^er  as  to  interstate  telegraph  com- 
panies.— A  telegi'aph  company  doing  an  interstate  business  is 
engaged  in  interstate  commerce,  and  is  so  recognized  by  act  of 
congress.^  It  cannot  therefore  be  excluded  by  a  state,  nor 
can  its  intei-state  messages  be  taxed  by  the  state. ^ 

A  state  cannot,  as  a  condition  of  authorizing  a  foreign  tele- 
graph company  to  do  local  business  in  the  state,  exact  a  char- 
ana,  118  U.  S.  455  (1886),  30  L.  County  v.  Interstate  Sand  &  Car 
Ed.  237.    Infra,  §  36.  Transfer  Co.,  192  U.  S.  454  (1904), 

1  County  of  Mobile   v.   Kimball,       48  L.  Ed.  518. 
102  U.  S.  691  (1880),  26  L.  Ed.  238.  c  Huse  v.  Glover,  119  U.  S.  543 

zEscanaba  Co.  v.  Chicago,  107  (1886),  30  L.  Ed.  487;  Sands  v. 
U.  S.  678  (1882),  27  L.  Ed.  442.  Manistee  River  Imp.  Co.,  123  U.  S. 

3  Packet  Co.  v.  Aiken,  121  U.  S.       288  (1887),  31  L.  Ed.  149. 
444  (1887).  30  L.  Ed.  976.  e  Harman  v.  Chicago,  147  U.  S. 

*Cardwell    v.    Am.    Bridge    Co.,       396  (1S93),  37  L.  Ed.  216. 
113  U.  S.  205  (1885),  28  L.  Ed.  959.  7  Act    of    July    24,    1866,    Comp. 

As  to   interstate  bridges  and   fer-       Stats.  5263;    Pensacola  Tel.  Co.  v. 
ries  and  cases  cited,  see  Gloucester      W.  U.  Tel.  Co.,  supra. 
Ferry    Co.    Case,    114    U.    S.    196  s  Telegraph  Co.  v.  Texas,  105  U. 

(1885),   29    L.   Ed.   158;    St.   Clair       S.  460  (1881),  26  L.  Ed.  1067. 


42  THE   CONCURRENT  AND  EXCLUSIVE  POWERS.  [§    27 

ter  fee  of  a  given  percent  of  the  entire  authorized  capital 
stock  of  the  company,  as  that  would  be  in  effect  a  burden  and 
tax  upon  the  company's  interstate  business  and  on  its  prop- 
erty located  or  used  outside  of  the  state  and  in  such  a  case,  it 
is  immaterial  that  the  state  disclaims  the  purpose  of  obstruct- 
ing or  embarrassing  interstate  commerce.^  The  state  may, 
however,  make  regulations  with  respect  to  building  poles,  lo- 
cation of  wires,  and  all  necessary  appliances,  which  the  con- 
venience of  the  community  may  require.  It  can  tax  intra 
state  messages,  and  municipalities  may  charge  a  reasonable 
rental  for  occupation  of  streets  with  poles.-  The  state  can 
prescribe  how  messages  shall  be  delivered  within  the  state, 
whether  received  from  within  or  without  the  state,^  as  this  is 
the  exercise  of  the  police  authority  of  the  state  in  its  jurisdic- 
tion ;  but  on  the  contrary,  the  state  cannot  prescribe  how  mes- 
sages received  within,  but  delivered  without  the  state,  shall  be 
delivered/ 

Interstate  commerce  is  not  unconstitutionally  regulated  by  a 
state  statute  of  Michigan  under  which,  as  construed  by  the 
state  courts,  a  telegraph  company  cannot  limit  its  liability  for 
its  negligent  failure  to  deliver  a  telegram  addressed  to  a  per- 
son in  another  state.  Such  a  regulation  would  be  valid  if 
rested  upon  the  common  law  of  the  state  and  is  no  less  valid 
because  made  bj'  a  state  statute.^ 

§  27  (25).  Concurrent  powers  in  interstate  railroad  trans- 
portation.— Not  only  is  the  rule  established  that  the  state,  in 

1  Western  U.  Tel.  Co.  v.  Cole-  v.  Childs,  214  U.  S.  274,  53  L.  Ed. 
man,  216  U.  S.  1,  54  L.  Ed.  355  994,  citing  and  following  Fort 
(1910).  Leavenworth  R.  R.  Co.  v.  Love,  114 

2  Telegraph  Co.  v.  Philadelphia,  U.  S.  525,  29  L.  Ed.  264  (1885). 
190  U.  S.  ICO  (1903),  47  L.  Ed.  995.  In    Ivy    v.    Western    U.    Tel.    Co., 

3  Western  U.  Tel.  Co.  v.  James,  165  Fed.  371,  E.  D.  of  Ark. 
162  U.  S.  650  (1896),  40  L.  (1908),  the  Arkansas  statute  al- 
Ed.  1105.  lowing    damages    for    mental    an- 

i  Western  U.  Tel.  Co.  v.  Pen-  guish,  etc.,  in  actions  against  tele- 
dleton,  122  U.  S.  347  (1887),  30  graph  companies,  was  held  valid, 
L.  Ed.  1187.  The  Virginia  statute  though  incidentally  affecting  inter- 
imposing  i)enalty  for  failure  to  de-  state  transactions. 
liver  telegraph  messages  has  no  b  Western  U.  Tel.  Co.  v.  Com- 
operation  in  limits  of  Norfolk  mercial  Union  Co.,  218  U.  S.  408, 
Navy  Yards.     Western  U.  Tel.  Co.  54  L.  Ed.  1088  (1910). 


§    27]  THE    COXCURKENT    AXD    EXCLUSIVE   POWERS.  43 

the  absence  of  congressional  action,  may  regulate  local  mat- 
ters which  relate  to  interstate  or  foreign  commerce,  but  the 
state  power  of  regulation  has  been  further  extended  and  held 
to  include  a  wide  field  in  the  exercise  of  its  lawful  power  over 
tne  relations  of  persons  and  property  in  its  jurisdiction.  The 
federal  power  of  reguhition  may  be  exercised  without  legisla- 
tion, as  well  as  with  it,  and  by  inaction,  congress  in  effect 
adopts  the  local  law.  State  la-ws  regulating  the  relative  rights 
and  duties  of  persons  within  the  jurisdiction  of  the  state  are 
therefore  effective  upon  interstate  carriers.^  The  court  said 
in  the  case  cited  that  it  is  to  this  law  that  persons  within  the 
scope  of  its  operation  look  for  the  definition  of  their  rights 
and  for  the  redress  of  wrongs.  "The  failure  of  congress  can 
be  construed  only  as  an  intention  not  to  disturb  what  exists, 
and  is  the  mode  by  which  it  adopts,  for  cases  within  its  power, 
the  rule  of  the  state  law,  which,  until  displaced,  covers  the 
subject." " 

Upon  this  principle  the  state  regulation,  in  the  absence  of 
congressional  action,  of  the  manner  in  which  interstate  trains 
shall  approach  dangerous  crossings  and  the  giving  of  signals 
and  control  of  trains  under  such  circumstances,  has  been  sus- 
tained,'' yet,  it  was  said  in  the  same  opinion  that  statutes 
requiring  the  speed  of  such  trains  to  be  checked  at  all  cross- 
ings, where  numerous  and  near  together,  might  be  practically 
destructive  to  the  successful  operation  of  passenger  trains 
and  a  direct  burden  upon  interstate  commerce. 

The  effect  of  the  enactment  of  congress  upon  the  police  power 
of  the  state  is  illustrated  by  the  ruling  of  the  supreme  court 
prior  to  the  enactment  of  the  interstate  commerce  act  *  holding 
valid  a  statute  of  Iowa  requiring  each  railroad  company  an- 
nually, in  the  month  of  September,  to  establish  passenger  and 
freight  rates,  and  on  the  first  day  of  October  following  to  put 
up  at  all  the  stations  on  its  road  a  printed  copy  of  such  rates 
and  cause  it  to  remain  posted  during  the  year,  notwithstand- 

1  Smith   V.    Alabama,   124   U.   S.  "  Southern    R.    R.    Co.    v.    King, 
465,  31  L.  Ed.  508.  217  U.  S.  324,  54  L.  Ed.  868  (1910), 

2  Sherlock  et  al.  v.  Ailing,  93  U,  affirming  160  Fed.  332,  C.  C.  A.  5th 
S.  99    (1876),  23  L.  Ed.  819;   Chi-  Cir. 

cago,  etc..  R.  Co.  v.  Solan,  169  U.  S.  4  Railroad     Co.     v.     Fuller,     17 

133  (1898),  42  L.  Ed.  G88.  Wall.  560  (1873),  21  L.  Ed.  710. 


44  THE    CONCURRENT   AND   EXCLUSIVE   POWERS.  [§28 

ing  the  act  of  congress  of  18G6  ^  authorizing  the  interstate  car- 
riage of  freight.  The  state  statute  was  held  to  be  simply  a  po- 
lice regulation,  and  that  cven  though  it  did  effect  commerce, 
the  question  would  arise  whether  it  did  not  fall  within  that 
class  of  cases  where  state  legislation  was  sustained  in  the  ab- 
sence of  congressional  legislation.  A  similar  statute  came  be- 
fore the  court  from  Texas  after  the  passage  of  the  interstate 
commerce  act,  although  the  statute  had  been  enacted  before. - 
The  court  said  that  the  state  law  and  the  national  law  operated 
upon  the  same  subjectmatter  and  prescribed  different  rules, 
and  that  the  state  statute  must  therefore  give  way. 

§  28  (26).  State  Sunday  laws  and  interstate  transporta- 
tion.— Included  in  this  range  of  the  concurrent  state  power 
regulating  persons  within  the  jurisdiction  and  affecting  inter- 
state commerce  are  Sunday  laws,  prohibiting  the  running  of 
freight  trains  on  Sunday.^  The  court  said  such  a  law  merely 
established  a  rule  of  civil  conduct  applicable  to  all  freight 
trains,  domestic  as  well  as  interstate,  and  to  all  similar  traffic. 

The  court  in  this  case  sustained  a  Georgia  statute  and  quoted 
from  the  opinion  of  the  supreme  court  of  that  state  which  said 
that  the  legislature  had  the  right  to  enforce  a  day  of  rest  as  a 
civil  duty,  although  men  might  differ  as  to  the  religious  duty. 

§  29  (27).  State  laws  as  to  qualifications  of  employes 
and  safety  of  the  public. — The  principle  has  been  extended  to 
include  laws  which  establish  a  standard  of  qualifications  for 
railroad  employes  *  on  interstate  as  well  as  local  trains,  for 
example,  color  blindness  of  engineers.  The  court  said  in  the 
latter  case  that  it  was  a  principle  fully  recognized  that  where- 
ever  there  is  danger  to  the  public  in  the  conduct  of  a  business, 
it  was  not  only  within  the  power,  but  the  plain  duty  of  a  state 
to  make  provision  against  accidents  likely  to  follow.  State 
laws  requiring  the  heating  of  passenger  cars,  requiring  guard 

1  Infra,  §  42.  White,   J.,   dissenting),   41   L.   Ed. 

2  Gulf,  Colo.  etc.  R.  Co.  v.  Hel-      1G6. 

fley,  158  U.  S.  98  (1895),  39  L.  Ed.  4  Smith  v.   Alabama,   124  U.   S. 

910.  465    (1888),  31  L.  Ed.  508;    Nash- 

8  Hennington    v.     Georgia,     163  ville,  etc.  R.  Co.  v.  Alabama,  128 

U.  S.  299  (1896),  (Fuller,  C.  J.  and  U.  S.  96  (1888),  32  L.  Ed.  352. 


§    30]  THE    CONCUKRENT   AND   EXCLUSIVE   POWERS.  4.3 

posts  on  railroad  bridges  and  trestles,^  the  protection  of  surface 
crossings  in  cities,^  and  the  regulation  of  speed  in  municipal 
limits,''  are  sustained  upon  the  same  prineiple.  The  court  said 
that  travelers  on  interstate  trains  are  as  much  entitled,  while 
within  a  state,  to  the  protection  of  that  state  as  those  who  travel 
on  domestic  trains. 

Congress  has  also  enacted  legislation,  as  Avill  be  seen  here- 
after for  the  safety  of  employes  and  the  prevention  of  acci- 
dents in  interstate  commerce.  These  acts,  as  the  Accident  Act, 
infra,  and  the  Safety  Act,  infra,  are  by  tlicir  terms  applicable 
to  all  railroads  engaged  in  interstate  commerce.  From  the 
nature  of  the  subject  it  is  difficult  to  say  Avhen  the  enact- 
ment of  such  legislation  by  congress  so  covers  the  ground 
as  to  make  inoperative  state  legislation  bearing  upon  the  same 
subject.  Under  the  ruling  laid  down  by  the  supreme  court  in 
the  live  stock  cases  (see  infra.  §  35),  the  state  statute  enacted 
for  the  protection  of  employes  and  travelers  within  its  juris- 
diction must  be  taken  as  valid,  unless  the  same  subject  is  taken 
under  direct  national  supervision  in  the  exercise  of  the  lawful 
power  of  congress  over  interstate  commerce. 

Under  this  principle  it  was  held  that  a  state  could  lawfully 
prescribe  a  minimum  of  three  brakemen  for  freight  trains  of 
more  than  twenty-five  ears  operated  in  the  state,  and  that  such 
a  regulation  was  valid  when  applied  to  a  foreign  railway  Avhen 
engaged  in  interstate  commerce.  The  court  said  that  such  a 
statute,  enacted  for  the  safety  of  all  engaged  in  the  business, 
was  not  in  any  sense  a  regulation  of  interstate  commerce.* 

§  30  (28).  State  laws  concerning  separation  of  races  in  in- 
terstate traffic— A  state  can  regulate  the  separation  of  races 
in  railroad  transportation  on  trains  within  the  state.''  but  it 

IN.  y.,  N.  H.  &  H.  R.  Co.  V.  Ed.  —  (1011),  affirming  S6  Ark. 
New  York,  165  U.  S.  628  (1897),  41       412. 

L  Ed    853  ^  L-'  N-  ^-  ^  ^-  ^-  ^°-  "^-  ^^^^^^^" 

'2  Southern    R.    R.    Co.    v.    King,      sippi,  133  U.  S.  587   (1890),  33  L. 

Ed.  784,  distinguished  Hall  v.  De 


supra. 


s  Erb  V.  Morasch,  177  U.  S.  584  Cuir,  95  U.  S.  485,  24  L.  Ed.  547;  C. 

(1900)    44  L.  Ed.  S97.  &  O.  R.  Co.  v.  Kentucky,  179  U.  S. 

4  Chicago,  R.  I.  &  Pac.  R.  R.  Co.  388,  45  L.  Ed.  244:  Plessy  v.  Fer- 

V.  Arkansas,  219  U.  S.  453,  55  L.  guson,  163  U.  S.  537   (1896).  41  L. 


46  THE    CONCURRENT   AND   EXCLUSIVE   POWERS.  [§    31 

cannot  determine  wlietlier  white  and  colored  interstate  passen- 
gers shall  be  compelled  to  share  their  cabin  accommodations  on 
steamboats,  as  that  is  a  question  of  interstate  commerce  to  be 
determined  by  congress  alone.  A  statute  of  Louisiana  enacted 
in  1869,  prohibiting  discrimination  on  account  of  race,  was  held 
inapplicable  to  a  Mississippi  steamboat  engaged  in  commerce 
between  the  states;^  while  the  state  laws  providing  for  sepa- 
rate cars  within  the  state,  were  sustained. 

Congressional  inaction  is  equivalent  to  a  declaration  that  an 
interstate  carrier  may  by  its  own  regulations  separate  white 
and  colored  passengers.^ 

§  31  (29) .  Limitation  of  state  power  in  stoppage  of  through 
trains. — The  limitation  of  the  state's  power  of  regulation  in 
relation  to  interstate  commerce  is  illustrated  by  the  rulings 
of  the  supreme  court  upon  state  laws  requiring  the  stoppage  of 
trains  at  certain  stations. 

A  statute  of  Minnesota  requiring  every  railroad  company  to 
stop  all  regular  trains  at  county  seats,  but  providing  that  it 
should  not  apply  to  other  railroad  trains  entering  the  state 
from  another  state,  or  to  transcontinental  trains  from  another 
state,  was  sustained  as  to  a  train  connecting  with  an  interstate 
train  and  carrying  mails  and  some  interstate  passengers  for 
that  train.^     This  case,  however,  was  decided  upon  its  special 

Bd.  256.  In  McCabe  v.  A.  T.  S.  F.  so  construed  it  was  not  violative 

R.  Co.,  186  Fed.  966   (1911),  C.  C.  of    the    commerce    clause    of   the 

A.  8th  Circuit,  the  court  affirmed  federal    constitution.      There   was 

the   dismissal  of  the  bill   of  com-  no   obligation   on   the  railroad   to 

plaint   filed   by   negro   citizens   of  hold  the  sleeping  cars,  dining  or 

Oklahoma  in  seeking  to  enjoin  the  chair  cars  for  the  separate  use  of 

railway   companies   from   obeying  either  race,  and  the  equal  protec- 

the    Oklahoma   statute    (Laws    of  tion  of  the  laws  was  not  denied  by 

Okl'a.   p.    271),    requiring  railroad  their  failure  to  do  so.    Equality  of 

companies     to     provide     separate  service   did   not  mean   identity  of 

coaches  for  the  races  equal  in  all  service.     Sanborn  J.  dissenting, 
points  of  comfort  and  convenience  i  Hall  v.  DeCuir,  supra. 

alleging  that  the  defendants  were  2  Chiles  v.  C.  &  O.  R.  R.,  218  U. 

not    furnishing   cars   and   waiting  S.   71,    54   L.   Ed.   936    (1910),   af- 

rooms  for  the  negro  race  equal  to  firming  125  Ky.  299. 
those    furnished    for    white    race.  » Gladson  v.  Minnesota,   166   U. 

The    court   held   that   the   statute  S.  427  (1897),  41  L.  Ed.  1064;  L.  S. 

must  be  construed  to  apply  to  in-  &  M.  S.  R.  R.  v.  Ohio,  173  U.  S.  285, 

trastate  commerce  only,  and  when  43  L.  Ed.  702  (1899).  ♦ 


§  3i; 


THE   CONCURRENT   AND   EXCLUSIVE  POWERS. 


47 


facts,  as  the  tj-ain  was  run  -wholly  within  the  state.  A  statute 
of  Illinois  was  held  invalid  which  required  all  regular  passen- 
ger trains  to  stop  a  sufficient  length  of  time  at  county  seats  to 
receive  and  let  off  passengers  with  safety,  as  a  direct  inter- 
ference with  interstate  traffic.  This  statute  was  held  invalid 
both  as  to  a  county  seat  station  which  was  three  and  one-half 
miles  from  the  direct  road^  and  also  as  to  a  county  seat  sta- 
tion which  was  on  the  direct  line.-  In  the  case  last  cited  tin* 
court  reviewed  the  previous  decisions  and  said  that  none  of 
them  were  opposed  to  the  principle  that,  after  all  local  condi- 
tions had  been  adequately  made,  railways  had  the  legal  right 
to  adopt  special  provisions  for  through  traffic,  and  that  legis- 
lative interference  therewith  was  unreasonable  and  an  infringe- 
ment upon  the  constitutional  guaranty  of  the  freedom  of  in- 
terstate commerce. 

In  determining  the  validity  of  a  state  order,  requiring  the 
stoppage  of  interstate  railroad  trains,  the  supreme  court  will 
consider  the  adequacy  of  the  local  facilities  existing  at  such 
station,  as  their  existence  is  involved  in  the  determination  of 
the  federal  question  whether  the  order  does  or  does  not  di- 
rectly regulate  interstate  commerce.' 


1  Illinois  Central  R.  Co.  v.  Il- 
linois, 1G3  U.  S.  142  (1896),  41  L. 
Ed.  107. 

2  Cleveland,  etc.,  R.  Co.  v.  Illi- 
nois, 177  U.  S.  514  (1900),  44  L. 
Ed.  868. 

8  In  Atlantic  Coast  Line  R.  R. 
Co.  V.  Wharton,  207  U.  S.  328,  52  L. 
Ed.  230  (1907),  reversing  74  S.  C. 
80.  The  court  held  that  a 
state  order  requiring  a  railroad 
company  to  stop,  on  signal,  two  of 
Its  fast  mail  trains  running  be- 
tween Jersey  City  and  Tampa, 
Florida,  at  a  small  town  in  South 
Carolina,  which  was  also  the  junc- 
tion point  with  a  small  branch 
road  was  void,  where,  in  addition 
to  several  local  trains  daily,  the 
town  was  furnished  daily  one 
slower   through   train,    each    way. 


The  order  of  the  supreme  court  of 
the  state  granting  a  mandamus 
compelling  the  ailroads  to  stop  the 
trains  was  held  reviewable  on 
writ  of  error.  In  Herndon  v.  C,  R. 
I.  &  P.  R.  R.  Co.,  218  U.  S.  135,  54 
L.  Ed,  970  (1910),  a  statute  of 
Missouri  requiring  the  stoppage 
of  interstate  trains  at  junction 
points  was  held  an  unnecessary 
and  unlawful  burden  upon  inter- 
state commerce,  when  ample  facil- 
ities for  the  traveling  public  were 
already  provided.  In  this  case 
the  court  affirmed  a  decree  en- 
joining the  secretary  of  state 
from  revoking  the  company's  li- 
cense and  right  to  do  local  busi- 
ness because  of  bringing  suit  In 
the  federal  court. 


48 


THE    CONCURRENT   AND   EXCLUSIVE   POWERS. 


[§  32 


§  32  (30).  State  regulation  of  contractual  relations  of  inter- 
state railroad  and  shippers. — The  contract  relations  of  inter- 
state railroads  with  their  shippers  must  be  determined,  in  tlie 
absence  of  congressional  legislation,  by  the  local  law  of  the 
place  where  the  contract  is  made.  State  statutes  regulating 
the  contractual  relations  and  changing  the  common-law  rules 
controlling  such  relations  are  within  the  scope  of  the  state's 
regulating  power.  Thus  statutes  permitting  the  carrier  to 
limit  his  common-law  liability  to  a  stipulated  valuation,  regu- 
lating the  effect  of  an  agreement  limiting  liability  to  the  car- 
rier's own  line  in  a  shipment  to  be  made  over  other  lines,  and 
also  prohibiting  contractual  exemption  from  any  common-law 
liability  of  the  carrier,  have  been  sustained.  In  the  Hughes 
case  ^  it  was  said  by  the  supreme  court,  in  allowing  a  judg- 
ment against  an  interstate  carrier  in  excess  of  the  amount  lim- 
ited in  the  bill  of  lading  on  the  ground  that  no  federal  right 
was  denied,  that  although  congress  had  made  it  obligatory  to 
provide  proper  facilities  for  the  interstate  carriage  of  freight 
and  had  prevented  carriers  from  obstructing  continuous  ship- 
ments on  interstate  lines,  there  was  no  sanction  of  agreements 
limiting  liability  by  stipulation,  and  until  congress  had  legis- 
lated upon  it  there  was  no  valid  objection  to  the  states  enforc- 
ing their  own  regulations  upon  the  subject,  although  they  may 
to  that  extent  affect  interstate  contracts  of  carriage.^ 


1  Pennsylvania  R.  Co.  v. 
Hughes,  191  U.  S.  477  (1903),  48  L. 
Ed.  268. 

2  Richmond,  etc.,  R.  Co.  v.  To- 
bacco Co.,  169  U.  S.  311  (1898),  42 
L.  Ed.  759.  A  contract  for  through 
transportation  from  Oklahoma  to 
New  York  was  held  subject  to  the 
Oklahoma  law  to  the  extent  that 
such  law  was  not  an  invasion  of 
the  exclusive  rights  of  congress, 
and  under  this  law  the  exemption 
of  the  bill  of  lading  was  not  bind- 
ing upon  the  shipper  in  the 
absence  of  his  assent  in  writing. 
Erie  R.  Co.  v.  Pond  Creek  Mill  & 
Elevator  Co.,  C.  C.  A.  7th  Circuit, 


162  Fed.  878  (1908).  While  con^ 
gress  has  not  legislated  upon  the 
forms  of  bills  of  lading  in  inter- 
state commerce,  it  has,  by  the  en- 
actment of  the  Harter  Act,  U.  S. 
Compiled  Statutes,  1901,  p.  2946, 
legislated  concerning  the  forms  of 
maritime  bills  of  lading  and  con- 
trolling the  insertion  of  stipula- 
tions therein  limiting  the  responsi- 
bility of  carriers.  See  case  of  The 
Delaware,  161  U.  S.  459  (1896),  40 
L.  Ed.  771.  By  provision  of  the 
Act  of  1906,  known  as  the  Railroad 
Rate  Bill  of  that  year,  congress 
has  regulated  the  issue  of  bills  of 
lading,     fixing     the     responsibilty 


§    33]  THE   CONCURRENT   AND  EXCLUSIVE  P0V7EBS.  49 

§  33  (31).  State  regulation  under  rules  of  common  law  in 
state  courts. — It  is  immaterial,  in  this  exercise  of  the  state's 
lawful  power  over  persons  and  property  within  its  juri.sdic- 
tion,  whether  the  enforcement  by  the  state  of  its  power  in  the 
regulation  of  relative  rights  and  duties  of  persons  and  corpora- 
tions within  its  limits  is  enacted  into  a  statute  or  results  from 
the  rules  of  law  enforced  in  the  state  courts.  The  state,  said 
the  supreme  court,  has  a  right  to  promote  the  welfare  and 
safety  of  those  within  its  jurisdiction  by  requiring  carriers  to 
be  responsible  to  the  full  measure  of  the  loss  resulting  from 
their  negligence,  a  contract  to  the  contrary  notwithstanding. 

The  penalizing  of  the  failure  of  a  common  carrier  to  adjust 
and  pay  within  a  specified  time  claims  for  loss  or  damage  un- 
der state  law  does  not  unlawfully  interfere  with  interstate 
commerce,  even  as  applied  to  shipments  from  without  the  state, 
where  the  statute  is  construed  by  the  state  court  as  affecting 
only  the  liability  of  carriers  doing  business  in  the  state  for 
property  lost  or  dama;j;ed  while  in  tb'^ir  possession.^ 

In  the  absence  of  action  by  congress  or  the  Interstate  Com- 
merce Commission,  a  railway  company  may  be  compelled  by 
mandamus  to  resume  the  transfer  and  return  of  cars  loaded 
and  unloaded  from  the  line  of  a  connecting  carrier  to  a  flour 
mill  and  elevator  of  a  shipper,  upon  request  and  demand  of 
the  shipper  and  the  payment  of  customary  charges. - 

On  the  other  hand,  a  statute  which  is  calculated  to  impose 
heavy  penalties  for  trivial,  accidental  and  unintentional  viola- 
tions of  duty,  as  the  failure  of  a  railroad  company  to  furnish 
cars  to  a  shipper  within  a  certain  number  of  days  after  the 
latter 's  requisition  in  writing,  in  the  sum  of  $25  a  day  for  each 
car  not  furnished  and  admitting  of  no  excuse  except  as  arising 
from  wars  or  other  calamity,  is  an  unconstitutional  regulation 
of  interstate  commerce.^ 

upon     the     initial     carrier;     Held  Flour  Mill  Co.,  211  U.  S.  612,  53  L. 

valid      by     the      supreme     court  Ed.   352    (190S). 

See  i77fra,  §  407.  3  H.  &  T.  C.  R.  Co.  v.  Mayes,  201 

1  Atlantic  C.  &  L.  P.  Cp.  v.  U.  S.  321,  50  L.  Ed.  772  (1906),  re- 
Mazurski,  216  U.  S.  122,  54  L.  Ed.  versing  36  Tex.  Civ.  App.  606,  609. 
411   (1910).  Also   St.   Louis   S.   W.   Ry.   Co.  v. 

2  Mo,  Pac.  R.  R.  Co.  v.  Laraby  Arkansas,  217  U.  S.  136,  54  L.  Ed. 

4 


50  THE    CONCURRENT    xVND   EXCLUSIVE   P0\^^3RS.  [§    34 

The  state  regulations  in  these  eases  were  sustained  upon  the 
theory  that  they  are  not  in  themselves  regulations  of  inter- 
state commerce,  though  they  control  in  some  degree  the  con- 
duct and  liahility  of  those  engaged  in  the  commerce,  and  as 
long  as  congress  had  not  legislated  upon  the  particular  sub- 
ject, they  are  to  be  regarded  as  legislation  in  aid  of  such  com- 
merce, and  as  a  rightful  exercise  of  the  police  power  of  the 
state  to  regulate  the  relative  rights  and  duties  of  persons  and 
corporations  within  its  limits.^ 

This  lawful  exercise  of  the  police  power  of  the  state  over 
persons  and  things  within  its  jurisdiction  is  illustrated  by  the 
rulings  of  the  supreme  court  sustaining  the  power  of  the  state 
to  regulate  the  sale  of  patent  rights,  or  articles  covered  by 
letters-patent  of  the  United  States.  The  court  said  that  con- 
gress never  intended  that  the  patent  laws  should  displace  the 
police  powers  of  the  state,  that  is,  those  powers  by  which  the 
health,  good  order,  peace  and  general  welfare  of  the  commu- 
nity are  promoted,  provided  such  laws  do  not  discriminate 
against  non-residents>' 

§  34  (32).  The  concurrent  jurisdiction  in  live  stock  inspec- 
tion laws. — The  concurent  jurisdiction  of  the  state  and  federal 
governments  in  interstate  commerce  is  well  illustrated  in  the 
matter  of  state  laws  regulating  the  exclusion  of  diseased  cat- 
tle. The  danger  of  the  communication  of  disease  in  driving 
or  otherwise  transporting  cattle  from  state  to  state  has  been 
recognized  both  in  the  legislation  of  the  western  states  as  well 
as  in  that  of  the  federal  government.  The  right  of  the  state 
to  protect  its  people  and  property  against  such  dangers  by 
reasonable  enactments,  not  going  beyond  the  necessities  of  the 
case,  has  been  affirmed  in  several  cases,^  but  this  right  of  pro- 
tection against  diseased  cattle  did  not  justify  the  absolute  pro- 
hibition against  certain  cattle  within  certain  seasons.^^     The 

698  (1910),  reversing  85  Ark.  311..  Solan,  169  U.  S.  133  (1898),  42  L. 

See  also  McNeil  v.   Southern  Ry.  Ed.  688. 

Co.,  202  U.  S.  543,  50  L.  Ed.  1142  2  Webber  v.  Virginia,  103  U.  S. 

(1906);   Mississippi  R.  R.  Com.  v.  344  (1881),  26  L.  Ed.  565. 

111.   Central   R.   R.   Co.,   203   U.    S.'  3  Kimmish  v.  Ball,  129  U.  S.  217 

335,  51  L.  Ed.  209   (1906),  and  af-  (1889),  32  L.  Ed.  695. 

firming  128  Fed.  327.  4  Hannibal    &    St.    Joe    Railroad 

1  Chicago,  M.  &  St.  P.  R.  Co.  v.  Co.  v.  Husen,  95  U.  S.  465  (1879), 

24  L.  Ed.  527. 


§    35]  THE    CONCURRENT    AND    EXCLL'SIVE   POWTCRS.  51 

right  of  inspection  of  animals  or  of  anytliing  intended  for 
human  food  brought  into  the  state  from  anot^her  state  is  con- 
ceded, but  such  inspection  must  be  reasonable,  and  a  state  law 
is  invalid  whieli  is  burdened  with  such  conditions,  as  would 
prevent  the  introduction  into  the  state  of  sound  meats,  the 
product  of  animals  slaughtered  in  other  states.'  In  this  case 
the  act  required  inspection  twenty-four  hours  before  slaughter- 
ing, and  this  necessarily  included  all  meats  from  animals 
slaughtered  in  other  states. 

§  35  (33).  Effect  of  congressional  legislation  upon  concur- 
rent state  power. — In  the  second  class  of  cases,  supra,  section  24, 
where  it  is  not  the  existence,  but  the  exercise,  of  the  power  of 
congress  which  is  incompatible  with  the  exercise  of  the  same 
power  by  the  states,  and  wherein,  by  inaction,  congress  in  ef- 
fect adopts  the  local  law,  the  question  necessarily  arises 
whether  an  act  of  congress  in  this  field  of  concurrent  legisla- 
tion has  the  effect  of  nullifj'ing  the  state  statutes  on  the  same 
subject.  This  question  must  be  determined  by  the  scope  and 
terms  of  the  act  of  congress,  that  is,  whether  or  not  it  covers 
the  whole  subject,  thus  excluding  the  exercise  of  the  state 
power. 

Thus  congress  has  legislated  on  the  subject  of  the  transpor- 
tation of  live  stock.-  and  has  authorized  the  investigation  and 

1  Minnesota  v.  Barber,  136  U.  S.  sustained  as  consistent  with  the 
313,  34  L.  Ed.  455  (1890);  Brim-  federal  legislation  on  the  same 
mer  v.  Redman,  138  U.  S.  78  subject  and  with  the  powers  to 
(1S90>.  34  L.  Ed.  8fi2.  control  the  interstate  movement  of 

2  Act  of  May  29,  1884,  c.  60,  and  cattle  liable  to  be  afflicted  with  a 
Act  of  Aug.  30,  1890,  c.  839,  chap.  3  communicable  disease,  which  had 
Comp.  Stats,  pp.  3182  to  3193.  been    conferred    upon    the    secre- 

A  statute  of  Kansas,  making  it  a  taries  of  agriculture  by  the  Act  of 

misdemeanor  to  transport  into  the  February    2nd,    1903.      Asbell    v. 

state  cattle  from  any  point  south  Kansas,  209  U.  S.  251,  52  L.  Ed.  778 

of  the  south  line  of  the  state,  ex-  (1908). 

cept  for  immediate  slaughter.  This  Act  of  August  30,  1890,  in 
without  having  first  caused  them  so  far  as  it  provided  for  the  inspec- 
to  be  inspected  and  passed  as  tion  of  the  slaughtering  and  pack- 
healthy  by  the  proper  state  ofla-  ing  with  a  state  of  cattle  in- 
cials  or  by  the  bureau  of  animal  tended  for  exportation,  was  de- 
industry  of  the  interior  depart-  nied;  and  the  party  indicted  for 
ment   of   the   United    States,   was  bribing     an     inspector     was     dis- 


52  THE    CONCURRENT    AND   EXCLUSIVE   POWERS.  [§    35 

inspection  of  cattle  intended  for  interstate  commerce,  and  has 
made  unlawful  the  transportation  of  cattle  known  to  be  dis- 
eased. Though  it  was  argued  that  this  exercise  of  the  federal 
power  of  regulation  had  the  effect  of  nullifying  or  suspending 
the  state  statutes  on  the  subject,  the  supreme  court  held,^  that 
the  act  of  congress  did  not  cover  the  whole  subject  of  the  trans- 
portation of  live  stock  from  one  state  to  another,  and  that  the 
statutes  of  Kansas  and  Colorado  related  to  matters  not  cov- 
ered by  such  act. 

The  statute  of  Kansas  imposed  a  civil  liability  upon  the  rail- 
road company  bringing  diseased  cattle  into  the  state,  and  that 
of  Colorado  made  it  a  misdemeanor  to  bring  into  the  state  cat- 
tle which  had  been  herded  within  ninety  days  prior  to  their 
importation  with  cattle  having  a  contagious  disease.-  The 
court  said  that  the  state,  not  having  assumed  charge  of  the 
matter  as  involved  in  interstate  commerce,  could  protect  its 
people  and  their  property  against  such  dangers.  "When  the 
entire  subject  of  the  transportation  of  live  stock  from  one  state 
to  another  is  taken  under  direct  national  jurisdiction,  and  a 
system  devised  by  which  diseased  stock  may  be  excluded  from 
interstate  commerce,  all  local  or  state  regulations  in  respect 
of  such  matters  and  covering  the  same  ground  would  cease  to 
have  any  force,  whether  formally  abrogated  or  not,  and  such 
rules  and  regulations  as  congress  may  lawfully  prescribe  or 
authorize  would  alone  control.  The  power,  said  the  court,  may 
thus  be  suspended  until  national  control  is  abandoned  and  the 
subject  thereby  left  under  the  police  power  of  the  state. ^ 

This  class  of  cases,  where  the  exercise  of  the  power  of  con- 
gress nullifies  the  statutes  of  the  state  enacted  in  the  exercise 
of  this  concurrent  jurisdiction,  is  illustrated  in  the  effect  of 
the  enactments  of  congress  regulating  the  hours  of  labor 
and  other  conditions  of  employment  of  the  employes  of  rail- 
roads engaged  in  interstate  commerce.  Thus,  the  act  of  con- 
charged  on  the  ground  that  con-  Co.  v.  Haber,  169  U.  S.  613  (1898), 
gress  had  no  power  to  provide  for  42  L.  Ed.  878;  Reid  v.  Colorado, 
the  inspection  of  a  manufacturing  187  IT.  S.  137  (1902),  47  L.  Ed.  108. 
business  within  the  limits  of  the  2  Rasmussen  v.  Idaho,  181  U.  S^ 

state.     U.  S.  V.  Boyer,  85  Fed.  425       198  (1901),  45  L.  Ed.  820. 
(W.  Dist.  of  Mo.)   (1898).  s  R.  R.  Com.  of  Ohio  v.  Worth- 

X  Missouri,   Kansas   &   Texas  R.      ington,  187  Fed.  965   (1911). 


§    36]  THE    CONCURRENT    AND    EXCLUSIVE   POWERS.  53 

gress  of  1907,  known  as  the  Nino  Hour  Law,^  proliibitin;? 
the  employment  of  certain  employes  in  interstate  commerce 
for  a  longer  period  than  nine  hours,  was  adjudged  by  the  su- 
preme courts  of  both  Missouri  and  Wisconsin  to  make  inopera- 
tive the  laws  of  their  respective  states  fixing  a  maximum  of 
eight  hours.-  In  these  eases  it  is  held,  while  the  state  acts 
were  valid  in  the  absence  of  congressional  legislation  and  ap- 
plied to  all  employes  whether  engaged  in  interstate  commerce 
or  not,  the  act  of  congress  was  a  clear  declaration  that  the  em- 
ployers engaged  in  interstate  commerce  should  be  under  fed- 
eral, and  not  state  regulation.  The  effect  of  the  enactment  was 
therefore  to  make  inoperative  the  state  laws. 

It  was  said  by  the  supreme  court,  in  sustaining  a  state  stat- 
ute as  to  the  qualifications  of  certain  railway  employes  in  the 
absence  of  congressional  legislation,^  that  it  was  conceded  that 
the  power  of  congress  to  regulate  interstate  commerce  is  plen- 
ary; that,  as  incident  to  it  congress  may  legislate  as  to  the  qual- 
ifications, duties,  and  liabilities  of  employes  and  others  on  rail- 
way trains  engaged  in  that  commerce ;  and  that  such  legislation 
will  supersede  any  state  action  on  the  subject. 

§  36(34).  State  quarantine  laws. — The  quarantine  law  estab- 
lished by  the  state  of  Louisiana  ^  was  also  sustained,  the  court 
saying  that  those  state  quarantine  laws  were  a  rightful  exer- 
cise of  the  police  power  of  the  state  for  the  protection  of  health, 
and  altliough  some  of  the  rules  of  this  system  amounted  to 
regulation  of  commerce  with  foreign  nations,  they  belonged  to 
the  class  which  the  state  could  establish,  until  congress  acted 
in  the  matter  by  covering  the  same  ground  or  by  forbidding 
state  laws,  and  coiigress  had  in  effect  adopted  the  laws  of  the 
state  and  forbidden  interference  with  their  enforcement.' 

1  See  infra,  §  540.  superseding  the  Georgia  statute  in 

2  State  V.  Missouri  Pacific  R.  R.  Dewberry  v.  Southern  Railway 
Co.,  212  Mo.  658  (1908),  and  State  Co.,  175  Fed.  307,  N.  D.  of  Ga. 
of  Wisconsin  v.  C,  M.  &  St.  P.  Ry.  (1910). 

Co.,  136  Wis.  407.      The  same  rul-  s  Nashville,    etc.,    R.    R.    Co.    v. 

ing  was  made  as  to  the  Employer's  Alabama,  supra. 

Liability  Act  of  1908  as  supersed-  *  Morgan's,  etc.,  Co.  v.  Louisiana, 

ing  the  Arkansas  statute  in  Fulg-  118   U.   S.   455    (1886),  30  L.   Ed. 

ham  V.  Railway  Co.,  167  Fed.  660,  237. 

W.    D.    of    Ark.    (1909),    and    as  e  in   L   C.   R.   R.  v.  McKendree, 


54  THE    CONCURRENT    AND   EXCLUSIVE   POWERS.  [§    37 

§  37  (35).  Freedom  of  interstate  commerce. — The  right  of  in- 
terstate commerce,  that  is,  the  right  of  couducting  traffic  and 
commercial  intercourse  between  the  states,  is  independent  of 
state  control,  and  where  freedom  of  commerce  between  the 
states  is  directly  involved,  the  non-action  of  congress  indicates 
its  will  that  the  commerce  should  be  free  and  untrammeled,  and 
the  states  cannot  interfere  therewith  either  through  their  police 
power  or  their  taxing  power. 

This  freedom  of  interstate  commerce  from  state  control  was 
definitely  established  as  to  the  taxing  power  of  the  state  in  the 
case  of  the  State  Freight  Tax,^  in  1873,  and  later,  in  1887,  in 
the  case  of  Robbins  v.  Shelby  County  Taxing  District.-  The 
freedom  of  interstate  commerce  with  respect  to  the  police 
power  of  the  state  was  also  declared  in  the  cases  relating  to 
the  liquor  traffic.^  Finally,  in  1886,  in  the  Wabash  Railway 
case,*  the  supreme  court  held  that  a  statute  of  a  state,  intended 
to  regulate  or  to  tax  or  to  impose  any  other  restrictions  upon 
the  transmission  of  persons  and  property  or  telegraph  mes- 
sages from  one  state  to  another,  was  not  within  that  class  of 
legislation  which  the  states  could  enact  in  the  absence  of  legis- 
lation by  congress,  and  that  such  statutes  are  void  even  as  to 
that  part  of  such  transmission  which  may  be  within  the  state. 
The  statute  of  Illinois  therefore  regulating  railroad  charges 
was  held  to  have  no  application  to  an  interstate  shipment 
even  as  to  that  part  of  the  distance  which  lay  within  the  state 
of  Illinois,  and  the  regulation  of  interstate  commerce  from  the 
beginning  to  the  end  of  the  shipment  was  confided  to  congress 
exclusively  under  the  power  to  regulate  commerce  among  the 
states. 

In  1894  this  principle  was  extended  to  an  interstate  bridge, 
and  it  was  held  that  the  bridge  was  an  instrument  of  inter- 
state commerce  whereon  congress  alone  possessed  the  power 

203  U.  a  514,  51  L.  Ed.  298  (1906),  apply  as  well  to  intrastate  as  to 

the  court  held  that  the  quarantine  interstate  commerce, 

regulations    promulgated    by    the  i  See   15   Wall.    232,    21    L.   Ed. 

secretary  of  agriculture,  under  Act  146. 

of  Feb.  2,  1903,  were  void  as  in  2  See  supra,  §  20. 

excess  of  the  powers  conferred  by  s  See  supra,  §  10. 

that  act  where  on  their  face  they  *  Wabash  R.  Co.  v.  Illinois,  118 

U.  S.  557  (1886),  30  L.  Ed.  244. 


§  37 j     .  'i'llE  CUNCLKUENT  AND  EXCLLSUE  i'OWEKS.  55 

to  enact  a  uniform  schedule  of  charges,  and  that  the  authority 
of  the  state  was  limited  to  fixing  tolls  of  such  channels  of  com- 
merce as  were  exclusively  witl)in  its  territory. '  The  court  in 
reviewing  the  cases  said,  that  in  none  of  the  subsequent  cases 
had  any  disposition  been  shown  to  limit  or  qualify  the  doctrine 
laid  down  in  the  Wabash  case. 

The  freedom  of  interstate  commerce  from  state  control  for- 
bids any  legislation  discriminating  against  the  products  of  other 
states.     This  principle  has  been  applied  to  statutes  imposing  dis- 
criminating taxes  or  other  discriminations  against  importations 
from  other  states  in  case  of  the  liquor  traffic.     Thus,  a  Michigan 
statute  imposing  a  specific  tax  on  persons  engaged  in  the  busi- 
ness of  selling  liquors  at  wholesale  or  soliciting  or  taking  orders 
for  liquors  to  be  shipped  into  the  state,  not  having  their  usual 
place  of  business  in  the  state,  without  imposing  the  same  tax 
upon  persons  engaged  in  the  liquor  business  in  reference  to 
liquors  manufactured   in   the   state.   Avas   held   void.-     It   was 
claimed  that  this  could  be  sustained  as  a  tax  on  occupations,  but 
the  court  said  that  an  occupation  could  not  be  taxed  if  the  tax 
is  so  specialized  as  to  operate  a  discriminating  burden  against 
the  introduction  and  selling  of  the  products  of  another  state 
or  against  the  citizens  of  another  state.     Upon  the  same  prin- 
ciple the  dispensary  laws  of  South  Carolina,  regulating  the 
sale  of  intoxicating  liquors  and  prohibiting  their  importation.^ 
Avere  held  void,  the  court  holding  that  as  the  state  recognized 
the  sale,  manufacture,  and  use  of  intoxicating  liquors  as  valid, 
it  could  not  discriminate  against  their  being  imported  from 
other  states. 

The  right  to  carry  on  commerce  among  the  states  is  subject 
only  to  the  regulation  of  congress,  and  as  to  this  fundamental 
right  to  conduct  such  commerce,  it  is  not  the  exercise  but  the 
existence  of  the  power  in  congress  which  excludes  all  state 
control  and  interference  whether  under  the  taxing  or  the 
police  power.* 

1  Covington,  etc.,  Bridge  Co.  v.  Vandercook,  170  U.  S.  46S  (1S98), 
Kentucky,  154  tJ.  S.  204  (1894),  38      42  L.  Ed.  1111. 

L.  Ed.  9G2.  4  Chicago,  etc.,  R.  Co.  v.  Solan, 

2  Walling  V.  Michigan,  116  U.  S.  1C9  U.  S.  133  (1S98),  42  L.  Ed.  688; 
446,  29  L.  Ed.  691  (1886).  Pennsylvania   R.    Co.    v.    Hughes, 

3  Scott  V.  Donald,  165  U.  S.  58,  191  U.  S.  477  (1903),  48  L.  Ed.  268. 
41   L.   Ed.    632    (1897);    Vance  v.  In  Missouri  Pacific  R.  R.  Co.  v. 


56  THE    CONCURRENT    AND   EXCLUSIVE   POWERS.  [§    37 

This  freedom  from  state  control  iu  the  carrying  on  of  inter- 
state commerce  must  however  be  reconciled  with  the  general 
police  power  of  the  state  in  regulating  persons,  corporations 
and  property  within  its  jurisdiction,  and  in  determining  their 
relative  rights  and  obligations.  Thus  while  a  state  cannot 
impose  any  tax  upon  interstate  commerce  as  such,  nor  restrict 
the  persons  or  things  to  be  carried  therein,  nor  regulate  the 
rate  of  tolls,  fares  or  freight,  or  interfere  with  through  trains, 
or  exclude  any  lawful  subjects  of  commerce,  it  can  prescribe 
rules  for  the  construction  of  railroads  and  their  management 
and  operation  for  the  protection  of  persons  and  property. 
Such  rules  are  not  in  themselves  regulations  of  interstate  com- 
merce, although  they  may  control  in  some  degree  the  conduct 
and  liability  of  those  engaged  in  such  commerce.  "While  the 
line  of  distinction  is  not  always  clear  between  what  is  a  law- 
ful regulation  of  persons  and  property  within  the  jurisdiction 
and  what  is  a  regulation  of  interstate  commerce  conducted  by 
such  persons  or  with  such  property,  the  rule  remains  as  de- 
clared in  the  "Wabash  case,  that  it  is  not  the  exercise  but  the 
existence  of  the  power  in  congress  which  makes  void  any 
action  by  the  states  regulating  such  commerce. 

The  distinction  between  the  lawful  exercise  of  the  poAver  of 
the  state  in  regulating  the  relative  rights  and  duties  of  those 
subject  to  its  jurisdiction  and  the  unlawful  regulation  of  inter- 
state commerce  was  illustrated  in  two  cases  where  state  leg- 
islation undertook  to  deal  with  the  liability  of  carriers  in 
interstate  shipments  of  goods  damaged  on  connecting  lines.  A 
Virginia  statute,  providing  that  a  carrier  might  make  any  lim- 
itation as  to  its  liability  on  an. interstate  shipment  beyond  its 
own  line  which  it  deemed  proper,  providing  only  the  evidence 
was  a  contract  in  writing  and  signed  by  the  shipper.^  and  that 
the  carrier  should  be  liable  unless  within  a  reasonable  time  he 
gave  satisfactory  proof  to  the  consignor  that  the  loss  or  injury 
did  not  occur  while  the  thing  was  in  his  charge,  was  sustained 

Castle,  C.   C.   A.    8th   Circuit,   172  tained     and     held     applicable     to 

Fed.     841      (1909),     the     Act     of  interstate  railroads  in  the  absence 

Nebraska,    abolishing    the    fellow-  of    valid    legislation    of    congress, 

servant  rule  and  adopting  the  rule  the    Employer's   Liability    Act   of 

of  comparative  negligence  and  re-  1906  having  been  held  invalid, 
quiring  all  questions  of  negligence  i  Richmond  &  A.  R.  Co.  v.  Pat- 

and  contributory  negligence  to  be  terson  Tobacco  Co.,  169  U.  S.  311, 

submitted    to    the   jury,    was    sus-  42  L.  Ed.  759  (1898). 


§  38] 


THE    CON'CUKRENT    AND   EXCLUSIVE   POWEllt;. 


57 


by  the  supreme  court.  Such  a  provision,  the  court  said,  was 
a  reasonable  one  and  not  a  regulation  of  interstate  commerce. 
On  the  other  hand,  a  Georgia  statute,  which,  as  construed  by 
the  supreme  court  of  that  state,  applied  to  interstate  ship- 
ments and  imposed  upon  the  carrier,  as  a  condition  of  availing 
itself  of  a  valid  contract  of  exemption  from  liability  beyond 
its  own  line,  the  duty  of  tracing  the  freight  and  informing  the 
shipper  when,  where,  and  how,  and  by  which  carrier,  the 
freight  was  lost,  damaged  or  destroyed,  and  of  giving  the  names 
of  the  parties  and  their  official  position,  if  any,  by  whom  the 
truth  of  the  fact  set  out  in  the  information  could  be  established, 
was,,  when  applied  to  an  interstate  shipment,  in  violation  of 
the  constitution.^  The  court  distinfjuished  this  case  from  the 
Virginia  case  in  that  the  carrier  was  made  liable  for  the  negli- 
gence of  another  carrier  over  whose  track  it  had  no  control, 
unless  it  obtained  information  which  it  had  no  means  of  com- 
pelling another  carrier  to  give.  The  court  said  this  was  not  a 
reasonable  regulation  in  aid  of  interstate  commerce  but  a  di- 
rect and  immediate  burden  upon  it.- 

§  38  (36).  Congressional  inaction  in  foreign  and  interstate 
commerce  distinguished. — In  one  of  the  "original  package" 
cases,   Bowman  v.   Railroad   Company,"   where   the   supreme 


1  Central  of  Georgia  R.  Co.  v. 
Murphey,  196  U.  S.  194,  49  L.  Ed. 
444. 

2  In  St.  Louis,  I.  M.  &  S.  Ry.  Co. 
V.  Hampton,  U.  S.  Circuit  Court  E. 
D.  of  Ark.,  162  Fed.  693  (1908), 
the  act  of  Arkansas  regulating 
freight  transportation  and  making 
an  absolute  requirement  for  fur- 
nishing cars  therein,  was  held  an 
unlawful  interference  with  inter- 
state commerce. 

In  St.  Louis  &  S.  F.  R.  Co.  v. 
Allen,  181  Fed.  710  (1910),  a  rule 
of  the  Railroad  Commission  of  Ar- 
kansas providing  that  in  case 
of  failure  on  the  part  of  the  ship- 
per to  give  routing  instructions 
it  should  be  the  duty  of  the  rail- 
road receiving  the  shipment  to 
■forward  it  via  such  route  as  would 


make  the  lowest  rate,  was,  as  ap- 
plied to  interstate  shipments,  an 
unlawful  interference  with  inter- 
state commerce. 

In  Globe  Elevator  Co.  v. 
Andrew,  C.  C,  W.  D.  of  Wis.,  144 
Fed.  871  (190G),  on  a  motion  for 
preliminary  injunction,  an  act  of 
Wisconsin  providing  for  the  in- 
spection and  grading  of  grain  of 
Superior  City,  and  requiring  all 
grain  to  be  sold  and  delivered  un- 
der certain  grades  established,  and 
prohibiting  any  sales  or  deliveries 
under  ^Minnesota  grades  (the  city 
being  on  the  state  line),  was  an 
attempted  regulation  of  interstate 
commerce  and  therefore  void. 

3  Bowman  v.  Chi.  &  N.  W.  R. 
Co.,  125  U.  S.  465  (1888),  31  L.  Ed. 
700. 


58  THE    COXCURREXT    AND   EXCLUSIVE   PO\MERS.  [§    30 

court  first  laid  down  the  rule  that  in  interstate  commerce  the 
inaction  of  congress  meant  freedom  of  commercial  intercourse 
as  to  any  lawful  subject  of  commerce  in  the  "original  pack- 
age,"^ it  was  suggested  that  while  the  two  powers  over  inter- 
state and  foreign  commerce  are  contained  in  the  same  clause 
and  in  the  same  term,  the  same  inference  was  not  always  to  be 
drawn  from  the  absence  of  legislation  by  congress.  Laws 
which  concern  the  exterior  relations  of  the  United  States  with 
other  nations  and  governments  are  general  in  their  nature,  and 
the  people  of  the  several  states  can  have  no  relation  with  for- 
eign powers  in  respect  to  commerce  or  any  other  subject  ex- 
cept through  the  government  of  the  United  States,  its  laws  and 
treaties.  The  question  was  therefore  to  be  considered  in  each 
case,  as  it  arises,  whether  the  fact  that  congress  has  failed  in 
the  particular  instance  to  provide  by  law  a  regulation  of  com- 
merce among  the  states  is  conclusive  of  the  intention  that  the 
subject  shall  be  free  from  all  positive  regulation,  or  that  until 
it  positively  interferes  such  commerce  may  be  left  free  to  be 
dealt  with  by  the  respective  states. 

§  39  (37).  Attachment  of  foreign  railroad  cars. — An  in- 
teresting question,  which  has  been  differently  ruled  upon  in 
the  state  courts,-  as  to  the  liability  of  cars  of  a  foreign  rail 
road  company,  while  in  a  state  in  the  custody  of  another  com- 
pany, to  attachment  under  legal  process  in  such  state,  has 
been  definitely  decided  by  the  supreme  court,  and  it  is  held 
that  such  cars  are  subject  to  attachment  under  state  laws  not- 
withstanding the  provisions  of  the  interstate  commerce  act  and 
of  the  act  of  congress,  securing  continuity  of  transportation.^ 

The  court  said  in  this  opinion  *  that  the  interstate  commeree 
act  was  directed  against  the  acts  of  railroad  companies  whicli 
prevent  continuity  of  transportation,  and  section  5258,  R.  S., 
was  directed  against  the  trammels  of  state  enactments  then  ex- 
isting or  which  might  be  attempted;  and  that  neither  statute 
had  the  purpose  to  relieve  the  railroads  of  any  obligations  to 
their  creditors  or  to  take  from  their  creditors  any  remedial 

1  Supra,   §   17.  3  U.  S.  R.  S.  5258,  infra,  §  42. 

2  Wall  V.  Norfolk  &  Western  R.  4  Davis  v.  C.  C.  &  St.  L.  R.  R. 
R.  Co.,  52  W.  Va.  485,  64  L.  R.  A.  Co.,  217  U.  S.  157,  54  L.  Ed.  708 
(annot.)  501.  (1910). 


§    40]  THE    CONCUKKEXT   AND   EXCLUSIVE   POWERS.  50 

process  provided  by  the  state.  Sums  due  to  a  foreign  railroad 
carrier  from  other  carriers  as  the  former's  share  of  freiglit  on 
interstate  shipments  were  held  garnishable  under  state  laws. 

§  40.  Rulings  of  the  state  courts  on  the  commerce  clause. — 

While  the  supreme  court  of  the  United  States  is  the  final  ar- 
biter of  all  questions  in  the  construction  and  application  of 
the  federal  constitution  and  the  validity  of  state  legislation 
in  the  exercise  of  the  police  or  taxing  power  of  the  state  with 
reference  to  the  same,  it  is  also  true  that  under  our  dual  form 
of  government  the  state  courts  may,  in  the  exercise  of  their 
jurisdiction,  be  called  upon  to  determine  such  questions,  and 
their  judgment  may  be  final  as  to  the  parties  to  the  cause  when 
their  decision  is  in  favor  of  the  federal  right  set  up  in  the 
ease.  Thus,  if  a  federal  right  or  immunity  is  claimed  in  a 
case  in  a  state  court,  and  the  judgment  of  the  highest  court 
having  jurisdiction  in  the  state  is  in  favor  of  the  party  mak- 
ing such  claim  of  federal  right,  the  decision  of  the  state  court 
thereon  is  final  in  that  cause,  and  cannot  be  reviewed  on  Avrit 
of  error  by  the  supreme  court.  This  is  because  the  judiciary 
act  of  1789  limits  the  appellate  jurisdiction  of  the  supreme 
court  in  reviewing  decisions  of  the  highest  courts  of  the  state 
to  cases  where  the  decision  is  against  the  federal  right,  priv- 
ilege or  exemption  claimed.  In  a  number  of  cases  decisions 
of  state  courts  have  been  rendered  sustaining  the  claim  of 
federal  right  of  exemption  and  adjudging  such  statutes  to  be 
invalid,  and  such  judgments  for  the  reason  stated,  are  final  as 
to  the  parties  to  the  cause.^ 

lA  number  of  decisions  have  men's  Compensation  Act  of  New- 
been  rendered  in  state  courts,  ad-  York  was  held  to  violate  the  due 
judging  state  statutes  to  be  viola-  process  of  law  guaranteed  by  the 
live  of  the  fourteenth  amend-  federal  as  well  as  state  constitu- 
ment.  In  two  notable  cases  In  tions.  In  view^  of  the  anomaly  of 
Missouri,  Russell  v.  Croy,  164  Mo.  the  state  court  finally  determining 
69,  and  State  ex  rel.  Johnson  v.  the  application  of  the  constitution 
C.  B.  &  Q.  Ry.  Co.,  165  Mo.  228,  of  the  United  States,  the  Ameri- 
amendments  to  the  state  constitu-  can  Bar  Association,  at  its  meet- 
tion  were  adjudged  violative  of  ing  on  August  31,  1911,  recom- 
the  equal  protection  of  the  laws  mended  the  amendment  of  the 
guaranteed  by  the  federal  consti-  R.  S.  U.  S.,  §  709  (incorporated 
tution.  In  Ives  v.  Buffalo,  etc.,  as  Sec.  237  of  the  new  judicial 
R.  R.  Co.,  94  N.  E.  432,  the  Work-  code,    taking    effect     January     1. 


60 


THE  COXCURRENT  AND  EXCLUSIVE  POWERS. 


[§  40 


1912),  so  that  the  final  judgment 
of  the  state  court  where  federal 
claim  is  involved  may  be  reviewed 
on  writ  of  error  by  the  supreme 
court  where  the  claim  is  affiiTaed 
as  well  as  where  it  is  denied. 
The  following  are  some  of  the 
cases  wherein  state  statutes  have 
been  held  void  by  state  courts  as 
interfering  with  interstate  com- 
merce, these  judgments  being  final 
as  not  reviewable  by  the  supreme 
court  of  the  United  States. 

Arkansas:  (1908).  Railroad  v. 
State,  85  Ark.  284,  107  S.  W.  989, 
the  statute  of  the  state,  requiring 
the  stoppage  at  a  given  station  of 
a  train  engaged  in  Interstate  comr 
merce,  where  it  appears  that  there 
are  sufficient  trains  already  stop- 
ping to  accomodate  the  public. 

Colorado:  (1907).  Stubbs  v. 
People,  40  Colo.  414.  Act  of  Colo- 
rado prohibiting  the  docking  of 
horses  and  the  importation  and 
the  use  of  them  as  to  such  horses 
brought  into  the  state  and  used 
therein  by  the  owners. 

Act  requiring  inspection  before 
slaughtering  of  certain  animals 
in  so  far  as  it  provides  that  fresh 
meats  cannot  be  shipped  into  the 
state  except  that  the  animals  shall 
be  inspected  forty-eight  hours  be- 
fore being  slaughtered.  Schmidt 
v.  People,  18  Colo.  78     (1892). 

Goorgia:  (1909).  A  statute  mak- 
ing it  unlawful  if  a  person  shall 
solicit  a  sale  of  liquor  in  any 
county  where  the  sale  is  forbid- 
den, where  any  shipment  of  any 
part  of  the  sale  was  an  act  of 
interstate  commerce.  Rose  Co.  v. 
State,  133  Ga.  353  (1909).  An 
ordinance  creating  a  packing- 
house inspector  whose  duty  it  is 
to  inspect  all  meats  shipped  into 


the  city  or  brought  from  outside 
the  county,  and  requiring  him  to 
visit  all  packing-houses  daily  and 
imposing  upon  the  importers  an 
inspection  charge  while  it  im- 
poses no  charge  on  others  engaged 
in  like  business.  Armour  &  Co. 
v.  City  Council  of  Augusta,  134 
Ga.  178. 

Iowa:  (1900).  City  ordinance 
permitting  a  street  railroad,  en- 
gaged in  interstate  commerce,  to 
discriminate  in  rates  in  favor  of 
residents  of  city.  State  v.  Omaha 
R.  Co.,  113  Iowa,  30  (1901).  Re- 
quiring a  railway  company  to 
transfer  its  interstate  freights, 
passengers,  etc.,  at  a  given  point. 
Council  Bluffs  v.  Railway  Co.,  45 
Iowa,   338    (1876). 

Kansas:  (1909).  Where  freight 
is  received  in  Kansas  to  be  trans- 
ported over  its  own  and  connect- 
ing line  to  a  point  beyond  the 
state,  and  the  rate  charged  is  the 
aggregate  of  the  local  rates  of  the 
two  lines,  and  the  connecting  line 
had  previously  adopted  and  iiled 
with  the  Interstate  Commerce  Com- 
mission a  tariff  under  which  its 
proportion  of  the  charge  on  the 
through  shipment  was  collected 
and  there  is  a  claim  that  the 
charge  is  excessive,  the  shippers 
redress  must  be  through  the  Inter- 
state Commerce  Commission  and 
not  in  a  state  court.  M.,  K.  &  T. 
Ry.  Co.  V.  New  Era  Milling  Co.,  80 
Kan.  141. 

Kentucky:  (1907).  Common- 
wealth V.  Hay  Company,  104  S.  W. 
224,  31  Ky.  Law  Rep.  824.  The 
laws  of  Kentucky  requiring  that  a 
corporation  carrying  on  business 
in  that  state  shall  file  in  the  office 
of  the  secretary  of  state  statement 
of  the  location  of  its  office  and  the 


§  40j 


THE    CON'CL'KHEXT    AND   EXCLUSIVE   POWERS. 


61 


name  of  its  agont  on  whom  process 
can  be  served  as  to  corporations 
engaged  in  interstate  commerce. 
Ryan  Steam  Ship  Line  v.  Commonr 
wealth,  30  Ky.  Law  Rep.  1276,  10 
L.  R.  A.  N.  S.  1187,  held  that  the 
laws  of  Kentucky,  Sec.  571  (1903) 
providing  that  all  corporations 
carrying  on  business  in  the  state 
shall  have  an  office  and  agent 
where  services  can  be  had  making 
it  unlawful  for  such  corporation 
carrying  on  business  without  com- 
plying with  the  laws,  in  so  far  as 
it  affects  steamship  companies  en- 
gaged in  interstate  commerce. 

Maine:  (1S92).  Making  a  rail- 
way ticket  binding  on  the  rail- 
way company  for  six  years.  La- 
Farier  v.  Railway  Co.,  84  Me.  286. 
Railroads  to  remove  free  of  charge 
paupers  brought  into  the  state  by 
it.  Bangor  v.  Smith,  83  Me.  422 
(1891). 

Maryland:  (1907).  State  v. 
Cumberland  R.  Co.,  105  Md. 
478,  Acts  of  Maryland,  p.  413, 
amending  the  charter  of  the  C.  & 
P.  R.  Co.,  so  as  to  prohibit  it  from 
allowing  its  tracks  to  be  connected 
with  the  tracks  of  the  B.  &  O. 
which  passes  through  other  states 
unless  the  latter  shall  arrange  its 
freight  charges  on  coal  delivered  to 
it  from  the  fonner,  so  that  the 
freight  charges  of  the  two  com- 
panies shall  not  exceed  a  certain 
rate. 

Massachusetts:  (1906).  Com- 
monwealth V.  Caldwell,  190  Mass. 
355,  act  permitting  the  sale  by 
peddlers  of  agricultural  products 
of  the  United  States  without  a 
license  and  forbidding  unlicensed 
sales  of  agricultural  products  of 
other  countries. 


(1881).  Providing  for  the  in- 
spection of  lime  imported  into  the 
state.  Higgins  v.  Casks  of  Lime, 
130  Mass.  1. 

Missouri:  (1907).  State  v.  Mo. 
Pac,  212  Mo.  218.  A  law  regulat- 
ing the  hours  of  service  of  tele- 
graph operators  and  train  dcr 
spatchers  in  so  far  as  it  applies  to 
interstate  traffic. 

(1909).  International  Text 
Book  Co.  v.  Gillespie,  229  Mo. 
397,  a  law  requiring  a  foreign 
corporation  carrying  on  solely 
interstate  commerce  in  Missouri  to 
make  out  and  deliver  to  the  secre- 
tary of  the  state  a  statement  as  to 
its  property  and  business  within 
the  state  and  to  pay  a  tax  thereon. 

New  York:  (1898).  Goods  made 
by  convict  labor  in  another  state 
to  be  labeled  as  such  when  exposed 
for  sale.  People  v.  Hawkens,  157 
N.  Y.  1. 

(1901).  Providing  that  no 
stone  shall  be  used  on  any  mu- 
nicipal work  except  the  stone 
was  dressed  or  cut  or  carved  with- 
in the  state.  People  v.  Coler,  166 
N.  Y.  144. 

Ohio:  (1897).  Act  regulating 
sale  of  convict-made  goods  from 
other  states.  Arnold  v.  Yanders, 
50  Ohio,  417,  47  N.  E.  50. 

Oklahoma:  (1893).  Inspecting 
cattle  driven  into  a  state  and  im- 
posing a  fee  therefor.  Faris  v. 
Henderson.  1  Okl.  384. 

South  Carolina:  (1907).  Wens- 
low  V.  Atlantic  Coast  Line,  79  S.  C. 
344,  GO  S.  E.  709,  act  making  the 
carrier  the  agent  of  its  connecting 
carrier  from  whom  it  receives 
freight,  liable  for  freight  lost  by 
such  connecting  carrier. 

(1901).     Imposing  a  penalty  of 


62 


TPIE   CONCURRENT   AND  EXCLUSIVE  POWERS. 


[§  40 


$500  for  shipping  freight  other 
than  as  designated  by  the  shipper. 
Lowe  V.  Railway  Co.,  63  S.  C.  248. 
Tennessee:  (1909).  Acklen  v. 
Thompson,  126  S.  W.  730,  122 
Tenn.  43,  act  prohibiting  the  sale 
of  plumage  of  birds  captured  or 
killed  without  the  state,  if  applied 
to  the  case  where  the  possessor 
had  in  the  course  of  his  trade  ac- 
quired title  in  a  foreign  state  and 
brought  the  game  into  the  state 
for  use  or  commercial  purposes. 

(1896).  Requiring  all  persona 
other  than  photographers  of  the 
state  who  shall  solicit  pictures  to 
be  enlarged  outside  of  the  state 
to  pay  tax.  State  v.  Scott,  98 
Tenn.  254. 

Texas:  (1906).  Ex  parte  Massy, 
49  Tex.  Crim.  App.  60.  A  stat- 
ute making  it  a  misdemeanor 
to  solicit  orders  for  the  sale  of  in- 
toxicating liquors  in  local  option 
districts. 

(1906).  Texas  &  Pacific  v.  Al- 
len, 42  Tex.  331,  98  S.  W.  450,  act 
imposing  a  penalty  on  carriers  for 
delay  in  furnishing  cars. 

(1909).  Contract  made  in 
Texas  for  the  sale  of  goods  to  a 
resident  corporation  by  a  foreign 
corporation  to  be  shipped  from  a 
sister  state  to  a  buyer  in  Texas 
affects  interstate  commerce  and  is 
not  subject  to  Texas  AntL-Trust 
laws.  Hardware  Co.  v.  Pottery  Co. 
120  S.  W.  1088. 

Utah:  (1908).  The  law  requir- 
ing a  license  to  canvass  or  sell  by 
sample  certain  goods  to  be  shipped 


into  the  state  and  permitting  with- 
out license,  canvassing  or  selling 
in  such  manner  goods  not  shipped 
into  the  state,  though  such  a  sale 
without  a  license  is  prohibited 
only  in  case  of  selling  to  users  and 
consumers.  The  mere  fact  that 
the  goods  had  been  shipped  into 
the  state  being  not  alone  con- 
clusive that  they  have  lost  that 
character  as  articles  of  interstate 
commerce.  State  v.  Bayer,  34 
Utah,   257. 

Vermont:  (1908).  In  State  v. 
Feet,  68  Atl.  661,  80  Vt.  449,  the 
law  of  Vermont  making  it  punish- 
able to  keep,  with  intent  to  ship 
out  of  the  state  for  food  purposes, 
the  flesh  of  a  calf  which  was  less 
than  four  weeks  old  or  weighed 
less  than  50  pounds. 

Washington:  (1908).  A  city  or- 
dinance designating  as  peddlers 
non-residents  of  state  taking  or- 
ders in  the  city  for  groceries  and 
imposing  a  penalty  for  doing 
business  without  a  license.  State 
V.  Glasby,  50  Wash.  704. 

West  Virginia:  (1900).  Jen- 
nings v.  Big  Sandy  R.  Co.,  61  W. 
Va.  664,  57  S.  E.  272,  act  imposing 
a  forfeiture  on  any  railroad  which 
shall  demand  or  receive  a  greater 
toll  for  compensation  than  is  pro- 
vided by  the  act  so  far  as  applica- 
ble to  interstate  commerce. 

Wisconsin:  (1908).  State  v.  C. 
M.  &  St.  P.  Ry.  Co.,  136  Wis.  407,  a 
statute  providing  hours  of  service 
for  telegraph  operators,  including 
train  despatchers. 


CHAPTER  III. 

THE  FEDERAL  REGULATION  OF  INTERSTATE  COMMERCE. 

§  41.  The  beginning  of  federal  regulation. 

42.  The  railroad  act  of  1866. 

43.  The  state  coutrpl  of  local  business  of  interstate  railroads. 

44.  State  regulation  of  railways  in  the  United  States. 

45.  Governmental  regulation  of  railways  in  England. 

46.  The  common  law  in  interstate  commerce. 

47.  Federal  and  state  courts  in  the  federal  regulation  of  interstate 

commerce. 

48.  Federal  cause  of  action  in  the  state  courts. 

49.  Genesis  of  the  Interstate  Commerce  Act. 

50.  Passage  of  the  Interstate  Commerce  Act. 

51.  Successive  amendments  of  the  Interstate  Commerce  Act. 

52.  Enlarged  powers  and  jurisdiction  of  the   Interstate  Commerce 

Commission. 

53.  The  commerce  court. 

54.  Regulation  of  bridges  and  ferries  over  navigable  rivers. 

55.  Regulation  of  telegraph  and  telephone  companies. 

56.  The  release  of  the  federal  regulating  power. 

57.  Regulation  by  the  delegation  of  power. 

58.  Additional  acts  of  congress  in  the  regulation  of  commerce. 

59.  The  Department  of  Labor  and  Commerce. 

§  41  (39).  The  beginning  of  federal  regulation.— Although 

the  recognized  necessity  for  the  national  control  of  interstate 
commerce  was  the  immediate  occasion  and  moving  purpose  in 
the  adoption  of  the  constitution  and  the  formation  of  the 
federal  union,  and  the  broad  and  comprehensive  construction 
of  the  commerce  clause  by  the  supreme  court  under  chief  jus- 
tice ]\Iarshall  has  laid  the  foundation  of  all  subsequent  deci- 
sions, the  direct  federal  regulation  of  such  commerce,  at  least 
as  to  land  transportation,  did  not  begin  until  the  close  of  the 
first  century  of  the  republic's  existence.  The  far-reaching 
importance  of  national  control  over  interstate  as  well  as  over 
foreign  commerce  was  not  and  could  not  be  foreseen  at  the 
time  of  the  adoption  of  the  constitution.  It  was  not  until 
twenty  years  after  the  close  of  the  civil  war  that  changed 
economic  conditions  of  the  country  made  intolerable  the  dis- 
criminating legislation  of  the  states  and  led  to  the  judicial 


64  FEDER-\L   REGXJI.ATION    OF   INTERSTATE    COMMERCE.        [§    42 

declaration  by  the  supreme  court  in  1886/  that  in  the  matter 
of  interstate  commerce  the  United  States  were  but  one  coun- 
try and  are  and  must  be  subject  to  but  one  system  of  regula- 
tions, and  not  to  a  multitude  of  systems.  Soon  after  this,  in 
1888  and  in  1890,-  the  court  extended  the  same  principle  of 
the  freedom  of  interstate  commerce  to  the  police  power  of  the 
states  in  the  liquor  traffic  decisions.  In  1886  it  was  also  defi- 
nitely decided,^  that  the  state  power  of  regulation  of  railway 
traffic  did  not  and  could  not  extend  to  interstate  traffic  in  any 
form,  and  that  such  shipments  were  national  in  their  charac- 
ter, and  their  regulation  confined  to  congress  exclusively. 
Thus  it  was  for  the  first  time  decided  that  this  right  of  inter- 
state commerce  was  so  essentially  national  in  its  character 
that  the  inaction  of  congress  was  equivalent  to  its  determina- 
tion that  the  commerce  must  be  free,  and  that  therefore  any 
state  regulation  of  the  right  to  carry  on  such  commerce  was 
inoperative  and  void.  The  principle  of  concurrent  state  pow- 
ers during  the  inaction  of  congress  and  the  invalidation  of 
state  action  by  reason,  not  of  the  existence,  but  of  the  exercise 
of  the  federal  power  had  no  application  to  the  regulation  of 
the  right  to  carry  on  commerce  between  the  states. 

Thus  the  close  of  the  first  one  hundred  years  of  the  govern- 
ment was  marked  by  the  distinct  judicial  declaration  of  the 
freedom  of  interstate  commerce  from  any  control  or  regulation 
by  the  states,  either  by  police  or  taxing  power,  and  the  way 
was  logically  opened  for  the  direct  exercise  by  congress  of  the 
power  of  regulation  conferred  by  the  constitution. 

§  42  (40).  The  railroad  act  of  1866. — Although  congress  had 
frequently  legislated  on  the  subject  of  water  transportation 
{supra,  §  13),  its  first  legislation  in  regard  to  railroad  trans- 
portation, other  than  the  incorporation  of  the  land  grant  and 
government  aided  Pacific  railroads  in  1862,  was  the  act  of  June 
15,  1866,  since  incorporated  in  the  revised  statutes  as  section 
5258.     This  act  was  entitled  in  its  preamble, 

""Whereas  the  constitution  of  the  United  States  confers  upon 
congress  in  express  terms,  the  power  to  regulate  commerce 

iRobbins  V.  Shelby  County  Tax-  3  Wabash,  St.  L.  &  P.  R.  Co.  v. 

ing  District,  supra.  Illinois,  supra. 

2  Bowman  v.  Railway  Co.,  supra; 
Leisy  v.  Hardin,  supra. 


§    42 J        FEDERAJ.    HEGLLATION    OF   INTERSTATE    COMMERCE.  65 

among  the  several  states,  to  establish  jjost-roads,  and  to  raise 
and  support  armies," 

and  it  provided  as  follows: 

"Every  railroad  companj^  in  the  United  States,  whose  road 
is  operated  by  steam,  its  successors  and  assigns,  is  hereby 
authorized  to  earr^-  ui)on  and  over  its  road,  boats,  bridges  and 
ferries,  all  passengers,  troops,  government  supplies,  mails, 
freight  and  property  on  their  way  from  any  state  to  another 
state,  and  to  receive  compeiisation  therefor,  and  to  connect 
with  roads  of  other  states,  so  as  to  form  continuous  lines  for  the 
transportation  of  the  same  to  the  place  of  destination.     .     .     . 

"This  section  shall  not  be  construed  to  authorize  any  railroad 
company  to  build  any  new  road,  or  any  connection  with  an- 
other road,  witliout  authority  from  the  state  in  which  such  rail- 
road or  connection  shall  be  proposed." 

The  purpose  of  this  act,  as  declared  by  the  supreme  court, 
was  to  remove  trammels  upon  transportation  which  had  previ- 
ously existed,  and  to  preveiit  the  creation  of  such  trammels  in 
the  future,^  and  also  to  be  a  declaration  by  congress  in  favor  of 
the  great  policy  of  continuous  lines,  and  therefore  as  favoring 
such  business  arrangements  between  companies  as  would  make 
such  connections  effective,-  and  as  indicating  an  intent  that 
interstate  commercial  intercourse  should  be  free.^' 

The  statute  however  imposes  no  duties  upon  carriers  so  as 
to  compel  through  routing  of  interstate  traffic,  and  merely  per- 
mits or  authorizes  the  carriage  of  freight  or  traffic  from  one 
state  to  another  and  the  formation  of  continuous  lines  by  mu- 
tual agreement.^  The  act  was  only  intended  to  remove  tram- 
mels upon  transportation  between  different  states  imposed  by 
state  enactments  or  the  then  existing  laws  of  congress,  and  did 
not  prevent  the  operation  of  police  laws  of  the  states  affecting 
interstate  railways.'"' 

This  statute  has  been  invoked  in  a  number  of  cases,  wherein 

1  Railroad  Co.  v.  Richmond,  19  such  business  arrangements  as 
Wall.  584   (1873),  22  L.  Ed.  173.  will  make  such  connections  effect- 

2  Union  Pacific  R.  Co.  v.  Chicago,      ive,  are  made." 

etc.,  R.  Co.,  163  U.  S.  5C4   (1896),  3  Bowman  v.  C.  &  N.  W.  R.  R., 

41  L.  Ed.  265,  274,  where  the  court  125  U.  S.  465  (1888),  31  L.  Ed.  700. 

said:    "It  is  impossible  for  us  to  ■»  Kentucky  &  Indiana  Bridge  Co. 

ignore  the  great  public  policy  in  v.  L.  &  N.  R.  Co.,  37  Fed.  Rep.  567, 

favor  of  continuous  lines  thus  de-  1.  c.  p.  633  (1889). 

clared  by  congress  and  that  it  is  s  R.  R.  Co.  v.  Fuller,  17  Wall.  560 

an  effectuation  of  such  policy  that  (1873),  21  L.  Ed.  710. 
5 


66  FEDER.VL    REGULATION   OP   INTERSTATE    COMMERCE.        [§    43 

the  validit}^  of  state  legislation  affecting  interstate  railways 
was  involved;  and  it  has  been  uniformly  held  by  the  supreme 
court  that  the  statute  was  not  intended  to  interfere  with  the 
authority-  of  the  states  to  enact  such  regulations  with  respect 
at  least  to  a  railroad  corporation  of  its  own  creation,  as  were 
not  directed  against  interstate  commerce,  but  which  only  in- 
cidentally or  remotely  affected  such  commerce,  and  were  not 
in  themselves  regulations  of  interstate  commerce,  but  were  de- 
signed reasonabl}^  to  subserve  the  convenience  of  the  public.^ 
Thus,  the  statute  did  not  interfere  with  state  enactments,  as 
the  running  of  trains  on  Sunday,-  or  excluding  diseased  cat- 
tle.^ Neither  did  this  declaration  of  the  national  policy, 
favoring  continuous  transportation,  exempt  railroad  cars  em- 
ployed in  interstate  transportation  from  the  attachment  laws 
of  the  states,  nor  the  railroad  companies  from  the  process  of 
garnishment  therein.* 

§  43.  State  control  of  local  business  and  incorporation  of 
interstate  railroads. — Though  this  statutory  declaration  of 
national  policy  in  1866  was  not  directly  involved,  the  principle 
is  applicable  to  recent  decisions  of  the  supreme  court  holding 
invalid  the  attempted  state  revocation  of  the  license  of  inter- 
state railroads  and  telegraph  companies  to  do  a  local  business 
in  the  state,  notwithstanding  the  admitted  state  control  over 
the  admission  of  foreign  corporations  engaged  in  general  busi- 
ness and  its  attempted  control  over  the  local  business  of  inter- 
•state  railroads  and  telegraph  companies.  Thus  a  statute  of 
Missouri  forfeiting  the  right  of  a  railroad  company  to  do  a 
local  business  in  the  state,  when  under  the  sanction  of  the  state 
it  had  come  into  the  state  and  acquired  a  large  amount  of 
property  therein,  in  ease  it  should  bring  a  suit  in  the  federal 
court  or  remove  from  the  state  to  the  federal  courts,  was  held 
void."' 

The  statute  of  Kansas  was  also  held  void  which  exacted  from 

1  Lake  Shore  &  M.  S.  Ry.  Co.  v.  <  See  supra.  §  39. 

Ohio,  173  U.  S.  285,  43  L.  Ed.  702  s  Herndon  v.  C.  P.   I.   &  P.  Ry. 

(1899).  Co.,  218  U.  S.  p.  135;   54  L.  Ed.  p. 

2  Hennington  v.  Georgia,  stipra.  970   (1910),  affirming  157  Fed.  783 

3  M.  K.  &  T.  R.  Co.  V.  Haber,  169  (1910). 
U.  S.  613   (1898),  42  L.  Ed.  878. 


§    44]        FEDERAL    UEGULATION    OF   INTERSTATE    COMMERCE.  G7 

a  foreign  telegraph  company  a  charter  fee  of  a  given  per  cent 
of  tlie  entire  authorized  capital  stock  of  the  company  as  a 
condition  of  continuing  to  do  local  business  in  the  state. ^ 

Both  these  cases  involved  the  right  of  corporations  in  the 
state,  which  had  made  investments  therein,  for  the  purpose  of 
doing  both  an  interstate  and  local  business.  A  broader  ques- 
tion of  the  right  of  the  state  to  prevent  an  interstate  railroad 
or  telegraph  company  of  another  state  from  entering  the  state, 
or  to  require  reincorporation  as  a  state  corporation  as  a  con- 
dition of  entering  the  state,  Avas  not  decided.  Tt  would  seem 
however  that  the  right  of  an  interstate  railroad  or  other  inter- 
state company  to  do  a  local  business  under  reasonable  state 
regulation  is  an  incident  of  the  right  to  transact  an  interstate 
business,  and  that  congress  is  the  only  authority  which  can 
prescribe  the  limitation  of  the  right  of  a  corporation  directly 
engaged  as  an  instrumentality  of  interstate  commerce  to  enter 
a  state. 

§  44  (41).  State  regulation  of  railways  in  the  United  States. 

With  this  judicial  declaration  of  the  freedom  of  interstate 
commerce  from  state  control  also  came  the  distinct  judicial 
recognition  of  the  governmental  power  of  regulation  over 
public  carriers.  This  principle  had  been  already  established 
both  in  the  states  of  this  country  and  in  England. 

Thus  in  this  country  prior  to  the  adoption  of  the  interstate 
commerce  act  railway  commissions  had  been  established  in 
several  states,  some  with  powers  of  regulation,  and  others  only 
Avith  powers  of  investigation  and  recommendation.  It  was 
establisliod  in  the  Granger  cases,^  that  railroad  companies 
were  carriers  for  hire  and  as  such  were  engaged  in  the  public 
employment  affecting  the  public  interests  and  were  subject 
to  legislative  control  as  to  their  rates  of  fare  and  freight,  un- 
less protected  by  their  own  charters  therefrom.  As  carriers 
they  must  carry  when  called  upon  to  do  so,  and  can  charge 
only  a  reasonable  sum  for  the  carriage.     The  principle  was 

1  Western  Union   Telegraph   Co.  (1876),  24  L.  Ed.  77;  Railroad  Co. 

V.  Kansas  ex  rel.,  216  U.  S.  1,  54  v.  Iowa,  94  U.  S.  155  (1876),  24  L. 

L.  Ed.  355.  reversing  75  Kan.  609  Ed.  94;  Peik  v.  Railway  Co.,  94  U. 

,(1910).  S.  164  (1876),  24  L.  Ed.  97. 

2Munn  V.  Illinois,  94  U.  S.  113 


68  FEDER.VL   REGULATION   OF   INTERSTATE    COMMERCE.        [§    45 

also  distinctly  declared  that  -when  property  had  been  clothed 
with  a  public  interest,  the  legislature  may  fix  a  limit  to  that 
which  in  law  shall  be  reasonable  for  its  use,  and  that  this  limit 
binds  the  courts  as  well  as  the  people.  It  was  urged  in  these 
cases  that  the  statutes  of  the  states  regulating  rates  amounted 
to  a  regulation  of  commerce  among  the  states ;  but  it  was  held 
that  where  the  railroad  was  employed  in  state  as  well  as  in  in- 
terstate commerce,  and  until  congress  acted,  the  state  must  be 
permitted  to  establish  such  rules  and  regulations  as  may  be 
necessary  for  the  promotion  of  the  general  welfare  of  the  peo- 
ple within  its  OAvn  jurisdiction,  even  though  in  doing  so  those 
without  may  be  indirectly  affected. 

"While  there  has  been  some  difference  of  judicial  opinion  as 
to  what  classes  of  business  were  affected  with  a  public  use  so 
as  to  warrant  state  regulation  of  charges,  there  has  been  no 
such  difference  as  to  the  application  of  the  principle  to  com- 
mon carriers,  and  their  subjection  to  public  regulation  has 
been  uniformly  conceded.^ 

§  45  (42).  Governmental  regulation  of  railways  in  England. 
The  principle  of  governmental  regulation  of  railways  was 
adopted  in  England  soon  after  the  first  introduction  of  rail- 
ways in  that  country.  Thus,  the  Railways  Clauses  Consolida- 
tion Act  of  1845,  in  granting  the  power  to  vary  tolls  upon 
railways  so  as  to  accommodate  them  to  the  circumstances  of 
the  traffic,  provided  that  tolls  should  be  at  all  times  charged 
equally  to  all  persons,  and  that  the  power  of  varying  should 
not  be  used  for  the  purpose  of  prejudicing  or  favoring  particu- 
lar parties,  or  for  the  purpose  of  collusively  or  unfairly  creat- 
ing a  monopoly  either  in  the  hands  of  the  company  or  of  par- 
ticular parties.  The  Railway  and  Canal  Traffic  Act  of  1854  - 
specifically  provided  that  the  railway  company  should  make 
arrangements  for  receiving  and  forwarding  freight,  and  pro- 
hibiting any  undue  or  unreasonable  preference  or  advantage, 
using  substantially  the  language  adopted  in  the  third  section 

1  Budd  v.  New  York,  143  IT.   S.  (1901) ;  Minneapolis  &  St.  Louis  R. 

.517  (1892),  36  L.  Ed.  247;  Brass  V.  Co.   v.    Minnesota,    186    U.    S.    257 

North     Dakota,     153     U.     S.     391  (1902),  46  L.  Ed.  1151. 

(1894),  38  L.  Ed.  757;  State  ex  rel.  217  and  18  Vic,  c.  31. 
V.   Associated   Press,  159   Mo.   410 


§    46]        FEDERAL    KEGLLATIOX    OF   INTERSTATE    COMMERCE.  G'J 

of  the  Interstate  Commerce  Act,  and  authorized  summary 
proceedings  in  the  courts  for  the  enforcement  of  its  provisions. 
The  act  of  18G8  ^  provided  for  securing  equality  of  treatment 
where  the  railway  company  operates  its  steam  vessels;  and 
finally  the  Regulatioii  of  Railways  Act  of  1873  -  authorized 
the  appointment  of  not  more  than  three  commissioners,  one 
of  Avhom  should  be  experienced  in  the  law  and  one  of  experi- 
ence in  the  railway  business,  and  not  more  than  two  assistant 
commissioners,  and  this  commission  was  granted  very  compre- 
hensive powers,  including  the  power  of  making  through  routes 
and  apportioning  through  rates  thereon.  As  will  be  hereafter 
seen  some  of  the  provisions  of  the  Interstate  Commerce  Act 
are  based  upon  the  English  statutes,  and  the  English  decisions 
construing  those  statutes  have  been  frequently  cited  in  the 
federal  courts.^  English  precedents  however  in  the  matter 
of  public  regulation  of  railways  are  of  limited  value  in  this 
countrj'',  in  view  of  the  vast  difference  in  the  conditions  of  rail- 
road service.  In  the  one  there  is  compact  population  in  a 
limited  area;  in  the  other  a  great  continent,  with  immense 
tracts  of  sparsely  settled  and  newly  opened  territory,  covered 
with  a  great  network  of  railroads  and  with  numerous  com- 
peting communities. 

§  46  (43).  The  common  law  in  interstate  commerce. — There 
is  no  federal  common  law  in  the  sense  of  a  national  customary 
laAv  distinct  from  the  common  law  of  England,  such  as  the  com- 
mon law  adopted  by  the  several  states,  each  for  itself,  applied 
to  its  local  law  and  subject  to  such  alterations  as  may  be  pro- 
vided by  its  own  statutes.*  There  are  therefore  no  crimes  of 
the  United  States,  and  no  pains  and  penalties  are  enforced  by 
its  courts,  except  as  enacted  in  the  statutes  of  the  United  States. 

Under  section  721  of  the  Judiciary  Act  the  laws  of  the  sev- 
eral states  are  enforced  in  the  courts  of  the  United  States.' 

1  31  and  32  Vic,  c.  119.  b  "Sec.  721.    Laws  of  the  states; 

2  36  and  37  Vic,  c  48.  rules  of  decision.    The  laws  of  the 
i  Infra,      Interstate     Commerce      several    states,    except   where   the 

Act,  sees.  2  and  3.  constitution,  treaties,   or   statutes 

*Wheaton    v.     Peters,    8     Pet.  of  the  United  States  otherwise  re- 

1.    c.    658,   8   L.   Ed.    1079    (1834);  quire  or  provide,  shall  be  regarded 

Smith  v.  Alabama.  124  U.  S.  465  as   rules   of   decision   in  trials   at 

(1888),  31  L.  Ed.  508.  common  law,  in  the  courts  of  the 


70  FEDERAL    REGULATION    OF   INTERSTATE    COMMERCE.        [§46 

In  this  section,  by  the  "laws  of  the  states"  is  meant  the  stat- 
ute laws  of  the  states  as  construed  by  the  local  tribunals,  and 
not  the  rules  of  law  declared  by  the  decisions  of  the  states  in 
)natters  of  general  jurisprudence.^  The  federal  courts  are  not 
bound  to  follow  the  rulings  of  the  state  courts  on  questions  of 
general  commercial  law  or  of  equity  jurisprudence,  but  they 
declare  their  own  views  of  the  law,  irrespective  of  the  courts 
of  the  state,-  and  the  same  ruling  has  been  made  as  to  the 
legal  principles  controlling  the  liability  of  railroad  companies 
to  employes. 

There  was  no  federal  statutory  regulation  of  interstate  com- 
merce prior  to  the  enactment  of  the  interstate  commerce  law 
in  1887.  It  was  ruled  in  some  of  the  circuit  courts,  that  in  the 
absence  of  a  distinct  federal  common  law  or  statute,  there  was 
no  law  prior  to  1887  controlling  the  regulations  of  carriers  and 
shippers  in  interstate  commerce  and  warranting  a  recovery  on 
account  of  discriminating  charges  therein,  and  that  this  was 
a  matter  of  exclusive  federal  jurisdiction,  which  was  not  exer- 
cised prior  to  the  enactment  of  the  Interstate  Commerce  Act.^ 
It  was  therefore  held  that  the  state  courts  had  no  jurisdiction 
in  such  cases,  and  as  the  courts  of  the  United  States  in  removed 
cases  had  no  wider  jurisdiction  than  the  courts  from  which 
they  were  removed,  the  federal  courts  had  no  jurisdiction 
therein. 

This  question  of  the  common  law  in  interstate  commerce 
was  presented  to  the  supreme  court  in  1901  in  a  case  from 
Nebraska,*  where  the  supreme  court  of  that  state  had  sus- 
tained a  recovery  against  an  interstate  telegraph  companj^ 
for  alleged  discrimination  in  charges.  The  company  claimed 
that  as  there  was  no  federal  regulation  of  interstate  telegraph 

United  States,  in  cases  where  they  s  Swift  v.  Railroad  Co.,  58  Fed. 

apply."     (Act  Sept.  24,  1789,  c.  20,  Rep.  858;  Sheldon  v.  Railroad  Co., 

§  34,  1  Stat.  92.)  105    Fed.    Rep.    785.      See    contra, 

1  Railroad  Co.  v.  Baugh,  149  U.  Murry  v.  Railroad  Co.,  62  Fed. 
S.  368  (1893),  37  L.  Ed.  772.  Rep.  24,  35  C.  C.  A.  62   (1899),  92 

2  Swift  V.  Tyson,  16  Pet.  1  and  Fed.  Rep.  868;  Adams,  J.,  in  Kin- 
18  (1842),  10  L.  Ed.  865,  871;  navey  v.  Terminal  Association,  81 
Gates    V.    Bank,    100    U.    S.    239  Fed.'  802. 

(1879),    25   L.    Ed.    580;    Railroad  4 -Western  Union  Tel.  Co.  v.  Call 

Co.  V.  National  Bank,  102  U.  S.  14  Pub.  Co.,  181  U.  S.  92  (1901),  45  L. 
(1880),  26  L.  Ed.   61.  Ed.  765. 


§    40]        FEDERAL    REGULATION   OF    INTERSTATE    COMMERCK.  (  1 

rates,  tlii'i-e  could  be  no  recovery,  as  there  was  no  controlling 
statute  or  common  law  for  such  recovery.  The  supreme  court 
however  sustained  the  recovery,  holding  that  there  was  a 
common  law  in  force  generally  throughout  the  United  States, 
and  that  the  countless  multitude  of  interstate  commercial 
transactions  were  subject  to  the  rules  of  common  law  except 
so  far  as  they  were  modified  by  congressional  enactment. 
The  jurisdiction  of  the  state  court  to  enforce  these  principles 
of  the  common  law  in  interstate  commercial  transactions  was 
therefore  sustained. 

The  court  in  its  opinion  in  these  cases  refers  approvingly  to 
an  opinion  of  Judge  Shiras  in  the  Iowa  circuit,^  where  the 
subject  had  been  exhaustively  discussed  in  a  suit  for  damages 
against  a  railroad  carrier  on  account  of  alleged  discrimination 
in  interstate  shipments  prior  to  the  enactment  of  the  Inter- 
state Commerce  Act.  This  case  had  been  filed  in  the  state 
court  and  removed  to  the  United  States  circuit  court,  and  it 
w^as  held  that  the  state  court  had  jurisdiction  of  the  subject- 
matter,  and  therefore  the  United  States  court  had  jurisdiction 
over  the  removed  case,  as  congress  had  not  declared  any  ex- 
clusive jurisdiction  in  such  cases  for  the  federal  courts. 

Under  the  law  as  declared  in  these  cases,  the  principles  of 
the  common  law  were  enforced  as  to  matters  of  national  con- 
trol as  Avell  as  to  matters  of  state  control,  and  in  this  sense 
there  is  a  common  law  of  the  United  States  controlling  the 
relations  of  interstate  carriers  and  the  public,  and  the  enact- 
ments of  congress  in  the  regulation  of  those  relations  are  to 
be  construed  in  the  light  of  the  principles  of  the  common  law. 

This  applies  to  interstate  commerce  on  land.  Interstate 
commerce  carried  on  by  water,  wdiether  on  the  seas  or  on  the 
inland  navigable  waters  of  the  United  States,  is  subject  to  the 
rules  of  the  maritime  law  wliere  applicable. 

§  47  (44) .  Federal  and  state  courts  in  the  federal  reg-ulation 
of  interstate  commerce. — T^'nder  the  constitution  of  the  United 
States  the  judicial  power  of  the  United  States  is  extended  to 
cases  arising  under  the  constitution  and  laws  of  the  United 
States,  and  this  jurisdiction  may  be  made  exclusive  in  the 
federal  courts  by  congress  either  by  express  enactment  or  by 

1  Murray  v.  Railroad  Co.,  supra. 


72  FEDER.Ui   REGUliATION    OF   INTERSTATE    COMMERCE,        [§    46 

neecssary  implication  therein.^  It  was  at  one  time  questioned 
whether  the  state  courts  could  exercise  concurrent  jurisdic-  • 
tion  with  the  federal  courts  in  cases  arising  under  the  con- 
stitution, laws  and  treaties  of  the  United  States;  but  it  was 
said  by  the  supreme  court  in  the  case  cited  that  the  laws  of 
the  United  States  were  laws  in  the  several  states,  and  just  as 
much  binding  therein  on  the  citizens  and  courts  thereof  as 
were  the  laws  of  the  states.  Eights,  whether  legal  or  equit- 
able, acquired  under  the  laws  of  the  United  States  may  be 
prosecuted  in  the  courts  of  the  United  States,  or  in  the  state 
courts  competent  to  decide  questions  of  like  character  and 
class,  subject  however  to  the  qualification  that  when  a  right 
arises  under  a  law  of  the  United  States,  congress  may  give  to 
the  courts  of  the  United  States  exclusive  jurisdiction.- 

Under  the  act  of  1887,'  the  circuit  courts  of  the  United 
States  were  given  original  cognizance,  concurrent  with  the 
courts  of  the  several  states,  of  all  suits  of  a  civil  nature  in 
common  law  or  equity,  not  only  in  cases  of  diverse  citizenship, 
but  also  in  cases  arising  under  the  constitution  and  laws  of 
the  United  States,  or  treaties  made,  or  which  shall  be  made, 
under  their  authority.  This  is  subject  to  the  reservation  of 
the  exclusive  jurisdiction  of  the  United  States  courts  under 
section  711,  R.  S.  U.  S.,*  in  criminal,  patent,  admiralty  cases, 
and  suits  for  penalties  and  forfeitures  under  the  laws  of  the 
United  States.  Not  only  such  suits  brought  to  enforce  the 
provisions  of  specific  acts  of  congress,  but  also  all  suits  based 
upon  and  asserting  federal  rights  in  interstate  commerce,  are 
suits  arising  under  the  constitution  and  laws  of  the  United 
States,  and  the  circuit  courts  of  the  United  States  have  juris- 
diction thereof  irrespective  of  diverse  citizenship.  The  su- 
preme court  held  in  an  application  for  habeas  corpus  by  a  party 
committed  for  contempt  for  violating  an  injunction  granted  to 
an  interstate  railroad  to  prevent  interference  with  its  interstate 
traffic,  that  the  circuit  court  had  jurisdiction  irrespective  of 
citizenship,  and  that  a  case  arose  under  the  constitution  and 
laws  of  the  United  States,  whenever  the  plaintiff  sets  up  a  right 

1  Claflin  V.  Houseman,  93  U.  S.  s  See  Act  of  March  3,  1887,  and 
130  (1876),  23  L.  Ed.  833.                      August  13,  1888,  1  Compiled  Stats. 

2  See  Mr,  Hamilton  in  82d  Fed-      508. 

eralist.  *  Compiled  Statutes,  p.  577. 


§    47]        FEDERAL    REGULATION    OF    INTERSTATE    COMMERCE.  73 

to  wliicli  he  is  entitled  under  such  laws,  and  the  correct  deci- 
sion of  the  case  depends  upon  the  construction  of  such  laws,^ 

In  suits  brought  for  the  enforcement  of  riglits  in  interstate 
commerce  and  not  for  the  specific  enforcement  of  the  provi- 
sions of  tlie  Interstate  Commerce  Act  or  the  Anti-Trust  Act,  the 
state  courts  have  concurrent  jurisdiction  with  the  federal 
courts,  and  such  suits  may  be  brought  in  the  United  States 
circuit  courts  irrespective  of  citizenship  -  if  tliore  is  the  juris- 
dictional amount  in  controversy  $2,000.00  ($3,000.00  after  Jan. 
1,  1912  under  the  new  judicial  code).  The  fact  that  inter- 
state commerce  is  beyond  state  legislative  control  does  not 
ipso  facto  prevent  the  courts  of  the  state  from  exercising 
jurisdiction  over  cases  growing  out  of  that  commerce,^  but  the 
state  jurisdiction  is  excluded,  if  congress  has  made  exclusive 
the  jurisdiction  of  the  federal  courts. 

Both  in  the  Interstate  Commerce  Act  and  the  Anti-Trust  Act 
of  1890  there  is  an  express  vesting  of  jurisdiction  in  the  United 
States  courts  of  suits  brought  to  enforce  the  provisions  of  the 
act.  As  to  such  suits  brought  to  enforce  the  provisions  of  the 
Interstate  Commerce  Act,  it  has  been  held,  both  in  the  federal 
and  in  the  state  courts,  that  the  jurisdiction  is  exclusive  in  the 
United  States  courts.*  The  same  ruling  would  doubtless  be 
made  as  to  suits  brought  to  enforce  the  Anti-Trust  Act  of 
1890.^ 

A  suit  arises  under  the  constitution  and  laws  of  the  United 
States  only  when  the  plaintiff's  statement  of  his  OAvn  cause  of 

1  In  re  Lennon,  166  U.  S.  548,  1.  725;  Charles  v.  Mo.  Pac.  R.  R.  Co., 
c.  553,  41  L.  Ed.  1110.  168  Mo.  52;  Gulf,  C.  &  S.  F.  R.  R. 

2  See  section  8  of  Interstate  Co.  v.  Moore  (Texas),  83  S.  W. 
Commerce   Act,  infro.  Rep.   362.     In  the  Abilene  Cotton 

3  Murray  v.  Chicago  &  N.  W.  R.  Oil  Co.  and  Cisco  Oil  Mill  cases  the 
Co.,  62  Fed.  Rep.  25,  1.  c.  43.  supreme  court  reversed  the  judg- 

4  See  sections  8  and  9  of  Inter-  ments  in  the  state  courts  for  al- 
state  Commerce  Act,  inira;  Van  leged  excessive  charges  in  inter- 
Patten  V.  Railroad  Co.,  74  Fed.  state  rates  on  the  ground  that  re- 
OSl;  Swift  V.  Railroad  Co.,  58  Fed.  lief  should  have  been  sought  be- 
Rep.  858;  Edmunds  v.  111.  Central  fore  the  Interstate  Commerce  Com- 
R.  R.  Co.,  80  Fed.  Rep.  79;  Sheldon  mission.  See  §  9  Interstate  Com- 
V.  "Wabash  Ry.  Co.,  105  Fed.  Rep.  merce  Act,  infra. 

785 ;      Ordway     v.     Central     Nat.  b  See  sections  4  and  7  of  the  act 

Bank,  47  Md.  243:  Copp  v.  Railway      of  1890,  in/;a. 
■Co.,  43  La.  Ann.  511,  12  L.  R.  A. 


74  FEDER.yi,   REGULATION   OF   INTERSTATE    COMMERCE.        [§    -18 

action  shows  that  it  was  based  thereon.  It  is  not  enough  that 
the  defendant  may  find  in  the  constitution  or  laws  of  the  United 
States  some  grounds  of  defense.  It  is  also  settled  that  no 
cause  can  be  removed  from  the  state  court  to  the  circuit  court 
of  the  United  States  unless  it  could  have  been  originally- 
brought  in  the  latter  court.^ 

§  48.  Federal  causes  of  action  in  the  state  courts. — As  the 
laws  enacted  by  congress  in  its  regulation  of  interstate  com- 
merce are  the  laws  in  the  several  states,  rights  created  thereby 
may  be  enforced  in  the  state  courts  in  the  absence  of  exclusive 
legislation  vested  in  congress;  and  the  judgments  of  the  state 
courts  in  the  enforcement  of  said  rights  are  subject  to  review 
by  the  supreme  court  when  a  federal  right,  duly  asserted,  is 
denied  through  the  appellate  jurisdiction  of  the  supreme  court 
over  the  state  courts  under  the  Judiciary  Act.  Thus,  the  judg- 
ment of  the  supreme  court  of  Pennsylvania,  in  non-suiting  a 
plaintiff  in  an  action  for  personal  injuries,  was  reversed  by  the 
supreme  court  of  the  United  States  because,  in  holding  plain- 
tiff barred  by  contributory  negligence,  it  had  failed  to  give 
effect  to  the  provision  of  the  Federal  Safety  Appliance  Act  and 
tlie  rule  of  non-assumption  of  risk  therein  declared. - 

Under  the  amendment  of  the  Interstate  Commerce  Act  of 
1910  the  right  to  sue  in  the  state  courts  is  specifically  given  in 
actions  of  reparation  '^  and  in  the  1910  amendment  of  the  Em- 
ployer's Liability  Act  suits  in  state  courts  under  the  act  are 
not  subject  to  removal  to  the  federal  court. 

The  right  of  the  state  courts  to  exercise  this  jurisdiction  may 
not  carry  with  it  in  all  cases  the  duty  to  exercise  it.  Thus,  the 
procedure  of  the  state  court  may  not  be  suited  to  the  enforce- 
ment of  the  right  in  the  form  congress  directs;  and  the  rela- 

T-  In  re  Winn,  213  U.  S.  4.58,  53  2  Schlemmer  v.  R.  R.,  20.5  U.  S. 
L.  Ed.  873  (1909).  As  to  appel-  1;  51  L.  Ed.  681  (1907),  four 
late  jurisdiction,  where  the  juris-  judges  dissenting,  reversing  207 
diction  of  a  circuit  court  attaches  Pa.  198.  See  same  case  on  see- 
both  on  the  ground  of  diverse  cit-  ond  suit  of  error   220  U.   S.   590, 

izenship  and  also  on  the  separate       55    L.    Ed.   (1911),    affirming 

federal     ground,     see     Mississippi  222  Pa.  470. 

Railroad  Commission  v.  111.  Cent.  3  See  §  16  of  Act,  infra. 

R.  R.  Co.,  203  U.  S.  335,  51  L.  Ed. 

209   (1906). 


§    4f)j        FEDERAL    HEGL'LATJOX    (JF    JNTERSTATE    COMMERCE.  7.3 

tion  of  master  and  employe  as  established  and  enforced  iu  the 
courts  of  the  state  under  the  laws  of  the  state  may  be  different 
from  that  enjoined  by  congress,  and  confusion  and  embarrass- 
ment may  result  from  the  enforcement  of  both  in  the  same 
tribunals.  In  a  recent  case  the  sujjreme  court  of  Connecticut 
declined  to  assume  jurisdiction  in  a  suit  under  the  Employer's 
Liability  Act  of  IflOS  prior  to  its  amendment  of  the  act  of  1010 
supra,  both  on  the  ground  that  congress  did  not  intend  to  con- 
fer such  jurisdiction  on  the  state  court,  and  on  the  further 
ground  that  if  it  did  so  intend  the  state  court,  in  the  absence 
of  state  legislation,  was  not  bound  to  assume  it.^  As  to  this 
latter  ground,  however,  whatever  the  embarrassment  in  exer- 
cising jurisdiction  owing  to  statutory  forms  of  procedure,  a 
state  court  in  the  enforcement  of  a  right  created  by  federal 
law  is  controlled  by  the  provision  of  the  constitution  of  the 
United  States,  that  this  constitution  and  the  laws  of  the  United 
States  which  should  be  made  in  pursuance  thereof  *  *  * 
shall  be  the  supreme  law  of  the  land;  and  the  judges  in  every 
state  shall  be  bound  thereby,  anything  in  the  constitutional 
laws  of  any  state  to  the  contrary  nothwithstanding.- 

In  invoking  the  federal  jurisdiction  for  the  assertion  of  a 
federal  right  by  a  private  litigant,  the  amount  of  $2,000.00 
($3,000.00  after  July  1,  1912)  must  be  involved  in  the  contro- 
versy. 

§  49  (45).  Genesis  of  the  Interstate  Commerce  Act. — Tlie  rec- 
ognition of  the  governmental  power  in  controlling  interstate 
commerce  immediately  preceded  the  judicial  declaration  that 
interstate  railway  transportation  was  beyond  state  control. 
The  question  of  interference  with  interstate  commerce  had 
been  raised  in  the  Granger  cases,  and  the  supreme  court  had 
held  ■■'  that  the  act  regulating  fares  was  valid  in  the  absence  of 
regulation  by  congres:;,  and  that  until  congress  undertook  to 
legislate  for  those  who  were  without  the  state,  the  state  could 
provide  for  those  within,  even  though  those  without  might  be 
indirectly  affected. 

iHoxsie  v.  N.  Y.  &  N.  H.  H.  R.  2  Co:  stitution.   Art.   VI.,   par.   2. 

Co.,  82  Conn.  352   (1909).     See  in-  3  Pike  v.  Chicago,  etc.,  R.  Co.,  94 

^ra_  §  530.  U.  S.  1.  c.  177  (1S76),  24  L.  Ed.  98. 


76  FEDER.VL   REGULATION   OP   INTERSTATE    COMMERCE.        [§    50 

The  supreme  court  of  Illinois  ^  cited  these  cases  in  sustaining 
a  state  statute  as  to  so  much  of  interstate  transportation  as 
was  Avithin  the  limits  of  the  state  of  Illinois.  But  the  supreme 
court  in  the  same  case  {supra,  §  37),  said  that  in  the  Granger 
cases  the  importance  of  the  question  of  the  governmental  power 
of  regulation  and  of  the  company's  contract  right  of  exemption 
therefrom  overshadowed  all  others,  so  that  the  question  of 
freedom  of  interstate  commerce  received  but  little  attention 
at  the  hands  of  the  court.  This  decision  of  the  supreme  court 
reversing  the  supreme  court  of  Illinois,  was  rendered  in  1886, 
in  the  same  year  that  the  freedom  of  interstate  commerce  from 
the  state  taxing  power  was  declared  in  the  Tennessee  drummer 
case,  and  broadly  affirmed  that  the  statute  of  a  state  enacted 
to  regulate  and  tax,  or  to  impose  any  other  restriction  upon 
the  transmission  of  persons  or  property  or  telegraph  messages 
from  one  state  to  another,  was  not  within  the  class  of  legisla- 
tion which  the  state,  in  the  absence  of  legislation  by  congress, 
could  enact,  and  that  the  state  statute  was  void  as  to  all  inter- 
state shipments,  including  that  part  of  the  transmission  of  such 
shipments  Avhich  was  within  the  state. 

§  50  (46).  Passage  of  the  Interstate  Commerce  Act. — The 

decision  in  the  "Wabash  case  demonstrated  the  lack  of  power  in 
the  states  to  regulate  interstate  shipments.-  and  the  demand 
for  the  exercise  of  this  power  by  congress  becoming  irresisti- 
ble, the  interstate  commerce  bill  which  had  been  pending  for 
several  years  in  congress  became  a  law  February  4,  1887.^ 

The  discussion  in  the  two  houses  of  congress  and  in  the  pub- 
lic press  was  mainly  directed  to  the  long  and  short  haul  clause 
contained  in  the  fourth  section,  and  the  prohibition  of  pooling 
contained  in  the  fifth  section  of  the  act.  Differences  of  opin- 
ion developed  between  the  house  and  the  senate,  the  former 
insisting  on  the  prohibition  of  pooling  and  on  a  qualified  long 
and  short  haul  clause.  The  bill  was  finally  enacted  in  the  form 
reported  by  the  conference  committee  of  the  two  houses  of 

1  "Wabash,  St.  L.  &  P.  R.  Co.  v.  mission  was  established  March  22, 
Illinois,  104  111.  476.  1887,  but  the  terms  of  the  commis- 

2  This  case  was  decided  October  sioners  were  computed  from  Jan- 
25,  1886.  uary  1st.    See  19  Opinion  of  Attor- 

3  The  interstate  commerce  com-  ney  Generals,  p.  47,  1887. 


51]        FEDERAL    REGULATION   OF   INTERSTATE    COMMERCE. 


77 


congress.  Frequent  references  Avere  made  in  the  dt-bates  to 
the  tlien  recent  decision  of  the  supreme  court  in  the  Wabash 
case  denj'ing  to  the  states  any  power  for  the  regulation  of  in- 
terstate traffic.  A  very  wide  difference  of  opinion  was  devel- 
oped in  the  discussion  as  to  the  proper  construction  of  the  act, 
particularly  as  to  what  were  the  "substantially  similar  circum- 
stances and  conditions"  in  the  fourth  section,  and  one  of  the 
members  of  the  house  in  the  final  debate  described  the  bill  as 
"one  which  nobody  understands,  nobod}'  wants,  and  every- 
body is  going  to  vote  for."  ^ 

§  51.  The  successive  amendments  of  the  Interstate  Com- 
merce Act. — The  act  to  regulate  commerce  was  so  clearly  within 
the  power  of  congress  that  no  serious  question  was  raised  as 
to  its  constitutionalit}'.     Very  grave  questions  however  were 


1  For  a  comprehensive  and  ac- 
curate statement  of  the  condition 
of  the  state  regulation  of  railroads 
at  and  prior  to  the  adoption  of  the 
interstate  commerce  act,  see  Had- 
ley's  "Railroad  Transportation,  its 
History  and  its  Laws,"  first  pub- 
lished in  1885.  See  also  report  of 
Windom  to  U.  S.  Senate,  1874, 
(Senate  Report  No.  307,  43rd  Coa 
gress,  1st  Session).  Cullom  Re- 
port (Senate  Report  No.  46,  49th 
Congress,  1st  Session).  Hepburn 
Report,  New  York  legislature  of 
1879. 

In  the  Import  Rate  Case,  162  U. 
S.  211,  40  L.  Ed.  944,  the  supreme 
court  in  referring  to  the  causes  for 
the  enactment  said: 

"They  chiefly  grew  out  of  the 
use  of  railroads  as  the  principal 
modern  instrumentalities  of  com- 
merce. While  shippers  of  merchan- 
dise were  under  no  legal  necessity 
to  use  railroads,  practically  they 
were.  .  .  .  From  the  very  na- 
ture of  the  case,  therefore,  rail- 
roads   were    monopolies,    and    the 


evils  that  usually  accompany  mo.- 
nopolies  soon  began  to  show  them- 
selves, and  were  the  cause  of  loud 
complaints.  The  companies  own- 
ing the  railroads  were  charged, 
and  sometimes  truthfully,  with 
making  unjust  discriminations  be- 
tween shippers  and  localities,  with 
making  secret  agreements  with 
some  to  the  detriment  of  other 
patrons,  and  with  making  pools  or 
combinations  with  each  other, 
leading  to  oppression  of  entire 
communities.  ...  As  the  pow- 
ers of  states  were  restricted  to 
their  own  territiories  and  did  not 
enable  them  efficiently  to  control 
the  management  of  great  corpora- 
tions whose  roads  extend  through- 
out the  entire  country,  there  was  a 
general  demand  that  congress,  in 
the  exercise  of  its  plenary  power 
over  the  subject  of  foreign  and  in- 
terstate commerce,  should  deal 
with  the  evils  complained  of  by  a 
general  enactment,  and  the  stat- 
ute in  question  was  the  result." 


78  FEDERAL    REGULATION   OF   INTERSTATE    COMMERCE.        [§    51 

made  as  to  what  powers  were  conferred  upon  the  commission 
by  the  terms  of  the  act  and  as  to  the  construction  of  the  dif- 
ferent sections  of  the  act  in  relation  thereto,  and  the  discus- 
sion and  determination  of  these  questions  led  to  continuous 
agitation  for  amendments  to  the  act.  Thus,  it  wall  be  seen 
under  the  different  sections  of  the  act  {infra,  part  II),  the  pow- 
-ers  of  the  commission  Avere  construed  by  the  supreme  court  to 
be  materially  different  from  the  powers  claimed  and  exercised 
by  the  commission  during  the  first  years  of  its  existence. 

Thus  it  was  held  that  the  commission  under  the  act  as  orig- 
inally framed  had  no  power  to  make  maximum  and  minimum 
rates  for  the  future/  and  that  the  competition  between  the 
carriers  created  substantially  different  circumstances  and  con- 
ditions within  the  meaning  of  section  4,  known  as  the  long  and 
short  haul  clause.- 

Amendatory  acts  have  been  passed  by  congress  in  1889,  1893, 
1903, 1906,  1908  and  1910.  That  of  1889  gave  the  shipper  an  ad- 
ditional summary  and  effective  remedy  by  writ  of  mandamus 
to  compel  the  carrier  to  furnish  equal  facilities  (infi^a,  §  419)  ;  ^ 
that  of  1893  remedied  the  defect  groAving  out  of  the  diffi- 
culty to  enforce  self-incriminating  testimony  {infra,  §  843)  ; 
the  act  of  1903,  knoAvn  as  the  Elkins  Law,  made  very  import- 
ant changes,  materially  enforced  the  provisions  against  dis- 
crimina.tions,  in  that  it  made  the  public  rates  conclusive  against 
the  carrier,  every  deviation  therefrom  being  punishable.     The 

1  Social   Circle   Case,   162  U.    S.  to  the  increase  of  their  business,  to 

184,  40  L.  Ed.  935  (1895).     In  this  classify  their  traffic,  to  adjust  and 

case   the   court    quoted    from    the  apportion  their  rates  so  as  to  meet 

opinion  of  .Justice  Jackson  in  the  the  necessities  of  commerce,  and 

circuit   court    (43   Fed.   47)    as   to  generally  to  manage  their  impor- 

the  scope  of  the  act,   as  follows:  tant  interests  upon  the  same  prin- 

"Subject  to  the  two  leading  pro-  ciples     which     are     regarded     as 

hibitions  that  their  charges  shall  sound,  and  adopted  in  other  trades 

not  be  unjust  or  unreasonable,  and  and  pursuits."    Cincinnati  Freight 

that  they  shall   not  unjustly   dis-  Bureau  case,  167  U.  S.  479,  42  L. 

criminate,    so    as    to    give    undue  Ed.  243  (1896). 

preference  or  disadvantage  to  per-  2  Import    Rate    case,    162    U.    S. 

sons    or    traffic    similarly    circum-  197,  40  L.  Ed.  940  (1895). 

stanced,  the  act  to  regulate  com-  3  See  B.  &  O.  R.  R.  v.  U.  S.  ex 

merce  leaves  common  carriers  as  rel.,  215  U.  S.  481,  54  L.  Ed.  292 

they  were  at  the  common  law,  free  (1910). 
to  make  special  contracts  looking 


§    51]        FEDERAL    REGULATION   OP   INTERSTATE    COMMERCE. 


79 


scope  of  the  act  was  also  materially  extended  as  to  the  par- 
ties subject  to  its  provisions.  Fine  was  substituted  for  im- 
prisonment in  the  penal  provisions  of  the  act  {infra,  §  422). 
In  1903  was  also  enacted  the  so-called  Expedition  Act  {infra, 
§  490)  which  materially  expedited  the  procedure  in  suits 
brought  by  the  United  States  or  suits  prosecuted  by  the  attor- 
ney-general in  the  name  of  the  Interstate  Commerce  Commis- 
sion. 

The  most  important  amendments  were  those  of  1906  and 
1910.     The  act  of  190r>.  known  as  the  Hepburn  Act/  not  only 


1  The  Hepburn  or  Rate  Bill  of 
1906  became  a  law  on  June  29, 
1906,  and,  under  joint  resolution, 
took  effect  sixty  days  after  its  ap- 
proval, that  is,  on  August  28,  1906. 
A  bill  embodying  many  of  the 
same  features,  known  as  the  Esch- 
Townsend  Bill,  had  been  passed  in 
the  House  of  Representatives  in 
the  Fifty  eighth  Congress,  but  did 
not  come  to  a  vote  in  the  senate. 
Very  exhaustive  hearings  were 
had  by  the  Interstate  Commerce 
Committees  in  both  the  house  and 
senate,  containing  the  testimony 
of  railroad  officials,  shippers, 
economists,  and  members  of  the 
Interstate  Commerce  Commission, 
representing  all  shades  of  opinion. 
The  discussions  in  congress,  espe- 
cially in  the  senate,  related 
mainly  to  the  increased  powers 
given  to  the  commission  and  the 
judicial  review  provided  in  the 
act. 

In  the  course  of  the  senate  hear- 
ing, Attorney  General  Moody,  at 
the  req-:^st  of  the  committee,  ren- 
dered an  opinion  May  5,  1905  (Vol. 
II  of  Senate  Reports,  p.  1674), 
embodying  the  following  con- 
clusions : 

"1.  There  is  a  governmental 
power  to  fix  the  maximum  future 


charges  of  carriers  by  railroad, 
vested  in  the  legislatures  of  the 
states  with  regard  to  transporta- 
tion exclusively  within  the  states, 
and  vested  in  congress  with  re- 
gard to  all  other  transportation. 

"2.  Although  legislative  power, 
properly  speaking,  cannot  be  dele- 
gated, the  lawmaking  body,  hav- 
ing enacted  into  law  the  standard 
of  charges  which  shall  control, 
may  intrust  to  an  administrative 
body  not  exercising  in  the  true 
sense  judical  power,  the  duty  to  fix 
rates  in  conformity  with  that 
standard. 

"3.  The  rate-making  power  is 
not  a  judicial  function  and  cannot 
be  conferred  constitutionally  upon 
the  courts  of  the  United  States, 
either  by  way  of  original  or  appel- 
late jurisdction. 

"4.  The  courts,  however,  have 
the  power  to  investigate  any  rate 
or  rates  fixed  by  legislative  author- 
ity and  to  determine  whether  they 
are  such  as  would  be  confiscatory 
of  the  property  of  the  carrier,  and 
if  they  are  judicially  found  to  be 
confiscatory  in  their  effect,  to  re- 
strain their  enforcement. 

"5.  Any  law  which  attempts  to 
deprive  the  courts  of  this  power  is 
unconstitutional." 


80  FEDERAL    REGULATION   OF   INTERSTATE    COMMERCE.        [§    51 

broadened  the  scope  of  the  act  by  the  inclusion  of  pipe  lines^ 
express  companies  and  sleeping  car  companies  and  all  the  in- 
strumentalities and  facilities  of  shipment  or  carriage,  with  the 
prohibition  of  free  passes  and  the  so-called  commodity  clause, 
seeking  to  prohibit  the  carrier  from  transporting  its  own  com- 
modities, compelling  such  connections,  restoring  the  punish- 
ment of  imprisonment,  authorizing  the  commission  to  establish 
through  routes,  imposing  liability  upon  the  initial  carrier  for 
damage  on  a  through  shipment  and  most  important  of  all  au- 
thorizing the  commission  in  determining  that  any  rate  was  un- 
reasonable to  also  determine  and  prescribe  the  just  and  rea- 
sonable rate  or  rates  to  be  thereafter  charged  as  the  maximum 
to  be  charged,  and  what  regulation  in  respect  to  the  transporta- 
tion is  just,  fair  and  reasonable  to  be  thereafter  followed,  the 
limit  of  two  years  being  fixed  for  the  time  wherein  any  order 
should  be  in  force. 

Another  important  amendment  in  this  act  of  1906,  was  a 
very  substantial  enlargement  of  the  powers  of  the  commission 
in  the  requirement  of  annual  reports  from  the  carriers  showing 
the  details  of  their  financial  operations,  authorizing  the  com- 
mission in  its  discretion  to  describe  the  forms  of  the  accounts 
and  records  to  be  kept  by  the  carrier,  making  it  unlawful  for 
them  to  keep  any  other  accounts  than  those  prescribed  by  the 
commission,  and  further  authorizing  the  commission  to  employ 
special  agents  or  commissioners  for  the  inspection  of  any  and 
all  accounts  carried.^ 

He  also  advised  that  reasonable  dents  Roosevelt  and  Taft  in  their 
rates  determined  by  the  legislative  messages  to  congress  and  strongly 
authority  would  net  constitute  a  urged  in  the  discussions  of  the 
preference  between  the  ports  of  amendments  of  1906  and  1910,  that 
different  states  within  the  pro-  the  prohibition  of  pooling  in  sec- 
hibition  of  article  I,  section  9,  tion  5  of  the  Interstate  Commerce 
paragraph  6,  of  the  Constitution,  Act  should  be  modified  and  rail- 
even  though  they  resulted  in  a  roads  exempted  from  the  restraints 
varying  charge  per  ton  per  mile  to  of  the  Anti-trust  Act,  so  as  to  per- 
and  from  the  ports  of  the  different  mit  conferences  and  agreements  of 
states.  carriers  as  to  rates  under  the  reg- 

1  For  the  action  of  the  commis-  ulating   suprvision    of    the    Inter- 

sion    in    the    enforcement    of    this  state  Commerce  Commission.   This 

provision  with  the  co-operation  of  was  advocated  on  the  ground  that 

the   state   commission,    see   infra,  unregulated  competition  regarding 

§  409.  It  was  recommended  by  Pres-  rate  wars  was  detrimental  to  the 


§    52]        FEDERAI.    HEGLLATION    OP   INTERSTATE    COMMERCE.  81 

The  coiiiiiiission  in  its  icpoi-l  iu  ]!H)7  said  of  lln'  aiiicudment 
of  1906  "Substantive  pi-ovisions  of  the  original  act  prohibiting 
the  exaction  of  imreasonablc  cliarges  and  prohibiting  discrimi- 
nation between  persons  and  i)la('('s  wwo  unchanged  by  the 
legislation  of  1906.  The  main  purpose  of  that  legislation  was 
to  provide  more  adequate  means  for  the  enforcenieiit  of  rights 
and  duties  declared  to  exist." 

The  act  of  June  18,  1910  (36  Stats.  L.  5-39),  comnioidy  known 
as  the  ]\rann-Elkins  Law,  in  the  language  of  the  commission 
(24th  Annual  Report,  1910)  "enlarged  tlie  substantive  provi- 
sions of  the  act  to  regulate  commerce,  corrected  numerous  de- 
fects, which  experience  had  disclosed,  conferred  upon  the  public 
new  rights  and  remedies  and  correspondingly  increased  the  ju- 
risdiction and  authority  of  the  commission." 

The  most  important  feature  of  the  act  of  1910  was  the  au- 
thorization of  the  commission  to  investigate  any  new  schedule- 
of  rates  or  single  rate  proposed  by  a  carrier  and  pending  such 
investigation,  to  suspend  the  taking  effect  of  such  schedule  or 
rate,  for  a  period  not  exceeding  one  hundred  twenty  days. 

§  52.  The  enlarged  powers  and  jurisdiction  of  the  Interstate 
Commerce  Commission. — While  the  substantive  provisions  of 
the  act  to  regulate  comnu'ree,  that  is,  the  requirement  that 
charges  should  be  reasonable  and  the  prohibition  of  unjust  dis- 
criminations or  undue  preferences  or  disadvantages  to  persons 
or  traffic  similarly  circumstanced  have  remained  unchanged 
since  their  first  enactment,  very  great  changes  have  been  made 
by  these  successive  amendments  as  to  the  scope  of  the  act,  the 
parties  subject  thereto  and  in  what  may  be  termed  its 
"adjective"  provisions,  making  effective  these  fundamental  re- 
quirements and  provisions  of  the  act,  and  these  successive 
amendments  have  added  very  materially  to  the  powers  and 
responsibility  of  the  Interstate  Commerce  Commission.^ 

public  as  woll  as  to  the  railroads  mission   has  been   increased   from 

and  that  the  public  good  required  five  members   in  the  original   act 

not  only  resonableness  but  stabil-  with     terms     of     six     years     and 

ity  in   railroad   rates.     This  view  salaries  of  $7,500  to  seven  commis- 

has  not  as  yet  prevailed  in  legisla-  sioners  with  terms  of  seven  years 

tion.  and    salaries    of    $10,000.      Infra, 

1  The   membership   of   the   com-  §   399. 
6 


82  FEDER.U.    REGULATION   OF   INTERSTATE    COMMERCE.        [§    52 

Xot  only  have  the  powers  of  the  commission  been  directly 
euLirged  in  their  inquisitorial  authority  in  the  requirement  of 
reports  from  the  railroads,  in  the  employment  of  examiners  in 
making  investigations,  and  in  compelling  the  attendance  of 
■witnesses  in  the  production  of  testimony,  as  will  be  seen  from 
the  detailed  construction  of  these  statutory  provisions,  but  there 
is  also  through  the  judicial  construction  of  the  statute,  by  the 
recent  decisions  of  the  supreme  court,  a  very  great  increase  of 
the  jurisdiction  and  responsibility  of  the  commission.  Thus, 
the  privilege  to  a  party  claiming  to  be  damaged,  given  by  sec- 
tion 9  of  the  act,  either  to  make  complaint  to  the  commission 
or  to  bring  suit  for  the  recovery  of  the  damages  in  a  district 
or  circuit  court,  has  been  construed  so  that  this  right  of  elec- 
tion does  not  exist  in  any  case  where  the  wrong  iuA^olves  viola- 
tion of  the  act,  which  is  subject  to  the  jurisdiction  of  the  com- 
mission, and  any  such  case  must  therefore  be  redressed  by  the 
commission  before  any  action  can  be  brought  in  court. ^ 

The  same  principle  has  been  applied  by  the  supreme  court 
to  the  specific  remedy  of  mandamus  authorized  by  section  23 
of  the  act  for  the  enforcement  of  duties  of  the  carrier ;  and  the 
right  to  this  remedy  is  construed  with  the  other  provisions  of 
the  act  and  practically  with  the  enlarged  powers  of  the  com- 
mission under  the  amendment  of  1906,  so  as  to  be  very  materi- 
ally abridged.^ 

The  comprehensive  power  of  the  commission  to  investigate 
and  determine  the  reasonableness  of  rates,  extends  to  cases 

1  T.  &  P.  R.  R.  Co.  v.  Abilene  require  action  by  the  commisson. 
Cotton  Oil  Co.,  204  U.  S.  449,  51  L,  In  the  Tift  case  the  court,  affirm- 
Ed.    562    (1907).  Ing  138  Fed.  753,  held  that  a  cir- 

2  B.  &  0.  R.  R.  Co.  V.  U.  S.  ex  rel.,  cuit  court  which  had  suspended 
215  U.  S.  481,  54  L.  Ed.  292  (1910).  proceedings  on  a  bill  seeking  re- 
It  was  said  in  this  case  that  the  de-  lief  from  an  advance  in  freight 
cision  in  Southern  R.  R.  Co.  v,  rates  pending  action  by  the  com- 
Tift,  206  U.  S.  428,  51  L.  Ed.  1124,  mission  could  grant  relief  under 
(1907),  did  not  qualify  the  rul-  section  16  of  the  Interstate  Com- 
ing in  the  Abilene  Oil  case  and  merce  Act  after  the  commission 
did  not  support  the  right  to  resort  had  acted,  where  defendants  had 
to  the  courts  in  advance  of  action  stipulated  in  open  court  that  in 
by  the  commission  for  relief  case  complainants  prevailed  de- 
against  unreasonable  rates  or  un-  cree  of  restitution  might  be  made, 
just  discriminatory  practices  See  inf.  a,  Part'  II,  sec.  9  and  sec. 
which  from  their  nature  primarily  23  of  Interstate  Commerce  Act. 


§    52]        FEDERAL    KEGULATIOX   OF   INTERSTATE    COMMERCE. 


83 


where  the  existing  rates  are  dependent  upon  certain  basing 
points  established  by  the  railroads,  and  so-called  zones  of  traf- 
fic are  dependent  thereon;  and  the  commission  may  determine 
that  the  rates  are  unreasonable,  although  the  reduction  may 
involve  a  change  in  such  basing  points.  Thus,  a  reduction  in 
that  part  of  the  through  rates  on  Atlantic  seaboard  shipments 
to  Missouri  river  cities  which  applied  to  the  haul  between  the 
^Mississippi  and  Missouri  rivers,  was  held  not  beyond  tlie  power 
of  the  commission  where  the  commission  by  its  order,  intended 
■only  to  correct  through  rates;  which  it  had  found  upon  com- 
plaint were  unreasonable  in  themselves,  by  substituting  there- 
for reasonable  rates,  and  that  the  findings  of  the  commission 
that  certain  through  rates  were  unreasonable  in  themselves 
carried  with  them  a  presumption  of  correctness  in  so  ruling.^ 
But  while  the  court  in  determining  whether  an  administrative 
order  of  the  commission  should  be  suspended  or  set  aside  will 
consider  whether  the  order  was  within  the  commission's  lawful 
jurisdiction,  and  not  whether  the  administrative  power  has  been 
wisely  exercised,-  on  the  other  hand,  where  the  power  of  the 


1  Interstate  Commerce  Commis- 
sion V.  Chicago,  R.  I.  &  P.  R.  Co., 
218  U.  S.  S8,  54  L.  Ed.  946  (1910), 
reversing  171  Fed.  680. 

2  Interstate  Commerce  Com- 
mission V.  Illinois  Central  R.  R. 
Co.,  215  U.  S.  452,  54  L.  Ed.  281 
(1910),  reversing  173  Fed.  930, 
where  the  court  said:  "Be- 
yond controversy.  In  determining 
-whether  an  order  of  the  commis- 
sion shall  be  suspended  or  set 
aside,  we  must  consider  (a)  all 
relevant  questions  of  constitu- 
tional power  or  right;  (b)  all  per- 
tinent questions  as  to  whether  the 
administrative  order  is  within  the 
scope  of  the  delegated  authority 
under  which  it  purports  to  have 
been  made;  and  (c)  a  proposition 
which  we  state  independentlj',  al- 
though in  its  essence  it  may  be 
contained  in  the  previous  one,  viz., 
whether,  even  although  the  order 


be  in  form  within  the  delegated 
power,  nevertheless  it  must  be 
treated  as  not  embraced  therein, 
because  the  exertion  of  authority 
which  is  questioned  has  been  mani- 
fested in  such  an  unreasonable 
manner  as  to  cause  it.  In  truth,  to 
be  within  the  elementary  rule  that 
the  substance,  and  not  the  shadow, 
determines  the  validity  of  the  ex- 
ercise of  the  power.  Postal  Teleg. 
Cable  Co.  v.  Adams,  155  U.  S.  688, 
698,  39  L.  Ed.  311,  316,  5  Inter. 
Com.  Rep.  1,  15  Sup.  Ct.  Rep.  268, 
360.  Plain  as  it  is  that  the  powers 
just  stated  are  of  the  essence  of* 
judicial  authority,  and  which, 
therefore,  may  not  be  curtailed, 
and  whose  discharge  may  not  be 
by  us  in  a  proper  case  avoided,  it 
Is  equally  plain  that  such  peren- 
nial powers  lend  no  support  what- 
ever to  the  proposition  that  we 
may,  under  the  guise  of  exerting 


84 


FEDERAL   REGULATION   OF   INTERSTATE    COMMERCE. 


[§  52 


commission  is  expressly  conditioned  by  the  act  as  in  establish- 
ing a  through  route  and  joint  rates  when  no  reasonable  or  satis- 
factory through  route  exists,  the  courts  will  review  the  deter- 
mination of  the  commission ;  and  it  was  held  that  the  personal 
I  .'eferences  of  many  travelers  for  another  through  route  to  the 
Pacific,  did  not  justify  the  Interstate  Commerce  Commission  to 
establish  a  through  route  and  joint  rates  to  the  Pacific  where 
one  through  route  existed  available  for  the  public.^ 

While  the  commission  has  authority  to  condemn  unjust  and 
unreasonable  rates  and  fix  reasonable  rates,  it  has  no  right  to 
make  a  change  in  the  rates  for  the  purpose  of  protecting  cer- 
tain interests  or  encouraging  certain  industries  where  the  rates 
were  reasonable  in  themselves.  The  court,  therefore,  will  re- 
view the  orders  of  the  commission  not  only  on  the  constitutional 
ground  that  changes  may  be  confiscatory,  but  on  the  further 
ground  that  the  commission  is  not  acting  within  its  lawful  juris- 
diction.- 

With  its  power  thus  enlarged  by  statute  as  well  as  by  judi- 
cial construction  the  Interstate  Commerce  Commission  is  a 
unique  illustration  of  an  administrative  board  invested  with  the 
different  powers  of  government.-^     As  an  administrative  body 


judicial  power,  usurp  merely  ad- 
ministrative functions  by  setting 
aside  a  lawful  administrative 
order  upon  our  conception  as  to 
whether  the  administrative  power 
has  been  wisely  exercised. 

"Power  to  make  the  order,  and 
not  the  mere  expediency  or  wis- 
dom of  having  made  it,  is  the 
question." 

1  Interstate  Commerce  Commis- 
sion V.  Northern  Pacific  R.  R.,  216 

•U.  S.  538,  54  L.  Ed.  608  (1910), 
affirming  the  circuit  court  in  re- 
straining the  enforcement  of  the 
order  of  the  Interstate  Commerce 
Commission,  16  Inters.  Com.  Rep. 
For  amendment  of  statute,  follow- 
ing this  decision,  see  Part  II,  sec- 
tion 15. 

2  Souithern   P.   Co.   v.    Interstate 


Commerce  Com.,  219  U.  S.  433,  55 
L.  Ed.  (Feb.  20,  1911),  revers- 
ing 177  Fed.  963. 

3  From  Opinion  of  Commission 
in  the  "Investigation  of  advances 
in  Rates  by  Western  Trunk  Lines, 
20  I.  C.  C.  R.  9   (Feb.  22nd,  1911). 

"By  its  decisions  in  the  Abeline 
Cotton  Oil  case,  the  Illinois  Cen- 
tral case,  the  supreme  court  has 
erected  this  commission  into  what 
has  been  termed  "an  economic 
court,"  or  to  give  it  a  more  com- 
monplace definition,  but  one  of 
perhaps  of  stricter  legal  analogy, 
a  select  jury  to  pass  upon  the 
reasonableness  and  justness  of 
railroad  rates,  rules  and  practices. 
Within  broad  lines  of  discretion 
the  courts  regard  the  conclusions 
of  the  commission  on  question  of 


§    53 j         FEDEH.\I>    Hi:(JlLATION    OF    JxVTERSTATE    COMMERCE.  So 

it  enforces  the  executive  power  of  investigation  and  prosecu- 
tion. As  a  ^'KOi'^i- judicial  body  it  exercises  the  judicial  function 
of  determining  the  reasonableness  of  existing  rates  and  of  sus- 
pending ])roposed  increases  of  rate  pending  investigation,  and 
also  of  declaring  the  existence  of  undue  discrimination  or  pref- 
erence, entitling  tiie  complainant  to  reparation;  and  its  find- 
ings in  awards  of  damages  for  reparation  are  given  prima  facie 
weight  in  any  judicial  proceeding  to  enforce  the  same.  It  also 
exercises  Avhat  has  been  repeatedly  adjudged  to  be  essentially 
a  legislative  i)ower  in  fixing  a  niaxinnnn  of  i-ates  for  the  future.' 
This  department  of  administration  is  in  effect  a  distinct  de- 
partment of  government  recognized  as  developed  ex  necessi- 
tate from  the  complexity  of  the  functions  of  modern  govern- 
ment in  regulating  the  details  of  commercial  intercourse.  "We 
are  thus  compelled  to  revise  our  time  honored  conception  of  the 
distribution  of  the  powers  of  government,  as  we  have  not  only 
executive,  legislative,  and  judicial  departments,  but  also  the 
department  of  administration,  distinct  from,  and  yet  to  a  de- 
gree exercising  the  functions,  which  have  been  deemed  appro- 
priate to  each  of  the  others.- 

§  53.  The  commerce  court. — Another  important  feature  of 
the  amendator}'  acts  of  1910,  was  the  organization  of  a  com- 
merce court,  composed  of  five  circuit  judges,  who  are  given  ex- 
clusive jurisdiction  over  cases  for  the  enforcement  of  orders  of 

fact  as  final.  There  is  an  appeal  -  There  is  a  blending  of  the  ju- 
upon  questions  of  law  by  the  car-  dioal  legislative  and  adminis- 
.riers  to  the  courts,  but  unless  a  trative  powers  in  the  powers  of 
constitutional  guaranty  is  violated  railroad  commissioners  in  several 
the  order  of  this  commission  is  of  the  states.  The  constitutional- 
final,  provided,  of  course,  the  com-  ity  of  such  acts  has  been  sustained 
mission  does  not  overstep  the  ju-  both  in  the  state  and  federal 
risdictional  limits  placed  upon  it  courts.  See  Express  Co.  v.  Rail- 
by  the  statutes.  And  as  to  the  road  Co.,  Ill  N.  C.  463;  Burling- 
shipper  this  tribunal  is  his  one  and  ton,  etc.  R.  Co.  v.  Dey,  82  Iowa, 
only  resort  against  injustice."  See  312;  Chicago,  etc.  R.  Co.  v.  Jones, 
also  part  II,  sec.  IG  of  Interstate  149  111.  361;  Georgia,  etc.  R.  Co.  v. 
Commerce  Act,  infra.  Smith,  70  Ga.  694.  See  also  the 
1  See  Maximum  Rate  Cases,  167  Railroad  Commission  Cases,  116 
V.  S.  505,  42  L.  Ed.  255.  Also  the  U.  S.  307,  29  L.  Ed.  636,  and  infra, 
Virginia  Rate  Cases.  211  U.  S.  210,  §  106. 
53  L.  Ed.  150   (190S). 


S6  FEDER.VL    REGULATION   OF   INTERSTATE    COMMERCE.        [§54 

the  Interstate  Commerce  Commission  other  than  for  the  payment 
of  money,  and  over  eases  brought  to  enjoin  any  order  of  the 
Interstate  Commerce  Commission  or  the  so-called  "Expedition 
Cases"  and  also  mandamus  cases  under  the  Interstate  Com- 
merce Act.  This  latter  class  of  cases  however  was  very  much 
reduced  in  importance  by  the  recent  decisions  of  the  supreme 
court  (See  Appendix),  and  the  decisions  of  this  commerce 
court,  both  as  to  the  interlocutory  orders  and  final  judg- 
ments are  subject  to  appeal  to  the  supreme  court  of  the  United 
States. 

It  was  at  first  proposed  that  the  jurisdiction  of  this  court 
should  include  the  judicial  or  quasi-judicial  jurisdiction  which 
is  now  exercised  by  the  Interstate  Commerce  Commission,  thus 
relieving  that  body  of  the  anomaly  of  being  at  the  same  time  an 
investigator,  prosecutor  and  judge.  This  plan  was  abandoned, 
and  the  jurisdiction  of  the  court  is  taken  not  from  the  com- 
mission, but  from  the  circuit  courts  of  the  United  States,  and 
whatever  relief  is  afforded  by  the  court  will  be  to  the  other 
circuit  courts,  and  not  to  the  commission.^ 

§  54  (49).  Regulation  of  bridges  and  ferries  over  navigable 
rivers. — The  broadened  conception  of  the  federal  power  over 
interstate  commerce  in  this  direct  regulation  of  such  commerce 
is  illustrated  in  the  rulings  of  the  supreme  court  with  refer- 
ence to  the  building  of  bridges  and  establishment  of  ferries 

1  For  the  early  opinion  of  this  ation  of  reasonableness  see  infra 
court  on  its  jurisdiction  under  the  §  185;  188  Fed.  242.  And  as  to 
act  as  to  the  parties  entitled  to  right  of  railroads  to  exact  demur- 
appear  and  holding  that  the  right  rage  on  private  cars,  see  infra, 
to  resort  to  the  court  extended  to  §  255. 

every  one  injuriously  affected  by  President  Taft  in  an  address  be- 

the  order  of  the  commission,  see  fore  the  American  Bar  Association 

infra,  §  395;   188  Fed.  221.  (August    31st,    1911)     said    with 

As  to  the   distinction   made  by  reference   to   the   agitation   for   a 

the  commerce  court  between  plant  separate  court  of  patent  appeals, 

facilities  and  terminal  facilities  of  that  it  had  been  suggested  that  the 

railroads  for  which  they  are  en-  commerce  court  might  find  itself 

titled  to  exact  compensation,   see  without  sufficient  business   to   oc- 

infra,  §  150.  cupy  its  time,  and  that  the  juris- 

For    the    consideration    by    the  diction   of  the   proposed   court  of 

commerce    court    of    the    interde-  patent  appeals  might  be  vested  in 

pendence  of  rates  in  the  determin-  that  tribunal. 


§    5-i]        FEDERiUj   REGULATION    OP   INTERSTATE    COMMERCE.  87 

over  navigable  rivers,  as  also  in  the  exercise  of  the  legislative 
power  in  authorizing  improvements,  alterations  and  obstruc- 
tions in  public  navigable  waters.  The  power  of  the  state  to 
establish  bridges  over  navigable  and  tide  waters  was  admitted, 
subject  however  to  the  paramount  authority  of  congress  to 
declare  a  bridge  an  obstruction  to  navigation,  the  paramount 
authority  of  regulating  bridges  that  affect  the  navigation  of 
the  navigable  waters  of  the  United  States  being  admittedly  in 
congress.^  Thus  in  the  case  cited  the  "Wheeling  bridge  con- 
structed across  the  Ohio  river  under  an  act  of  Virginia  had 
by  decree  of  the  supreme  court  at  the  suit  of  the  state  of  Penn- 
sylvania been  declared  in  its  then  condition  an  unlawful  ob- 
struction of  the  navigation  of  the  river  and  in  conflict  with, 
the  acts  of  congress  regulating  .such  navigation,  and  therefore 
ordered  to  be  elevated  or  abated.  Congress  thereupon  passed 
an  act  declaring  the  bridge  to  be  a  lawful  structure  in  its  then 
condition  and  elevation,  and  this  act  was  sustained  as  giving 
full  authority  to  maintain  the  bridge.  The  practice  thereupon 
grew  up  of  building  bridges  by  state  corporations — where  the 
rivers  constituted  the  boundary  of  states,  securing  the  concur- 
rent action  of  both  states, — and  at  the  same  time  obtaining  an 
act  of  congress  that  the  bridge,  when  constructed  according 
to  its  provisions,  should  be  a  lawful  structure  and  not  an  ob- 
struction to  navigation. 

In  1894  however  it  v;as  held^  that  congress  had  full  author- 
ity to  incorporate  a  bridge  company  for  the  construction  of 
a  bridge  across  a  navigable  river,  and  sustained  the  validity  of 
the  North  River  Bridge  Company  for  the  construction  of  a 
bridge  across  the  Hudson  river  between  the  states  of  New  York 
and  New  Jersey.  The  court  said  that  it  was  not  necessary  for 
congress  to  recognize  and  approve  bridges  erected  by  author- 
ity of  two  states  across  navigable  waters  betAveen  them,  but 
could,  at  its  discretion,  use  its  sovereign  power,  directly  or 
through  a  corporation  created  for  that  object,  to  construct 
bridges  for  the  acconnnodation  of  interstate  traffic  by  land,^  as 
it  undoubtedly  may  do  to  improve  the  navigation  of  rivers  for 

1  Pennsylvania  v.  Wheeling,  etc,  Co.,  1.^3  V.  S.  525  (1S94).  38  L.  Ed. 

Bridge  Co.,  18  How.  421  (1855),  15  SOS. 

L.  Ed.  435.  ■  Willamette      Bridge      Co.      v. 

2Luxton  v.  North  River  Bridge  Hatch,  125  U.  S.  1    (1S8S),  31  L. 


b^S  FEDERAL    REGULATION   OF   INTERSTATE    COMMERCE.        [§    5-4 

the  couveiiience  of  such  traffic  by  water.  In  the  case  of  this 
North  River  Bridge  Company  the  act  made  provision  for  the 
condemnation  of  lands,  for  the  construction  and  maintenance 
of  the  bridge  and  its  approaches,  and  for  just  compensation  to 
the  owners. 

In  the  case  of  ferries  there  is  no  such  necessity  of  securing 
the  sanction  of  congress,  as  there  is  no  such  obstruction  to 
navigation.^  Bat  ferries  as  well  as  bridges  are  instrumentali- 
ties of  interstate  commerce  when  they  cross  rivers  which  are 
the  boundaries  of  states,  and  as  such  are  exempt  from  state 
control.- 

In  a  recent  case^  the  court  held  tliat  an  unconstitutional 
burden  was  imposed  on  interstate  commerce  by  an  Illinois 
statute  penalizing  the  carrying  on  of  a  ferry  without  a  license, 
when  applied  to  the  transportation  of  loaded  or  unloaded  rail- 
road cars  across  the  Mississippi  river  from  the  Illinois  to  the 
Missouri  side.  The  court  said  that  there  was  an  essential  dis- 
tinction between  a  ferry  in  the  restricted  and  legal  sense  of 
the  term,  and  the  transportation  of  railroad  cars  across  a  boun- 
dary river  between  two  states,  constituting  interstate  commerce, 
and  that  such  transportation  could  not  be  subjected  to  bur- 
dens imposed  by  a  state,  which  were  direct  burdens  upon  in- 
terstate commerce.  In  this  case  the  power  to  grant  the  license 
was  made  discretionary ;  citizens  of  Illinois  were  to  be  preferred 
and  the  licensee  could  be  required  to  conduct  a  general 
ferry  business.  The  court  therefore  found  it  unnecessary  to 
consider,  whether  the  broad  declarations  of  the  power  of  the 
state  to  regulate  ferries  over  navigable  rivers  constituting 
boundaries  between  states,  supported  in  the  earlier  cases  had 
not  been  modified  by  the  rule  laid  down  in  the  Gloucester 
Ferry  case  *  and  the  Covington  Bridge  case. 

Ed.  629;    California  v.  Pacific  Ry.  Ferry  Co.  v.  Pennsylvania,  114  U. 

Co.,  127  U.  S.  1   (1888),  32  L.  Ed.  S.  196   (1885),  29  L.  Ed.  158. 

150.  3  St.  Clair  County  v.  Interstate 

1  Covington  &  Cincinnati  Bridge  Transfer  Co.,  192  U.  S.  454  (1904), 
Co.    V.    Kentucky,    154    U.    S.    204  48  L.  Ed.  518. 

(1899),  38  L.  Ed.  962.  4  Conway  v.  Taylor,  Executor,  1 

2  Covington,  etc.  Bridge  Co.  v.  Black,  603,  17  L.  Ed.  191  (1861); 
Kentucky,  154  U.  S.  204,  1.  c.  219,  Fanning  v.  Gregoire,  16  How.  524, 
38  L.  Ed.  962    (1899);    Gloucester  14  L.  Ed.  1043  (1853). 


§    55]        FEDERAL    REGULATION   OF    INTERSTATE    COMMERCE.  80 

§  55.  Regulation  of  telegraph  and  telephone  companies. — 
The  amendment  to  the  Interstate  Commerce  Act  of  ]I>10,  ex- 
tended for  the  first  time  the  regulation  of  the  act  to  interstate 
telegraph  and  telephone  companies.  Prior  to  this  it  had  heen 
recognized  in  a  number  of  cases  that  the  interstate  business  of 
such  comi)anies  Avas  interstate  commerce;  and  before  their  in- 
clusion under  tlie  Interstate  Commerce  Act  their  business  was 
controlled  by  the  rules  of  common  law  whicli  are  operative  upon 
all  intei'state  commercial  transactions,  except  as  they  were 
modified  by  congressional  enactment. 

Congress  has  legislated  from  time  to  time  in  relation  to  tele- 
graph lines  in  interstate  coinmeree,  but  more  particularly 
with  reference  to  the  grant  of  teh'graph  privileges  to  the  gov- 
ernment aided  railroads.  Thus,  in  1862,  congress  included  the 
right  to  construct,  maintain  and  operate  telegraph  lines  in  its 
grant  of  the  charters  to  build  Pacific  railroads. 

Subsequently,  in  1806/  congress  granted  to  any  telegraph 
company  organized  under  the  laws  of  anj^  state  the  right  to 
construct,  maintain  and  operate  lines  of  telegraph  through  and 
over  any  portion  of  the  public  domain  of  the  United  States, 
over  and  along  any  of  the  military  or  post  roads  of  the  United 
States  which  have  been  or  may  hereafter  be  declared  such  by 
law,  and  over,  along  and  across  any  of  the  navigable  waters 
of  the  United  States.- 

This  act  of  1800  was  construed  by  the  supreme  court ''  as.  in 
effect,  amounting  to  a  prohibition  of  all  state  monopolies  in 
the  telegraph  bu.siness  between  the  states.  The  court  said  that 
it  was  a  legitimate  regulation  of  commercial  intercourse  between 
the  states  and  was  proper  legislation  to  carry  into  execution 
the  powers  of  congress  over  the  postal  service.     The  statute 

1  3  Compiled  Statutes,  p.  3579,  praised  vahie  to  be  ascertained  by 
title  65.  five  competent,   disinterested   per- 

2  The  act  also  provided  for  the  sons,  two  of  whom  were  to  be  se- 
nse of  materials  from  the  public  lected  by  the  postmaster  general, 
lands,  reserved  to  the  government  two  by  the  company  interested  and 
priority  over  other  business  and  one  by  the  four  previously  se- 
further  provided  for  the  purchase  lected. 

hy  the   United    States   for  postal.  3  Pensacola     Telegraph     Co.     v. 

military  or  other  purposes,  all  the  Western  Union  Telegraph  Co.,  96 

property  and  effects  of  companies  U.  S.  1  (1877),  24  L.  Ed.  708,  711. 
acting    under    the    act    at    an    ap- 


90  FEDER.\L   REGULATION   OF   INTERSTATE   COMMERCE.        [§    DO 

did  not  extend  only  to  such  military  and  post  roads  as  were 
upon  the  public  domain.  The  state  law  of  Florida  conferring- 
exclusive  privileges  upon  a  state  telegraph  company  was  de- 
clared to  be  in  conflict  with  the  legislation  of  congress. 

This  act  of  1866  was  permissive  only.  The  privilege  con- 
ferred carried  with  it  no  exemption  from  the  ordinary  burdens 
of  taxation  in  a  state  where  the  companies  owned  or  operated 
lines  to  telegraph/  nor  did  it  carry  with  it  any  unrestricted 
right  to  appropriate  public  property  of  a  state  or  city,  but  it 
was  like  any  other  franchise,  to  be  exercised  in  subordination 
to  public  as  well  as  private  rights.^ 

The  act  of  1866  does  not  grant  to  telegraph  companies  ac- 
cepting its  provisions  the  power  of  eminent  domain  over  the 
private  property  of  railroad  companies.  A  railroad  right  of 
way  is  not  public  property  though  often  called  a  highway  and 
subject  to  a  certain  extent  to  state  and  federal  control.  A  tele- 
graph company  cannot,  therefore,  under  the  act  of  1866,  occupy 
a  railroad  right  of  way  except  by  the  consent  of  the  railroad 
or  under  the  power  of  eminent  domain ;  and  in  the  absence  of 
federal  or  state  provision  for  the  exercise  of  such  right  of  emi- 
nent domain,  the  railroad  right  of  way  can  be  occupied  with 
telegraph  poles  only  with  the  consent  of  the  railroad  com- 
any.^ 

The  Interstate  Commerce  Commission  is  vested  with  juris- 
diction over  the  government-aided  telegraph  lines  constructed 
under  the  Pacific  Eailroad  Act  by  the  act  of  1888,*  whereunder 
the  commission  is  required  to  ascertain  the  facts  and  deter- 
mine and  order  what  arrangement  should  be  made  for  the  in- 
terchange of  business  required  by  the  act,  and  it  was  made  the 
duty  of  the  railroad  and  telegraph  companies  to  file  with  the 
Interstate  Commerce  Commission  all  contracts  relating  to  the 
control  and  use  of  their  telegraph  lines  and  to  file  annual  re- 
ports with  the  commission  as  to  their  condition  and  business. 

1  Western  Union  Tel.  Co.  v.  Ann  Arbor  R.  R.  Co.,  178  U.  S.  239, 
Massachusetts,     125     U,      S.     530       44  L.  Ed.  1052   (1900). 

(1888),  31  L.  Ed.  790.  8  Western    Union     Tel.     Co.    v. 

2  St.  Louis  V.  Western  Union  Pennsylvania  R.  Co.,  195  U.  S. 
Tel.  Co.,  148  U.  S.  92  (1893),  37  L,       540,  594,  49  L.  Ed.  312,  332. 

Ed.  380;  Western  Union  Tel.  Co.  v.  4  Act  of  Aug.   7,  1888,  25   Stat. 

L.  382. 


§    56]        FEDERAL    KEGULATJON    OF   INTERSTATE    COMMERCE.  91 

The  supreme  court,  construing  this  act,  held  that  it  was  a  law- 
ful exercise  of  the  powers  of  congi-ess  and  that  a  contract  be- 
tween the  Union  Pacific  Railway  and  the  "Western  Union  Tele- 
graph Company,  giving  the  latter  company  control  of  all  tele- 
graph business  on  its  roads,  was  void.  The  act  in  this  case  re- 
quired that  the  railroads  should  exercise  by  themselves  alone 
all  the  telegraph  franchises  conferred  upon  them,  and  to  allow 
equal  facilities  to  connecting  lines  on  terms  just  and  equitable ; 
the  right  of  connection  with  equal  facilities  being  given  to  any 
railroad  which  had  accepted  the  provisions  of  the  act  of  1806.^ 
The  provisions  of  the  Telegraph  Act  of  July  24,  1866,  did 
not  apply  to  interstate  telephone  companies  whose  business  is 
that  of  transmitting  articulate  speech  between  different 
points.^  as  it  was  held  by  the  supreme  court  that  in  1866  noth- 
ing was  knoAvn  of  the  telephone ;  and  when  therefore  the  act 
of  1866  spoke  of  telegraph  companies,  it  only  meant  such  com- 
panies as  employed  the  means  thus  used  or  embraced  by  then 
existing  inventions  for  transmitting  by  sounds  or  by  signs  in 
writing. 

§  56  (52).  The  release  of  the  federal  regulating  power.— In- 
terstate commerce  may  be  regulated  not  only  by  the  action  of 
congress,  but  also  by  its  inaction,  as  where  the  subjects  require 
uniform  regulation,  the  inaction  is  equivalent  to  a  declaration 
that  the  commerce  must  be  free.  There  is  also  a  form  of  reg- 
ulation, already  referred  to,  where  congress  divests  particular 
subjects  of  their  commercial  character,  thus  subjecting  them, 
when  delivered  to  their  consignees  in  the  original  packages, 
to  the  police  power  of  the  state.     It  was  contend  in  the  Rahrer 

1  See  also  United  States  v.  ployes  of  the  telegraph  company  in 
Northern  Pac.  R.  Co.,  120  Fed.  ronstrupting  and  maintaining  the 
.■540  (190?>),  where  the  circuit  court  line,  free  of  charge.  This  case 
held  that  a  contract  of  the  North-  was  therefore  distinguished  from 
ern  Pacific  R.  Co.  with  the  West-  the  Union  Pacific  case, 
ern  Union  Telegraph  Company  2  Richmond  v.  Southern  Bell 
was  not  violative  of  the  act,  as  it  Telegraph  &  Telephone  Co.,  174  U. 
provided  for  the  exclusive  use  of  S.  761,  43  L.  Ed.  11G2  (1S99),  re- 
one  or  two  wires  hy  the  railroad  versing  the  circuit  court,  78  Fed. 
company,  for  which  the  railroad  8.58.  and  the  circuit  court  of  ap- 
company  agreed  to  pay  one-third  pfals,  85  Fed.  19,  and  28  C.  C.  A. 
the  cost  of  construction  and  to  659. 
transport    the    property    and    em- 


92  FEDERAL   REGULATION   OF   INTERSTATE    COMMERCE.        [§57 

Case  ^  that  the  Wilson  Act  of  1890  was  void,  as  the  power  of 
regulation  vested  in  congress  could  not  be  delegated  to  the 
.states.  The  court  held  that  this  was  not  a  delegation  of  the 
federal  power,  but  was  merely  a  designation  that  certain 
subjects  of  interstate  commerce  should  be  governed  by  a  rule 
which  divested  them  of  that  character  at  an  earlier  period 
of  time  than  would  otherwise  be  the  case.  Congress,  said 
the  court,  did  not  use  terms  of  permission  to  the  states  to  act, 
but  simply  removed  an  impediment  to  the  enforcement  of  the 
state  laws  created  by  an  absence  of  specific  utterance  on  its 
part  in  respect  to  imported  packages  in  their  original  condition. 
It  imparted  no  power  to  the  state  not  then  possessed,  but  al- 
lowed imported  property  to  fall  at  once  upon  arrival  within  the 
local  jurisdiction. 

In  the  later  Iowa  case,-  in  1898,  the  court,  in  holding 
that  the  term  "arrival"  meant  delivery  to  the  consignee,  said 
that  the  act  of  1890  was  not  to  be  construed  as  authorizing 
states  or  state  laws  to  forbid  the  bringing  into  the  state  at  all. 
In  other  words,  the  power  of  the  state  did  not  attach  to  the 
acts  until  the  termination  of  the  interstate  commerce  ship- 
ment, and  that  did  not  occur  until  the  actual  delivery  of  the 
shipment  to  the  consignee.  The  court  said  this  construction 
of  the  act  of  1890  rendered  it  unnecessary  to  consider  whether, 
if  the  act  of  congress  had  submitted  the  right  to  make  inter- 
state commerce  shipments  to  state  control,  it  would  be  repug- 
nant to  the  constitution. 

The  right  of  congress  therefore  as  adjudged  in  these  cases 
to  surrender  its  regulating  powder  only  extends  to  the  limita- 
tion of  the  original  package  rule  as  to  a  certain  class  of  com- 
modities, so  that  they  should  lose  their  interstate  character 
and  become  subject  to  the  police  power  of  the  state  when  de- 
livered to  the  consignee,  and  not  ^vhen,  as  is  the  case  with 
other  shipments,  the  original  package  is  broken  up  or  sold  and 
thus  becomes  merged  in  the  general  mass  of  property  in  the 
state, 

§  57  (53) .  Regulation  by  the  delegation  of  power. — Congress 
in  its  legislation  upon  interstate  commerce  has  vested  in  the 

1  Supra,  §  18.  2  Rhodes  v.  Iowa,  supra,  page  31. 


§    57]        FEDERAL    REGULATION    OP    INTERSTATE    COMMERCE.  93 

Interstate  Comiiieree  Commission  certaiji  discrclioiiary  power 
in  the  enforcement  of  the  statutes.  Tims,  in  the  Interstate 
Commerce  Act,  in  section  4,  the  commission  is  authorized  in 
special  cases,  after  investigation,  to  grant  an  exemption  to  the 
carriers  from  the  requirement  of  tlie  section,  tliat  no  greater 
rate  shall  be  charged  under  substantially  similar  circumstances 
and  conditions  for  a  shorter  than  for  a  longer  distance  over 
the  same  line,  and  the  commission  is  authorized  from  time  to 
time  to  prescribe  the  extent  to  which  such  carrier  may  be  re- 
lieved from  the  operation  of  said  statute.  Also  in  the  so- 
called  Safety  Appliance  Act,  the  commission  is,  under  section  7, 
authorized  to  grant  an  extension  of  time  within  which  the 
common  carrier  may  comply  with  the  requirement  of  equip- 
ment with  automatic  car  couplings  prescribed  by  the  act. 

Under  the  act  of  IMarch  3,  1899,  concerning  the  construction 
of  bridges  over  navigable  rivers,  the  secretary  of  war  is  not 
only  vested  with  the  duty  of  approving  plans  for  the  construc- 
tion of  bridges,  but  is,  under  section  11,  given  the  power  to 
establish  harbor  lines,  and  under  section  3  to  permit  in  his  dis- 
cretion temporary  deposits  in  the  rivers. 

These  cases  seem  to  be  within  the  rule  declared  by  the  su- 
preme court  '  in  sustaining  the  i)owers  conferred  upon  the  pres- 
ident by  section  3  of  tlie  act  of  1890  to  suspend  by  proclama- 
tion the  free  introduction  of  certain  articles  when  satisfied 
that  the  country  producing  them  imposes  duties  upon  the 
products  of  the  United  States.  The  court  said  this  was  not  a 
delegation  of  legislative  power,  but  merely  made  the  president 
the  agent  of  the  law-making  department  to  ascertain  and  de- 
clare the  event  upon  which  its  expressed  will  was  to  take 
effect.  He  had  no  discretion  in  the  premises  except  in  respect 
to  the  duration  of  the  suspension  order,  and  that  related  only 
to  the  enforcement  of  the  policy  established  by  congress. 

There  is  no  unconstitutional  delegation  of  legislative  and 
judicial  poAver  in  the  authorization  of  the  secretary  of  war, 
under  the  River  and  Harbor  Act  of  March  3,  1899,  to  require, 
after  a   hearing,   such   changes  or  alterations  in    a   bridge   as 

1  Field   v.   Clark.   143   U.   S.   649  general    subject    of    delegation    of 

(1892),   36   L.   Ed.   294.     See   also  legislative  power,  see  State  v.  At- 

Butfield   v.    Stranahan,    192    U.    S.  lantic  Coast  Line,  56  Fla.  617  32 

470     (1904),    48    L.    Ed.    525.      On  L.  R.  A.   (N.  S.)   639   (1908). 


94:  FEDER.VL    REGULATION   OP   INTERSTATE    COMMERCE.        [§    58 

would  render  navigation  reasonably  free  and  unobstructed, 
when  he  was  bound  to  give  a  hearing  to  the  parties  before  tak- 
ing action,  and  there  was  in  this  proceeding  no  taking  of  pri- 
vate property  for  public  use  without  compensation.^ 

A  legislative  body  may  delegate  to  an  executive  or  administra- 
tive officer  the  power  to  find  some  fact  or  situation  on  which 
the  operation  of  a  law  is  conditioned,  or  to  make  and  enforce 
regulations  for  the  execution  of  a  statute  according  to  its  terms, 
but  it  cannot  delegate  its  law-making  power,  its  power  to  ex- 
ercise the  indispensable  discretion  to  make,  to  add  to,  to  take 
from,  or  to  modify  the  law.  It  was  therefore  held  that  con- 
gress did  not  in  fact  delegate,  and  could  not  delegate  to  the 
secretary  of  agriculture  or  to  any  other  executive  officer,  the 
power  to  add  to  the  class  of  railroad  companies,  or  to  the  acts 
punishable  under  a  penal  statute,  such  others  as  in  his  judg- 
ment ought  to  be  punished  thereunder,^ 

§  58  (54).  Additional  acts  of  congress  in  the  regulation  of 
commerce. — Congress  in  recent  years  has  enacted  several  laws 
in  the  regulation  of  interstate  commerce.  The  act  establish- 
ing a  Bureau  of  Animal  Industry,  for  preventing  the  ex- 
portation of  diseased  cattle,  and  for  the  extirpation  of  dis- 
ease among  domestic  animals,  enacted  May  29,  1884,  was  held 
by  the  supreme  court  •*  not  to  cover  the  subject  of  transporta- 
tion of  live  stock  from  state  to  state,  so  as  to  preclude  the  en- 
actment of  state  legislation  for  the  protection  of  the  property 
of  the  state. 

Congress  in  recent  years  has  passed  a  number  of  acts  pri- 
marily for  the  promotion  of  the  safety  of  employes  and  thus 
for  the  safety  of  travelers  on  interstate  railroads.^     Thus,  it 

1  Monongahela  Bridge  Co.  r.  U.  make    certain    alterations,    signed 

S.,    216  U.    S.   177,   54   L.   Ed.   435  by  the  assistant  secretary  of  war, 

(1910).  In  Hannibal  Bridge  Co.  v.  and  showing  that  it  came  from  the 

U.  S.,  220  U.  S.  ,  55  L.  Ed. War    Department,    was    sufficient 

(1911),    the    court    held    that    la  notice  under  the  act. 

bridge  over  the  Mississippi  river,  2  Merchants'  Bridge  T.  Ry.  Co. 

constructed     under    authority    of  v.  United  States,  C.  C.  A.  8th  Cir- 

special  act  of  congress,  was  sub-  cuit,   188  Fed.  191   (1911). 

ject  to   the  authority  of  the   sec-  s  Reid  v.  Colonado,  supra,  §  35. 

retary     of     war     under     Act     of  4  The       Interstate       Commerce 

March    3,    1899;    and    that    a    no-  Commission   in   its  annual   report 

tice    to    the    bridge    company    to  for   1904   discusses  at  length   the 


§    58]        FEDERAL   REGULATION   OF   INTERSTATE    COMMERCE.  95 

has  required  railroads  to  equip  tlieir  cars  with  automatic 
couplers  and  brakes,  imposing  an  absolute  duty  and  liability  in 
that  regard.  It  has  required  locomotives  to  be  equipped  with 
ashpans  which  can  be  erai)tied  or  cleaned  without  the  neces- 
sity of  an  employe  going  under  the  locomotive.     See  Appendix. 

Congress  has  also  legislated  in  regard  to  the  liability  of  in- 
terstate railroads  to  their  employes.  The  first  act,  approved 
June,  11,  1906,  having  been  adjudged  invalid,  in  that  it  did 
not  limit  the  recovery  to  employes  engaged  in  interstate  com- 
merce/ another  act  was  passed  in  1908  to  cure  this  defect. - 

An  act  has  also  been  passed '  limiting  the  hours  of  service 
of  trainmen,  and  telephone  and  telegraph  operators  in  inter- 
state service,  and  congress  has  also  (1911)  ordered  an  investi- 
gation by  a  commission  of  the  question  of  substituting  the  rule 
of  compensation  in  place  of  a  liability  for  negligence  where 
employes  are  injured  in  interstate  railroad  service. 

Congress  has  also  required  railroads  engaged  in  interstate 
commerce  to  make  full  reports  of  all  accidents  to  the  Inter- 
state Commerce  Commission.*  This  requirement  is  not  lim- 
ited to  accidents  on  trains  engaged  in  interstate  commerce, 
but  includes  all  accidents  on  the  railroads  engaged  in  inter- 
state commerce ;  and  a  railroad  is  so  engaged  within  the  reg- 
ulating power  of  congress  when  it  makes  shipments  by  through 
routing  in  interstate  commerce.  This  act  has  not  been  con- 
strued. 

Recent  legislation  by  congress  in  the  regulation  of  interstate 
commerce  includes  the  prohibition  of  interstate  carriage  of 
obscene  literature,''  or  game  killed  in  violation  of  state  laws,' 

subject  of  the  increasing  number  between  master  and  servant  in  the 

of  railroad  accidents  and  strongly  railroad  service, 

recommends    legislation    by    con-  2  See  Act  of  April  22,  1908,  U. 

gress  requiring  the  adoption  of  the  S.  Compiled  Stat.  1901,  1909  Supp. 

block  system  and  the  block  signal.  p.  1171,  and  Act  of  April  5,  1910, 

1  See  Howard  v.  111.  Cent.  R.  R.  See  injra,  §  527  et  seq. 

Co.,  207  U.  S.  463,  52  L.  Ed.   297  s  See  infra,  p.  . 

(1907),    Justices    Moody,    Harlan,  4  Act  of  March  3,  1901,  infra. 

and  Holmes  dissenting.     Three  of  6  Act    of    February    8,    1897,    3 

the  justices,  Peckham,  Fuller,  and  §   540. 

Brewer,  did  not  concur  In  holding  8  Act  of  May  2.t.  1900,  3  Comp. 

that  congress  had  power  to  legis-  Comp.  Stat  3180  §  181. 

late  on  the  subject  of  the  relation 


96  FEDERAL    REGUI-ATION    OF   INTERSTATE    COMMERCE.         [§    58 

condemned  carcasses  of  animals,^  lottery  tickets,-  dairy  prod- 
ucts falsely  labeled  or  branded  as  to  the  state  or  territory  in 
Avhicli  produced,"  and  also  what  is  known  as  the  AVhite  Slave 
Act/  the  transfer  of  women  for  immoral  purposes  from  state 
to  state. 

Congress  has  also  empowered  the  secretary  of  agriculture  to 
establish  rules  concerning  exportation  and  transportation  of 
live  stock  and  issue  certificate  of  freedom  from  disease,  and 
providing  for  admission  of  cattle  so  certified  into  any  state 
without  further  inspection  or  fees.^ 

The  police  power  of  the  state  was  extended  to  oleomargar- 
ine, butteriue,  etc.,  as  it  had  theretofore  been  extended  to  liq- 
uors in  the  "original  package."  ' 

As  to  the  anti-trust  legislation  of  congress  and  also  legisla- 
tion in  relation  to  the  relations  of  labor  and  cajDital  in  inter- 
state commerce,  see  chapter  V,  infra,  "Business  Combinations 
in  Interstate  Commerce"  and  chapter  VI  "Labor  Combinations 
in  Interstate  Commerce." 

Congress  has  also  legislated  extensively  in  regard  to  trans- 
portation by  water  in  the  navigation  acts.  The  Interstate 
Commerce  Act  only  regulates  water  transportation,  when  the 
transportation  is  partly  by  railroad  and  partly  by  water  under 
a  common  control  or  management. 

In  1906  important  statutes  w'ere  enacted,  to-wit  the  Meat  In- 
spection Act '  the  Food  and  Drugs  Act  ^  and  the  National 
Quarantine  Laws,^  all  illustrating:  the  trend  for  the  enlarge- 
ment of  federal  power  through  its  extension  to  classes  of  sub- 
jects, wherein  the  states  have  hitherto  exercised  concurrent  ju- 
risdiction during  the  non-action  of  congress.  Of  these  the  most 
important  is  the  Food  and  Drugs  Act,  commonly  known  as  the 
Pure  Food  Act,  approved  June  30th,  1906.  This  act  makes  it  un- 

lAct  of  May   2,   1895,    3   Comp.  e  Act    of    May    9,     1902,     Supp. 

Stat.  3192.  Comp.  Stat.  p.  3C9. 

2  Sec.  6,  supra.  Act  of  March  3,  7  Act  of  June  30,  1906,  Supp. 
1895,  3   Comp.   Stat.   3178.  Comp.  Stat.  1106. 

3  Act  of  July  1,  1902,  Supp.  s  Act  of  June  30,  1906,  Supp. 
Comp.  Stat.,  p.  1182.  Comp.   Stat.   1106. 

4  Act  of  June  25,  1910.  See  » Act  of  June  19,  1906,  Supp. 
supra,  sec.  7.  Comp.  Stat.  1244. 

5  Act  of  February  2,  1903,  Supp. 
Comp.  Stat.,  p.  1183. 


§    50J         FEDEKAL    IIEGLI.ATJON    OF    INTERSTATE    COMMERCE.  97 

lawful  to  manufacture  within  any  territory  or  the  District  of 
Columbia  or  to  introduce  into  any  state  or  territory  or  District 
of  Columbia  from  any  otlier  state  or  territory  or  District  of 
Columbia  or  from  any  foreign  country  or  to  ship  to  any  foreign 
country,  any  article  of  food  or  drugs  which  is  adulterated  or 
misbranded,  within  the  meaning  of  the  act. 

§  59  (55).  The  department  of  commerce  and  labor. — In 
1903  congress  established  the  department  of  commerce  and  la- 
bor, the  secretary  at  the  head  being  made  one  of  the  executive 
officers  of  the  government  and  as  such  one  of  the  president's 
advisers  known  as  the  cabinet.^ 

This  department  included  several  of  the  bureaus  theretofore 
included  in  other  departments,  and  among  others  the  De- 
partment of  Labor,  which  had  been  established  by  congress 
in  1888.= 

Section  5  of  this  act  establishes  a  Bureau  of  IVIanufactures, 
and  section  6  a  Bureau  of  Corporations,  which  is  vested  with 
the  same  power  and  authority  of  investigation  in  respect  to 
corporations  and  combinations  engaged  in  interstate  commerce 
as  is  conferred  on  the  Interstate  Commerce  Commission  in  re- 
spect to  railroads.  The  commissioner  of  corporations  is  given 
powers  of  investigation,  with  the  right  to  summon  Avitnesses 
and  call  for  the  production  of  boohs  and  papers,  subject  to  the 
same  immunities  against  the  enforcement  of  self-incriminating 
testimony,  as  is  contained  in  the  act  of  1893  concerning  the 
Interstate  Commerce  Act.^ 

This  act  includes  in  section  6,  as  subject  to  the  investigation 
of  the  commissioner  of  corporations,  corporations  engaged  in 
insurance.  It  has  been  adjudged,  supra,  §  8,  in  successive  opin- 
ions of  the  supreme  court,  that  insurance  is  not  commerce  in 
any  of  its  forms.* 

This  act  has  not  been  judicially  construed.      The   federal 

lAct     of     February     14,     1903,  194  U.  S.  25,  48  L.  Ed.  860  (1903); 

Supp.    Comp.    Stats.,    p.    87,    infra  infra,   §   351. 

§  494.  -t  The  Commissioner  of  Corpora- 

-  Infra,  §  495  et  scq.  ions  in  his  first  annual  report,  De- 

3  Interstate   Commerce  Commis-  cember  1904,  says  that  if  this  pur- 

sion  V.  Brimson,  154  U.  S.  447,  38  pose    is    irrevocably    settled,    the 

L.    Ed.    1047     (1894);     Interstate  powers  of  the  commissioner  rela- 

Commerce   Commission    v.    Baird,  live  thereto  are  of  purely  a  statis- 

7 


98 


FEDER.VL    REGULATION    OF    INTERSTATE    COMMERCE. 


[§   59 


government  has  obviously  no  visitorial  power  over  corpora- 
tions which  it  does  not  create,  and  tlie  power  of  the  com- 
missioner to  make  investigations  or  to  compel  reports  would 
be  clearly  limited  to  transactions  in  interstate  commerce,  to 
the  same  extent  as  the  powers  of  the  interstate  commerce  com- 
mission are  limited  to  transactions  in  interstate  as  distin- 
guished from  domestic  commerce. 

While  the  powers  of  the  Bureau  of  Corporations  are  de- 
scribed mainly  by  reference  to  those  contained  in  the  Inter- 
state Commerce  Act,  the  latter  is  a  quasi-judicial  body,  in  the 
sense  that  it  is  empowered  to  hear  complaints  and  make 
charges  and  findings  for  judicial  investigation  and  determina- 
tion, while  the  commissioner  of  corporations  is  at  the  head  of 
an  administrative  department  of  the  government.  The  pow- 
ers of  investigation  vested  in  this  bureau  are  to  be  used  for 
the  purpose  of  assisting  the  legislative  department  in  making 
laws,  and  the  executive  department  in  enforcing  them.  The 
commissioner  has  no  judicial  powers,  and  within  the  scope  of 
his  duties  must  appeal  to  the  courts  for  the  enforcement  of  his 
orders.^     The  statute  has  not  been  judicially   construed,   nor 


tical,  voluntarj',  non-compulsory 
nature.  He  suggests  however, 
that  in  view  of  the  rapid  develop- 
ment of  the  insurance  business,  its 
extent,  the  enormous  amount  of 
money  and  the  diversity  of  inter- 
ests involved  and  the  present  busi- 
ness methods,  that  under  existing 
conditions,  insurance  is  commerce 
and  may  be  subject  to  federal  reg- 
ulation through  affirmative  ac- 
tion by  congress. 

It  is  difficult  to  see,  however,  if 
the  supreme  court  adheres  to  its 
present  rulings,  how  the  jurisdic- 
tion of  congress  can  be  enlarged 
by  its  own  declarations  of  the  ex- 
tent of  its  powers. 

1  It  is  said  in  th  every  exhaust- 
ive first  annual  report  of  the  com- 
missioner, Hon.  James  R.  Garfield, 
"that  many  of  the  specific  powers 
of  the  Interstate  Commerce  Comr 


mission  are  clearly  inapplicable  to 
the  purpose  of  the  Bureau  of  Cor- 
porations. He  cannot  make  inves- 
tigations or  procure  and  enforce 
information  by  means  of  his  comr 
pulsory  powers  for  the  purpose  of 
enforcing  the  penal  provisions 
other  than  those  contained  in  the 
organic  act  of  the  bureau,  nor  can 
he  furnish  information  so  pro- 
cured to  private  individuals  for 
their  personal  use.  His  compul- 
sory investigatory  powers  are 
further  limited  by  the  rights  of 
privacy  of  the  citizen  which  may 
not  be  invaded  by  inquiry  except 
for  a  definite,  constitutional  and 
legal  object,  and  only  such  mat- 
ters may  be  investigated  as  relate 
to  and  give  information  upon  the 
objects  of  the  bureau  and  its 
work." 


50] 


FEDERAL   REGULATION    OF    LVT  ERST  ATE    C(JM  MERGE. 


99 


liiis  any  ai)])eal  been  made  to  the  coiii'ts  to  enforeo  its  powers 
oi'  investigation  by  compulsory  testimony  or  production  of 
books.  ^ 


1  Commissioner  Garfield  says  in 
bis  report  of  December,  1904,  "In 
brief,  the  policy  of  the  bureau  in 
the  accomplishment  of  the  pur- 
poses of  its  creation  is  to  co-oper- 
ate, and  not  antagonise,  the  busi- 
ness world.  The  immediate  object 
of  its  inquiries  is  the  suggestion 
of  constructive  legislation,  not  the 
institution  of  criminal  legislation. 
It  proposes  through  exhaustive  in- 
vestigations of  law  and  fact  to  se- 
cure conservative  action,  to  avoid 
ill  considered  attack  upon  corpora- 
tions which  will  avoid  unfair  and 


dishonest  practices.  Legitraate 
business  law  respecting  persona 
and  corporations  have  nothing  to 
fear  from  the  proposed  exercise  of 
this  governmental  power  of  in- 
quiry." It  was  held  in  U.  S.  v. 
Armour,  142  Fed.  808  (N.  D.  of  111.) 
1906,  that  the  immunity  under  act 
of  congress  extended  to  an  indi- 
vidual who  gave  self-incriminating 
statements  to  the  commissioner  of 
corporations  in  an  investigation 
under  this  section.  See  infra, 
section  12  of  Act.  See  also  Act  of 
June  13,  1906. 


CHAPTER  IV. 

THE  FEDERAL  POWER  OF  REGULATION  IN  INTERSTATE 
COMMERCE. 

§  60.     No  judicial  formulation  of  extent  of  power. 

61.  The  supremacy  of  federal  regulation. 

62.  Federal  regulation  of  employes  performing  both  intrastate  and 

interstate  service. 

03.  The  federal  regulating  power  and  state  corporations. 

64.  Limitations  upon  the  federal  authority  in  interstate  commerce. 

65.  Prohibition  as  a  means  of  regulation. 

66.  Regulation  of  commerce  through  the  taxing  power. 

67.  The  federal  power  of  granting  corporate  charters. 

68.  Federal  incorporation  as  a  means  in  the  exercise  of  the  com- 

merce power. 

69.  Relation  of  the  states  to  federal  corporations. 

70.  The  requirement  of  federal  franchise  for  business  corporations 

in  interstate  commerce. 

71.  The  development  of  the  latent  federal  power  in  the  regulation 

of  commerce. 

§  60.  No  judicial  formulation  of  extent  of  power. — The  ex- 
ercise of  the  federal  power,  as  new  conditions  develop  in  in- 
terstate and  foreign  commerce,  does  not  require  any  "new 
nationalism"  in  the  expansion  of  the  constitution  by  amend- 
ment or  judicial  construction.  Fortunately  the  framers  of 
the  constitution  wisely  stated  the  federal  power  in  language 
so  broad  and  comprehensive,  that  it  is  as  clearly  applicable  to 
the  complex  conditions  and  agencies  of  the  commerce  of  the 
present  day  as  was  the  simple  conditions  and  agencies  when 
the  constitution  was  adopted.^  The  constitution  of  the  United 
States  marks  only  the  great  outlines  of  power  to  be  possessed 
by  the  government  without  attempting  to  enumerate  in  de- 
tail and  specify  each  and  every  one.-  This  great  principle 
of  constitutional  law  is  happily  illustrated  in  the  simple  and 
comprehensive  phrase  of  the  commerce  clause. 

Until  recent  years  we  were  compelled  to  rely,  in  determin- 
ing the  possible  limits  of  the  federal  power  in  interstate  com- 
merce, upon  the  language  of  the  court  in  deciding  the  limits 
of  the  authority  of  the  states;  but  the  activity  of  fcdoral  legis- 
lation of  late  has  presented  directly  the  question  of  the  au- 
thority of  congress. 

1  See  U.  S.  V.  Debs,  Sec.  1,  supra.      Maryland,  4  Wheat.  316,  4  L.  Ed. 

2  Marshall,  C.  J.,  McCullough  v.      579. 


§    61]  FKDERAI.   POWER   OF    KEGLLATION.  101 

Tho  supreme  court  has  fre(]U('jilly  det-liiH'd  to  formulate  a 
general  rule  as  to  the  precise  line  where  the  power  of  con- 
gress begins  and  the  power  of  the  state  ends.^  It  was  on  this 
question  of  the  conflict  between  the  admitted  powers  of  the 
federal  government  and  the  states  that  Chief  Justice  Marshall 
said  that  the  power  and  the  restriction  on  it,  tliough  quite 
distinguishable,  when  they  did  not  approach  each  other,  may 
well,  like  the  intervening  colors  between  white  and  black,  ap- 
proach so  nearly  as  to  perplex  the  understanding,  as  colors 
perplex  the  vision  in  making  the  distinction  between  tliem.^ 

This  extent  of  the  federal  power  was  directly  presented  in 
the  Lottery  cases,  where  there  was  a  close  division  of  the 
court;  but  it  was  said  in  the  prevailing  opinion  that  the  whole 
subject  was  too  important,  and  the  question  suggested  by  its 
consideration  too  difficult  of  solution  to  justify  any  attempt 
to  lay  down  a  rule  for  determining  in  advance  what  legisla- 
tion could  be  enacted  under  the  commerce  clause  of  the  con- 
stitution.^ 

§  61.  The  supremacy  of  federal  regulation. — While  no  gen- 
eral judicial  rule  as  to  the  extent  of  the  federal  power  in  in- 
terstate commerce  has  been  formulated,  one  principle  has  been 
distinctly  declared  by  the  supreme  court,  and  that  is  the  su- 
premacy of  the  federal  power  over  state  legislation  where  ex- 
ercised as  appropriate  means  in  the  regulation  of  interstate 
commerce. 

This  supremacy  is  illustrated  when  congress  acts  in  that 
class  of  cases,  wherein  the  court  has  adjudged  that  the  state 
have  a  concurrent  power  of  legislation  in  the  non-action  of 
congress;  that  is,  where  congress  has  exercised  its  power  of 
regulation  by.  non-action.  There  is  thus  a  wide  legislative 
discretion  in  congress  to  determine  when  a  subject  is  capable 
of  uniform  legislation  in  interstate  commerce;  and  when  it  is 
.so  determined,  all  state  legislation  in  respect  to  such  matters, 
inconsistent  therewith,  ceases  to  have  force,  whether  formally 
abrogated  or  not,  and  the  regulations  prescribed  by  congress 
alone  control.  It  is  for  the  supreme  court  to  determine,  when 
a  question  arises,  as  to  whether  a  state  law  is  thus  abrogated 

1  Welton   V.   Missouri,   91   U.   S.  ~  Brown  v.  Maryland,  12  Wheat. 

275.  23  L.  Bd.  347  (1875);  Hall  v.  419.  G  L.  Ed.  67S  (1827). 

DeCuer,  95  U.  S.  485,  24  L.  Ed.  547  s  See  Lottery  Cases,  supra. 
<1876). 


102  FEDERAl,  POWER  OF  REGULATION.  [§  62 

by  the  exercise  of  tlie  power  by  congress.  The  power  thus 
exercised  by  the  states  will  in  this  way  be  suspended  until  the 
national  control  is  abolished  by  congress,  and  the  subject  is 
thereby,  by  the  non-action  of  congress,  again  left  under  the 
control  of  the  states.^ 

As  repeatedly  declared  by  the  supreme  court  the  power  to 
regulate  commerce  is  vested  in  congress  as  absolutely  as  it 
would  be  in  a  single  government,  and  is  limited  only  by  the 
constitution.-  The  paramount  authority  of  congress,  when  it 
legislates  in  interstate  commerce,  is  recognized  by  the  deci- 
sions of  the  state  courts  in  declaring  the  statutes  of  their  own 
states  abrogated  by  the  action  of  congress.^ 

§  62.  Federal  regulation  of  employes  performing  both  in- 
trastate and  interstate  service. — Congress  cannot,  as  was  de- 
termined in  the  first  Employers'  Liability  case,  legislate  di- 
rectly concerning  the  liability  of  railroads  to  their  employes, 
engaged  in  intrastate  traffic,  but  it  is  no  objection  to  legisla- 
tion enacted  for  the  protection  of  interstate  employes,  that 
such  employes  owing  to  the  conditions  of  railroad  service, 
also  rendered  service  in  intrastate  operations.  Thus,  it  was 
urged  against  the  constitutionality  of  the  Hours  of  Service 
Law  of  1907,  limiting  the  hours  of  service  of  interstate  em- 
ployes, that  the  interstate  and  the  intrastate  operations  of 
the  interstate  railroads  were  so  interwoven,  that  it  was  utterly 
impracticable  to  divide  their  employes  in  such  manner,  that 
the  duties  of  those,  who  are  engaged  in  connection  with  in- 
terstate commerce,  shall  be  confined  to  that  commerce  exclu- 
sively. But  the  supreme  court  said  *  that  congress  could  not 
be  thus  denied  the  effective  exercise  of  its  constitutional  au- 
thority. The  length  of  hours  of  service  of  railroad  employes 
had  a  direct  relation  to  the  efficiency  of  the  human  agencies, 
upon  which  protection  to  life  and  property  of  passengers  as 
well  as  employes  necessarily  depends.     If  then  it  is  assumed 

1  Reid  V.  Colorado,  187  U.  S.  137,  at  the  time  carrying  state  or  inter- 
47  L.  Ed.  108  (1902).  state  traffic.     See  infra,  §  508. 

2  Lottery  Cases,  supra.  This  3  See  supra,  §  35,  as  to  effect 
supremacy  of  the  Federal  power  of  Hours  of  Service  Act  in  Wi&- 
was  also  illustrated  in  the  deci-  consin  and  Missouri,  and  Employ- 
Eion  by  the  supreme  court  (Oc-  er's  Liability  Act  in  Arkansas  and 
tober,  1911)  in  the  case  of  South-  Georgia. 

ern  Railway,  that  the  Safety  Act  4  B.  &  O.  R.  R.  Co.  v.  Interstate 
was  applicable  to  all  equipment  Commerce  Commis-sion,  220  U.  S. 
of  an  Interstate  railroad  whether      94,  55  L.  Ed.  (1911).     In  this 


§    63]  FEDERAL   POWER   OF   REGULATION.  103 

that  congress  can  limit  the  hours  of  labor  of  employes  en- 
gaged in  interstate  transportation,  it  folloM'cd  that  this  power 
could  not  be  defeated  by  prolonging  the  period  of  service, 
through  other  requirements  of  the  carrier,  or  by  the  command- 
ing of  duties  relating  to  interstate  and  intrastate  operations. 
This  principle  that  the  federal  authority,  when  appropri- 
ately exercised,  is  not  impaired  by  incidental  application  of 
such  regulation  to  intrastate  service,  is  seen  to  be  of  far  reach- 
ing importance  when  the  complex  conditions  of  railroad  serv- 
ice are  considered.  An  interstate  railroad  system  is  operated 
as  a  unit  irrespective  of  state  boundaries,  has  but  one  corps 
of  officers  and  employes,  and  one  equipment,  and  its  operating 
employes  are  engaged  in  whatever  capacity  the  exigencies 
of  tlie  service  required.^  This  was  forcibly  illustrated  in  the 
unanimous  opinion  of  the  supreme  court,  holding,  without  dis- 
sent, that  congress  could  penalize  the  absence  of  required 
safety  appliances  on  cars  of  an  interstate  highway,  whether 
used  in  moving  state  or  interstate  traffic,  the  court  saying  that 
the  menace  was  not  merely  to  that  car  and  train  but  to  others. - 

§  63.  The  federal  regulating  power  and  state  corporations. — 

While  the  regulating  power  over  interstate  commerce  is  vested 
in  congress,  transportation  agencies  whereby  that  commerce  is 
carried  on,  railroad,  express,  telegraph  and  telephone  companies 
are  incorporated  or  organized  under  state  laws,  so  that  congress 
has  no  visitorial  or  charter  power  over  them.  These  state  organ- 
izations are,  however,  the  agencies  recognized  and  adopted  by 
congress  for  carrying  on  interstate  commerce,  and  the  power  of 
regulation  is  as  effective  over  railroad  operations,  as  if  the  cor- 
porations were  organized  by  the  federal  government. 

The  federal  government  has  also  controlled  and  terminated 
the  corporate  life  of  state  corporations  for  violation  of  fed- 
eral law.     In  the  Northern  Securities  case,^   a  holding  com- 

case   the   court   sustained   the  or-  connection     with     regulation     of 

der  of  the  Commission  of  March  state  rates  in  cases  of  alleged  in- 

3,  1908,  requiring  monthly  reports  terference    with    interstate    com- 

under  oath,  showing  the  instances  merce.     See  infra.  Chapter  VI. 

where  employes  subject  to  the  act  2  See  Southern  R.  Co.  v.  U.  S., 

had   been    on    duty    for   a   longer  32  Sup.  Ct.  Rep.  2  (Oct.  30,  1911), 

period  than  that  allowed.  affirming  164  Fed.  347.    See  infra, 

1  This    principle   of   federal   su-  §  508. 

premacy    has    been    discussed    in  s  infra,  §  76. 


104  FEDER-UL.   POWER   OF   REGULATION.  [§    63 

eral  law.  In  the  Northern  Securities  ease,=  a  holding  com- 
pany organized  under  the  laws  of  New  Jersey,  with  the  char- 
ter power  to  hold  and  acquire  the  stocks  of  other  companies, 
was  adjudged  an  unlawful  combination  in  restraint  of  inter- 
state commerce  in  its  holding  of  the  stocks  of  competing  inter- 
state railways,  and  its  dissolution  was  decreed  and  enforced  by 
the  federal  courts. 

The  prohibitions  and  penalities  of  the  Anti-Trust  Act  have 
been  enforced  against  state  business  corporations  engaged  in 
interstate  commerce,^  and  corporations  offending  against  that 
act  have  been  dissolved  by  the  federal  courts,  as  unlawful 
combinations.  The  production  of  the  corporate  books  and 
papers  of  state  corporations  before  federal  grand  juries  and 
other  investigating  bodies  has  been  enforced,-  and  congress 
has  imposed  an  excise  tax  upon  the  doing  of  business  as  a 
corporation  under  state  laws.^ 

Although  the  power  of  regulation  of  interstate  business  has 
been  thus  effectively  exercised  over  interstate  railroad  opera- 
tions, the  control  of  the  capitalization  of  the  railroads  and 
other  corporations  acting  as  federal  agencies  in  interstate  com- 
merce remains  in  the  states  whereunder  they  are  incorporated. 
It  has  been  urged  that  the  control  by  the  federal  government 
of  interstate  rates  cannot  be  effective,  without  the  control  of 
the  stocks  and  bond  issues  of  the  carriers;  and  that  the  ex- 
ercise of  the  state  authority  in  limiting  such  securities  issued 
by  an  interstate  railroad  may  interfere  with  and  embarrass 
interstate  commerce,  when  the  issue  of  such  securities  is  es- 
sential for  raising  funds  for  necessary  facilities  in  interstate 
traffic.  In  other  words  such  a  control  may  concern  not  only 
the  state  of  incorporation,  but  all  the  states  in  which  the  rail- 
road is  operated,  and  therefore  may  become  a  subject  of  fed- 
eral and  not  state  control.^ 

■i^  Infra,  chapter  V.  ance  of  stocks  and  bonds  by  rail- 
2  Infra,  %  348.  road    corporations    subject   to    the 
z  Infra,  §  66.  provisions  of  the  act  to  regulate 
4  Under  section  16  of  the  Com-  commerce,  and  the  power  of  con- 
merce  Court  Act  of  .June  18,  1910,  gress    to    regulate    or    affect    the 
the    president    appointed    a    com-  same."      See    report    of   this    com- 
mission   of    which    President    Ar-  mission  transmitted  by  the  presi- 
thur   T.   Hadley   of   Yale    Univer-  dent   to   congress,   Dec.   1911,   Ap- 
Eity  was  chairman,  to  investigate  pendix,  supra. 
questions   pertaining  to   the  issu- 


§    64]  FEDER.VL   POWER   OF   REGULxVTION.  105 

§  64.  Limitations  upon  the  federal  authority  in  interstate 
commerce. — Wliiie  the  aulliority  of  congress  to  regulate  rates 
or  to  delegate  that  authority  to  a  commission  has  been  uni- 
formly sustained,  since  the  passage  of  the  Act  of  1887,  and 
in  effect  conceded,  this  power  and  all  regulating  legislation 
must  be  exercised  subject  to  the  constitutional  requireinent 
of  due  process  of  law,  "and  against  the  taking  of  private 
property  for  public  use  without  compensation."  In  the 
exercise  of  this  regulating  power  congress  or  the  commerce 
commission  is  restrained  also  by  the  provision  of  the  constitu- 
tion, that  "no  preference  shall  be  given  by  any  regulation  of 
commerce  or  revenue  to  the  ports  of  one  state  over  those  of 
another."  "Ports  of  entry,"  established  under  the  customs 
laws  are  now  not  only  on  the  seaboard  as  formerly  and  at  the 
time  of  the  adoption  of  the  constitution,  but  are  scattered 
throughout  the  interior  as  land  ports.  The  construction  of 
this  constitutional  application  to  the  regulation  of  carriers 
charges,  in  the  recognition  of  differentials  in  favor  of  compet- 
ing ports  has  not  been  judicially  determined.  Congress  was 
advised  by  the  attorney  general  when  the  amendment  of  1906 
to  the  Interstate  Commerce  Act  was  under  consideration  that 
"reasonable  rates"  determined  by  the  legislative  authority 
would  not  constitute  a  preference  within  the  prohibitions  of 
this  section  of  the  constitution,  even  though  they  resulted  in 
a  varying  charge  per  ton,  per  mile,  to  and  from  the  ports  of 
the  different  states.^ 

The  power  of  congress  in  the  regulation  of  commerce  is  lim- 
ited, as  are  all  the  powers  of  the  federal  government,  by  the 
terms  of  the  grant,  as  the  government  is  one  of  enumerated 
powers,  and  the  powers  not  granted  to  congress  are  reserved 
for  the  states  and  the  people.  While  the  power  to  regulate 
interstate  commerce  can  be  exercised  by  congress  as  effectively 
as  by  a  single  government  with  a  wide  discretion  in  the  selec- 
tion of  means  appropriate  to  the  end,  this  power  is  limited  by 
the  terms  of  the  constitutional  grant.  Congress  is,  therefore, 
without  power  to  control  commerce  within  a  state.-     Neither 

1  Opinion     of    Attorney-General  =  See    Addyston    Pipe    &    Steam 

Moodey    to    senate.    May    5,    1905,      Co.  v.  U.  S.,  175  U.  S.  211,  44  L. 
Vol.  2,  Senate  Documents,  p.  1674.      Ed.  136    (1S99). 


106  FEDERAIi   POWER   OF   REGULATION.  [§    65 

congress  nor  tlie  federal  courts  could  deal  with  commercial 
combinations  in  a  state  not  affecting  interstate  commerce,  but 
where  the  combinations  do  affect  interstate  commerce  it  is 
immaterial  that  they  are  organized  under  state  laws. 

§  65  (57).  Prohibition  as  a  means  of  regulation. — An  im- 
portant and  far  reaching  question  involved  in  the-  extension 
of  the  federal  regulation  of  commerce  was  discussed  in  the 
Lottery  cases.  It  was  there  strongly  contended  by  four  dis- 
senting judges  ^  that  the  power  to  regulate  commerce  did  not 
include  the  power  to  prohibit  certain  classes  of  traffic  on  dis- 
tinctly moral  grounds  which  were  properly  consignable  by  the 
local  police  authority  of  the  states,  as  the  power  delegated  to 
congress  was  for  the  purpose  of  securing  the  freedom  of  in- 
terstate commerce  and  preventing  the  hostile  or  discriminat- 
ing action  of  the  states  interfering  therewith,  and  was  thereby 
distinguished  from  the  sovereign  control  over  foreign  com- 
merce, and  that  congress  had  no  general  police  powers,  such 
as  are  reserved  in  the  states. 

The  prevailing  opinion  did  not  directly  dispute  or  discuss 
these  positions  and  declined  to  formulate  any  rule  as  to  the 
power  of  congress,  but  based  the  conclusion  upon  what  was 
essentially  the  moral  view,  that  the  lottery  business  had  grown 
into  disrepute  and  had  become  offensive  to  the  people  of  the 
country,  was  a  kind  of  traffic  that  no  one  was  entitled  to  pur- 
sue as  a  right,  and  that  under  the  circumstances  of  the  particu- 
lar case  prohibition  of  this  class  of  traffic  was  an  appropriate 
method  of  regulation  for  congress  to  adopt.  The  decision  was 
therefore  limited  to  the  points  that  lottery  tickets  were  sub- 
ject of  traffic,  and  that  congress  could  lawfully  prohibit  such 
traffic  in  interstate  commerce.^ 

Congress  can  therefore  prohibit  in  interstate  commerce  a 

See  also  U.  S.  v.  Knight  Co.,  156  110,    36    L.    Ed.    93    (1892).     This 

U.  S.  1,  39  L.  Ed.  325  (1894).  was  on   the   ground   that  as  con- 

1  Justices  Fuller,  Brewer,  gress  furnished  postal  facilities 
Shiras  and  Peckham.  it    had    the    right    to    say    what 

2  The  court  had  sustained  a  should  be  carried  therein.  But 
statute  excluding  lottery  tickets  it  was  said  that  congress  could 
from  the  mails.  See  In  re  Jack-  nor  prevent  the  carriage  of  such 
son,  96  U.  S.  727,  24  L.  Ed.  877  tickets  by  other  means,  though 
(1878),  and  In  re  Rapier,  143  U.  S.  they  were  exclued  from  the  mails. 


§    6GJ  FEDERAL    POWER   OF    REGULATION.  107 

specific  class  oT  truCfic  which  is  deemed  injurious  or  offensive 
to  the  public,  and  it  may  also  prohibit  unlawful  combinations 
and  monopolies  on  the  ground  that  such  prohibition  is  neces- 
sary for  the  protection  of  the  freedom  of  interstate  commerce. 
The  power  to  prohibit  is  necessarily  involved  in  any  effective 
federal  control  of  the  corporate  agencies  engaged  in  the  con- 
duct of  commerce,  whether  through  federal  incorporation  or 
any  form  of  federal  franchise,  that  is,  where  in  order  to  make 
the  federal  system  effective  its  adoption  must  be  made  com- 
pulsory. Congress  has  thus  far  legislated  with  reference  to 
the  subjects  of  commerce,  and  not  concerning  the  corporate 
relations  of  parties  engaged  in  such  commerce. 

§  66  (58).  Regulation  of  commerce  through  the  taxing 
power. — Interstate  commerce  may  also  be  regulated  through 
the  exercise  of  the  taxing  power  by  congress.  While  congress 
has  not  an  unlimited  power  as  to  the  purpose  of  taxation,  and 
can  levy  taxes  only  in  order  to  pay  the  debts  and  provide  for 
the  common  defense  and  general  welfare  of  the  United  States.^ 
it  is  also  true  that  under  the  permanent  revenue  system  of  the 
government,  taxes  are  levied,  not  for  specific  purposes,  but  by 
continuing  laws  establishing  the  rate  of  customs  duties  and 
internal  revenue  taxes,  and  questions  relating  to  the  lawful 
purposes  of  taxation  do  not  arise  in  levying  revenue  taxes  but 
in  the  appropriation  of  public  funds  for  public  needs. 

It  is  well  recognized  that  the  power  of  taxation  is  sometimes 
invoked  with  no  purpose  of  revenue  in  view,  but  solely  to  des- 
troy the  interest  or  business  upon  which  the  tax  is  levied  by 
taxing  it  out  of  existence.  Thus  the  notes  of  the  state  banks 
were  taxed  out  of  existence  in  order  to  open  the  means  for  cir- 
culating the  notes  of  the  national  banks.  This  act  was  sus- 
tained by  the  supreme  court.'-  The  court  said  that  it  was  im- 
material that  the  tax  destroyed  the  business  or  franchise  exer- 
cised under  state  authority.  While  the  only  lawful  purpose  of 
taxation  is  revenue,  the  amount  of  the  tax  on  any  subject 
within  the  scope  of  the  taxing  power  is  for  the  legislative  dis- 
cretion to  determine.     In  the  words  of  Chief  Justice  ^Marshall 

1  Story     on     the     Constitution,  2  Veazie    Bank    v.     Fenno,    118 

sec.  907.  Wall.  533  (1869),  19  L.  Ed.  482. 


108  FEDERAL    POWER    OF    REGl'LATION.  [§    67 

in  MeCulloeli  v.  ]\[ary]and.^  "it  is  a  perplexing  inquiry  unfit 
for  the  judicial  department,  Avhat  degree  of  taxation  is  a  legit- 
imate use  and  Avliat  degree  may  amount  to  an  abuse  of  the 
power?"  A  tax  on  oleomargarine,  as  is  well  known,  was  im- 
posed for -the  avowed  purpose  of  destroying  the  business.  It 
therefore  follows  that  congress,  subject  to  the  constitutional 
requirement  of  geographical  uniformity  -  and  to  the  limita- 
tions of  direct  taxation,^  could  impose  indirect  taxes  and  ex- 
cises on  subjects  and  facilities  of  commerce  or  upon  the  privi- 
lege of  carrying  on  such  commerce,  whether  by  individuals 
or  corporations,  and  that  the  amount  of  such  taxes  would  be 
determined  by  the  discretion  of  congress.* 

§  67  (59).  The  federal  power  of  granting  corporate  char- 
ters.— The  unexercised  or  undeveloped  power  of  congress  in 
interstate  commerce  is  now  discussed  more  particularly  with 
reference  to  the  power  of  congress  in  federal  incorporation  of 
Tjusiness  or  trading  companies.  Interstate  and  foreign  com- 
merce under  modern  business  conditions  are  almost  wholly 
carried  on  by  corporations  chartered  by  the  several  states.  The 
states  therefore  have  the  sole  visitorial  control  of  the  organi- 
zation of  the  business  associations,  through  and  by  which  the 
interstate  and  foreign  business,  subject  to  the  exclusive  juris- 
diction of  congress,  is  carried  on.  The  difficulty  of  effectual 
governmental  regulation  of  such  commerce  is  apparent. 

The  power  to  charter  a  corporation  is  not  among  the  enu- 
merated powers  of  congress,  but  in  the  great  case  of  McCul- 
loch  V.  ^Maryland  ^  the  court  based  the  power  to  charter  a  na- 
tional bank  upon  the  right  of  congress  to  adopt  incorporation 
as  a  reasonable  means  of  carrying  into  effect  its  enumerated 

1  Supra,  §  5.  sion  sustaining  the  tax  upon  the 

2  Head  Money  Cases,  112  U.  S.  net  earnings  of  state  corporations. 
580,  28  L.  Ed.  798  (1884);  Knowl-  Flint   v.    Stone-Tracy   Co.,    220   U. 

ton  V.  Moore,  178  U.  S.  41,  44  L.  S.    107,    55    L.    Ed.    (1911). 

Ed.  969   (1900).  This   tax   was    advocated    in   con- 

3  Income  Tax  Cases,  158  U.  S.  gress  not  only  as  a  revenue  meas- 
601,  39  L.  Ed.  1108  (1894);  Nicol  ure,  but  because  of  the  regulation 
V.  Ames,  173  U.  S.  509,  43  L.  Ed.  through  incidental  publicity  of 
786  (1899);  Knowlton  v.  Moore,  corporate  business  which  would  be 
supra.  secured. 

4  The     extent     of     this     taxing  o  4  Wheat.  316,  supra. 
power  was  illustrated  in  the  deci- 


§    67]  FEDEUAL    POWER    OF    UEGIl.ATION.  lOi) 

powers.  "Incorporation,"  said  the  court,  "is  never  made  tlic 
end  for  which  their  powers  are  exercised,  but  a  means  by 
which  their  objects  are  accomplished."  .  .  .  "Tlie  power 
of  creating  a  corporation  is  never  used  for  its  own  sake,  but  for 
the  purpose  of  affecting  something  else."  The  bank,  there- 
fore, was  lawfully  incorporated  as  a  means  of  managing  the 
great  fiscal  concerns  of  the  government.  The  constitutionality 
of  the  national  banking  act  of  1864  was  based  on  the  same 
principle.  The  national  banks  organized  under  the  act,  said 
the  court,  were  the  instruments  designed  to  be  used  to  aid  the 
government  in  the  administration  of  an  important  branch  of 
the  public  service.     They  are  means  appropriate  to  that  end.' 

The  power  of  congress  to  incorporate  railroad  companies  to 
carry  on  interstate  commerce,  has  not  only  been  conceded,  but 
has  been  exercised  in  the  incorporation  of  the  Pacific  Railroad 
companies ;  -  and  the  chartering  of  a  corporation  for  con- 
structing a  bridge  over  a  navigable  stream  forming  the  bound- 
ary of  two  states  and  condemning  the  property  for  approaches 
thereto,  had  been  directly  sustained.^  The  power  of  incor- 
poration in  these  cases  was  upheld  as  a  reasonable  and  proper 
means  of  regulating  commerce  between  the  states,  as  these 
corporations  were  direct  instrumentalities  for  carrying  on  in- 
terstate commerce. 

A  corporate  franchise  involves  the  power  to  hr,  and  also  the 
power  to  do.  Congress  has  the  power  to  grant  a  corporate 
franchise  for  the  construction  of  national  highways.  The  su- 
preme court  in  the  Pacific  Railroad  Tax  cases,  said  that  in 
former  times  this  power  was  exercised  very  little,  as  commerce 
was  then  conducted  wholly  by  water,  and  many  of  our  states- 
men had  entertained  doubts  as  to  the  existence  of  the  power  to 
establish  ways  of  communication  over  land.  But  since  the  ex- 
pansion of  the  commerce  of  the  country,  the  multiplication  of 
its  products  and  the  invention  of  railroads  and  locomotion  by 
steam,   land  transportation   has   so   vastly   increased,   that   a 

1  Farmers,  etc.,  National  Bank  Ed.  150  (ISSS);  Decker  v.  R.  R. 
V.  Bearing,  91  U.  S.  29   (1S75),  23       Co.,  30  Fed.  723   (18S7). 

L.  Ed.  196.  sLuxton  v.  North  River  Bridge 

2  Pacific  R.  Cases,  115  U.  S.  2,  Co.,  153  U.  S.  525,  38  L.  Ed.  808 
29  L.  Ed.  319  (1S85);  California  v.        (1894). 

Pacific  Railroad.s,  127  U.  S.  1,  32  L. 


110  FEDERAL   POWER   OF   REGULATION.  [§    68 

sounder  consideration  of  the  subject  has  prevailed  and  led  to 
the  conclusion  that  congress  had  plenary  power  over  the  whole 
subject. 

Congress  has  granted  charters  of  incorporation  with  fran- 
chises to  be  exercised  in  the  district  of  Columbia,  as  assurance 
companies/  and  savings  banks  and  trust  companies.-  A  fed- 
eral charter  was  also  granted  to  the  Maritime  Nicaraugua 
Canal  Company  for  facilitating  intercourse  between  the  At- 
lantic and  Pacific  oceans.^  The  National  Trades  Union  In- 
corporation Act,  infra,  Appendix,  contains  no  reference  to  inter- 
state commerce  except  that  the  members  must  be 'resident  in 
two  or  more  states.  No  incorporation  had  been  formed  under 
this  act  up  to  July  1,  1911. 

§  68  (60).  Federal  incorporation  as  a  means  in  tho  exercise 
of  the  commerce  power. — As  congress  can  exercise  this  power 
of  incorporation  as  a  means  and  not  as  an  end,  its  power  of  in- 
corporation under  the  commerce  clause  would  necessarily 
therefore  be  limited  in  its  grant  to  the  carrying  on  of  inter- 
state and  foreign  commerce,  with  such  corporate  powers  as 
would  be  fairly  incidental  to  such  general  grant.  Congress 
has  no  power  over  the  business  of  manufacturing,  mining  or 
other  local  productive  industries  conducted  in  the  states,*  and 
therefore  such  powers  could  not  be  granted  by  congress,  nor 
exercised  under  a  congressional  grant. 

It  has  been  suggested"'  that  a  "franchise  to  produce,"  as  by 
manufacturing,  would  be  incidental  and  essential  to  a  franchise 
to  sell,  and  therefore,  congress  would  have  the  power  to  grant 
franchises  for  production  as  essential  to  the  carrying  on  of  in- 
terstate commerce.  This  position  seems  clearly  untenable  in 
view  of  the  distinct  declaration  of  the  supreme  court  in  the 
Knight  case,  that  commerce  is  incidental  to  manufacture  and 
succeeds  to  it,  but  is  not  a  part  of  it,  and  that  the  jurisdiction 
of  congress  relates  to  commerce  alone.    As  said  in  that  case 

lAct  of  February   14,   1865,   13  *  United    States   v.    Knight   Co., 

Stats.  428.  supra. 

2  Act  of  March  3,  1865,  13  Stats.  ^  Appendix  A  to  Report  to  Com- 
510.  missioner    of    Corporations,    Dec. 

3  Act  of  February   20,   1899,   25  1904. 
Stats.  675. 


§    69]  FEDERAL   POWER   OF    REGULATION.  Ill 

and  in  an  earlier  case,^  the  result  of  a  contrary  ruling  wouLl 
be  that  congress  would  be  invested  to  the  exclusion  of  the 
states  with  the  power  to  regulate  every  branch  of  human  in- 
dustry. A  corporation  organized  to  engage  in  interstate  and 
foreign  commerce  would  necessarily  buy  in  order  to  sell,  and 
such  purchases  and  sales,  both  domestic  as  well  as  interstate 
and  foreign,  could  be  held  incidental,  as  essential  to  the  exer- 
cise of  the  federal  grant.  The  power  "to  produce,"  however, 
would  involve  manufacturing,  mining  and  the  whole  range 
of  local  productive  industries,  and  their  regulation  and  con- 
trol by  federal  authority,  under  the  commerce  power  would 
essentially  revolutionize  the  whole  frame-work  of  our  govern- 
ment, with  its  distinct  divisions  of  the  powers  of  sovereignty 
between  the  state  and  federal  governments. 

The  difficulty  does  not  lie  merely  in  the  conflict  with  the 
sovereignty  of  the  state,  which  has  exclusive  jurisdiction  over 
the  business  of  manufacturing  and  producing  within  its  bor- 
ders, but  in  the  limitation  of  the  federal  government  to  the 
powers  expressly  granted  and  to  those  which  are  fairly  and 
reasonably  incidental  to  those  expressly  granted. 
'  "While  the  power  of  congress  to  incorporate  the  quasi--p\iblie 
corporations  such  as  railroads,  bridges,  •  canals,  telegraph  and 
telephone,  and  others  which  are  in  effect  governmental  agen- 
cies in  carrying  on  interstate  commerce,  has  been  conceded, 
and  exercised,  the  impracticability  of  separating  commerce 
from  manufacture  and  production  in  corporate  business  or- 
ganizations leads  to  the  doubt  whether  the  incorporating  power 
of  congress  can  practically,  even  if  lawfully,  be  extended  be- 
yond the  direct  agencies  of  interstate  commerce. 

§  69  (61).  Relation  of  the  states  to  federal  corporations. — 

Assuming  that  corporations  are  chartered  by  congress  for  the 
carrying  on  of  interstate  and  foreign  commerce,  their  status  in 
relation  to  the  state  government  can  be  determined  by  analogy 
to  the  relation  now  held  by  national  banks,  which  are  organ- 
ized under  federal  law,  and  by  interstate  railroad  corporations 
organized  under  federal  law,  and  corporations,  as  railroad 
companies,  transacting  interstate  business,  though  chartered 
under  state  law. 

*Kidd  V.  Pearson,  128  U.  S.  1,  3  2  L.  Ed.  346   (1888). 


112  FEDERAT>   POWER   OF    REGULATION.  [§    €9 

National  banks  are  not  chartered  under  the  commerce  clause, 
but  as  banks  of  deposit  and  discount  their  ordinary  business 
does  not  differ  in  any  wise  from  that  of  the  state  banks  in  the 
same  communities.^  The  Pacific  railroads  were  incorporated 
by  congress,  and  though  chartered  by  the  federal  power,  they 
transact  local  as  well  as  through  business,  and  as  to  the  former 
are  subject  to  the  laws  of  the  states  where  they  operate.-  It 
would  seem,  however,  from  expressions  in  the  opinions  cited, 
that  this  subjection  to  state  control  in  the  regulation  of  local 
rates  results  from  a  failure  of  congress  to  express  any  inten- 
tion in  the  acts  of  incorporation  that  the  company  should  be 
exempt  from  state  control. 

Assuming,  therefore,  that  congress  should  incorporate  com- 
panies for  the  purpose  of  carrying  on  interstate  and  foreign 
commerce,  such  companies  could  make  domestic  as  well  as  in- 
terstate and  foreign  sales.  Congress  would  have  visitorial 
power  over  such  corporations,  as  it  has  over  national  banks, 
but  its  domestic  business  would  be  subject  to  state  regulation 
and  control,  as  the  domestic  business  of  interstate  carriers  is 
subject  to  such  state  control.  The  state  power  of  taxation 
would  extend  to  the  property  of  such  corporations  within  its 
jurisdiction  as  it  does  now  to  the  property  of  national  banks. 
The  franchise  "to  do,"  that  is,  the  franchise  to  transact  in- 
terstate and  foreign  commerce,  which  would  be  held  by  such 
corporation  under  the  federal  grant,  would  not  be  subject  to 
state  taxation,  and  neither  the  right  to  transact  such  business, 
nor  such  interstate  and  foreign  business  conducted  by  state 
corporations  would  be  subject  to  state  taxation;  but  the 
"business"  so  exempt  is  to  be  distinguished  from  the  property 
employed  in  the  jurisdiction  in  the  transaction  of  the  business, 
which  would  be  subject  to  state  taxation. 

It  has  been  suggested  that  federal  incorporation  of  business 
companies  would  be  ineffective  without  a  "franchise  to  pro- 
duce," as  states  could  pass  discriminating  laws  prohibiting 
sales  to  such  corporations.  It  is  obvious  however,  that  any 
state  statutes  interfering  with  or  discriminating  against  fed- 

1  The    Secretary   of    the    Treas-  2  Reagan    v.    Mercantile    Trust 

ury,  December,  1904,  recommends  Co.,  154  U.  S.  413  (1894),  38  L.  Ed. 

that  congress  should  make  provi-  1028;    Smyth  v.  Ames,   169  U.   S. 

sion  for  the  incorporation  and  reg-  466   (1898),  42  L.  Ed.  819. 
ulation  of  trust  companies. 


70J 


FEDERAL    I'OWER    OF    REGLLATJOX. 


113 


eral  corporations  in  the  exercise  of  tlieir  federal  francliise 
would  be  clearly  violative  of  the  federal  supremacy  in  the 
regulation  of  interstate  commerce.^ 

§  70  (62).  The  requirement  of  federal  franchise  for  business 
corporations  in  interstate  commerce. — Another  method  of  pro- 
posed regulation  of  interstate  coiiunerce  is  through  tlie  require- 
ment of  a  federal  franchise  or  license  for  state  corporations  to 
transact  interstate  commerce.  This  is  the  method  which  was 
recommended   by   the   commissioner   of  corporations   in   1904.- 


1  See  Easton  v.  Iowa,  188  U.  S. 
220,  47  L.  Ed.  452  (1903),  as  to 
holding  void  attempted  state  regur 
lation  of  national  banks. 

On  this  general  subject  of  the 
incorporation  power  of  congress, 
see  address  of  J.  B.  Dill  before 
Harvard  university,  March,  1902, 
Yale  Law  Journal,  1902,  on  A  Na- 
tional Incorporation  Law  for 
Trusts;  Professor  Horace  L.  Wil 
gus,  Michigan  State  University 
Law  School,  in  IMichigan.  Law  Re- 
view, FebruaiT  and  April,  1904; 
report  of  Industrial  Commission, 
"Vol.  19,  pp.  644  et  seq.;  also  report 
of  committee  on  Commerce  of 
American  Bar  Association  of  1904; 
Carmon  F.  Randolph  in  Columbia 
Law  Review  for  March,  April  and 
May,  1903;  bill  of  H.  W.  Palmer, 
58th  congress,  H.  R.  6C.  See  also 
address  of  Professor  Wilgus  ba- 
fore  State  Board  of  Commissioners 
for  Promoting  Uniform  Legisla- 
tion, September  29,  1904,  published 
by  George  Wahr,  Ann  Arbor, 
Mich.,  "Should  there  be  a  Federal 
Incorporation  Law  for  Commercial 
Operations?"  See  also  presiden- 
tial address  of  Hon.  Edgar  Howard 
Farrar  before  American  Bar  Asso- 
ciation (1911)  suggesting  that  the 
Btates  should  cooperate  in  sup- 
pressing injurious  combinations  in 
8 


commerce  by  agreements  made 
"with  consent  of  congress,"  as 
authorized  by  art.  I,  sec.  10,  par. 
3  of  the  constitution.  Attorney- 
General  Wickersham,  in  an  ad- 
dress before  the  Minnesota  Bar 
Association,  July  19,  1911,  sug- 
gested as  a  matter  for  serious  con- 
sideration whether  congress  might 
not.  through  an  administrative 
board  or  commission,  regulate  the 
prices  of  commodities  which  were 
the  subject  of  interstate  commerce 
by  applying  the  same  rule  which 
had  been  applied  to  prices  for  trans- 
portation by  rail,  as  it  seemed  that 
the  laws  of  supply  and  demand  did 
not,  and  had  not  for  many  years 
worked  in  this  country  in  a  nata- 
ral,  unrestrained  and  unfettered 
manner.  He  also  suggested  that  a 
federal  incorporation  act,  while  it 
might  offer  some  difficulties,  would 
help  lay  the  ax  at  the  root  of  the 
trust  evil. 

2  Mr.  Garfield,  the  commissioner 
of  corporations,  in  his  first  annual 
report,  December,  1904,  recom- 
mends that  congress  consider  the 
advisability  of  enacting  a  law  for 
the  regulation  of  interstate  and 
foreign  corporations,  under  license 
or  franchise,  which  should  provide 
a  federal  franchise  or  license  to 
those  engaged  in  interstate  com- 


114  FEDER.U-   POWER   OF   REGULATION.  [§    70 

Assuming  that  such  a  system  was  adopted,  its  effectiveness 
Avould  of  course  depend  upon  its  exclusiveness.  Thus  cor- 
porations not  having  such  federal  license  would  be  excluded 
from  the  transaction  of  interstate  commerce.  It  is  true  also 
that  if  a  system  of  federal  incorporation  was  adopted,  it  would 
not  be  effective  if  its  adoption  was  voluntary,  as  under  the 
present  sj^stem  corporate  charters  are  sought  from  the  states 
which  are  the  most  liberal  in  their  incorporation  laws.  The 
adoption  of  federal  charters  could  doubtless  be  made  effective 
through  the  exercise  of  the  federal  power  of  taxation,  as  the 
same  power  was  effective  in  the  establishment  of  the  national 
banking  system. 

The  requirement  of  either  method,  therefore,  would  mean 
the  exercise  of  the  power  of  prohibition  by  congress  by  means 
of  regulation,  in  that  corporations  not  having  the  necessary 
franchise  would  be  precluded  from  transacting  interstate  com- 
merce. Such  a  policy  as  to  the  parties  transacting  interstate 
commerce  would  be  essentially  novel,  as  the  power  of  prohibi- 
tion has  been  heretofore  exercised  only  as  to  the  sutjects  of 
commerce,  as  in  the  lottery  cases. 

The  supreme  court  held  ^  that  a  state  statute  providing  that 
an  agent  of  an  interstate  express  company  should  take  out  a 
license  showing  that  the  company  he  represented  was  pos- 
sessed of  a  capital  of  $150,000,  was  invalid.  The  court  said 
that  to  carry  on  interstate  commerce  was  not  a  franchise  or 
a  privilege  granted  by  the  state,  but  a  right  which  every  citi- 
zen of  the  United  States  was  entitled  to  exercise  under  the 
constitution  and  laws  of  the  United  States,  and  the  accession 
of  mere  corporate  facilities  in  carrying  on  their  business  could 
not  have  the  effect  of  depriving  them  of  such  right,  unless  con- 
gress should  see  fit  to  interpose  some  contrary  regulation  on 

merce  and  a  prohibition  of  all  cor-  withdraw  such  franchise  or  license 

porations    or    corporate    agencies  in  case  of  violation  of  law,  with 

from    engaging    in    interstate    or  the  proper  right  of  judicial  appeal 

foreign    commerce    without    such  to  prevent  abuse  of  power, 
federal  franchise  or  license,  and  to  See  review  of  this  report  in  the 

Include  the  imposition  of  all  neces-  Michigan    Law    Review    of    Feb- 

sary  requirements,  as  to  corporate  ruary,    1905,    by    Professor    H.    L. 

organization  and  management,  as  Wilgus,   "Federal  License   or  Na- 

a  condition  precedent  to  the  grant-  tional  Incorporation." 
license,  with  the  right  to  refuse  or  i  Crutcher  v.  Kentucky,   141  U. 

mg  of  such  federal  franchise  or  S.  47,  35  L.  Ed.  649  (1891;. 


?    71]  FEDERAL    POWER   OP    REGLLATION.  115 

the  siil)joet.  Although  this  decision  was  rendered  willi  refer- 
ence to  the  power  of  the  state  over  an  interstate  express  com- 
pany, it  would  seem  to  follow,  as  the  only  regulating  power  is 
that  of  congress,  that  it  can  determine  what,  if  any,  regulation 
is  required  for  the  conduct  of  interstate  commerce  with  cor- 
porate facilities. 

But  assuming  that  congress  may  have  the  power  to  deter- 
mine on  what  conditions  commerce  may  be  conducted  under 
corporate  organizations,  or  by  corporations,  it  does  not  follow 
that  it  would  have  an  unlimited  power  in  prescribing  the  terms 
and  conditions  of  corporate  organization  to  be  exacted  as  a 
condition  of  such  licenses.  These  requirements,  it  would  seem, 
should  have  a  reasonable  relation  to  the  business  of  inter- 
state commerce,  over  which  alone  congress  has  the  regulating 
power. 

§  71  (63).  The  development  of  the  latent  federal  power  in 
the  regulation  of  commerce. — The  commerce  clause  in  the  con- 
stitution written  in  the  days  of  the  stage  coach  and  the  sailing 
vessel,  has  been,  and  is  being  adapted,  by  legislative  enact- 
ment and  judicial  construction,  to  the  age  of  steam  and  elec- 
tricity. This  does  not  mean  that  there  has  been  any  strained 
judicial  construction  of  the  constitutional  power,  for  the  powers 
of  government  were  wisely  declared  in  the  constitution  in 
broad  and  comprehensive  terms  which  have  proved  adequate 
for  the  changed  economic  conditions  and  the  tremendous  de- 
velopment of  commerce  between  the  states.  These  forces  have 
compelled  a  judicial  recognition  of  the  latent  federal  power  in 
the  commerce  clause  of  the  constitution.  These  influences  will 
doubtless  be  felt  in  the  future  as  they  have  in  the  past.  Ques- 
tions of  the  present  day  which  are  now  crowding  for  solution, 
growing  out  of  new  business  conditions,  the  development  of 
great  combinations  both  of  commerce  and  labor,  discussed  in 
the  succeeding  chapters,  will  bring  about  new  legislation  and, 
doubtless,  in  time  influence  the  judicial  construction  of  the 
commerce  cla^ise  in  the  application  to  new  conditions  which 
demand  an  effective  governmental  control. 

Whatever  the  old  time  prejudice  against  the  extension  of 
federal  poAver  under  the  complex  governmental  system  of  the 
United  States,  tlie  practical  good  sense  of  the  American  people 
recognizes  the  necessity  of  substituting  an  adequate  federal 


116  FEDERAL  POWER  OF  REGULATION.  [§  71 

authority  in  place  of  an  inadequate  state  authority  to  meet 
pressing  public  needs.  This  is  illustrated  in  the  practical 
unanimity  with  which  such  legislation  as  the  Interstate  Com- 
merce Act,  the  Anti-Trust  Act,  and  the  recent  extensions  of  au- 
thority have  been  enacted  by  congress.  Capitalists  in  control 
of  great  commercial  combinations  prefer  one  regulating  mas- 
ter to  fortj^-six.  In  like  manner  the  labor  organizations,  such 
as  the  Brotherhoods  of  Railroad  Employes,  seek  for  legisla- 
tion for  their  interests  which  will  be  adequate  and  effective 
and  therefore  ask  for  federal  in  place  of  state  action.  It  is 
therefore  because  there  are  public  needs  for  the  exercise  of 
authority  adequate  to  deal  with  them,  that  this  exercise  of 
federal  authority  is  demanded. 

The  broadened  judicial  conception  of  the  federal  power  in 
interstate  commerce,  is  illustrated  in  the  comparative  unanim- 
ity of  the  recent  (1911)  decisions  of  the  supreme  court  in  the 
application  and  enforcement  of  the  commerce  clause,  recall- 
ing therein  the  unanimity  of  the  court  in  the  great  constitu- 
tional decisio*ns  of  our  early  history,  and  contrasting  with  the 
close  divisions  of  the  court  of  a  more  recent  date.^ 

Judicial  constructions  as  well  as  legislation  may  be  influ- 
enced not  only  by  new  business  economic  and  social  condi- 
tions, and  the  public  opinion  based  thereon,  but  also  by  changes 
in  the  moral  standards  of  public  opinion.  Thus  the  prevail- 
ing opinion  in  the  lottery  cases  was  based  upon  a  distinctly 
moral  ground  that  public  opinion  condemned  lotteries  as 
recognized  public  nuisances ;  while  at  the  time  of  the  adoption 
of  the  constitution  and  for  a  generation  thereafter  lotteries 
were  a  recognized  means  approved  by  public  opinion  for  rais- 
ing money  for  educational  and  charitable  purposes.  It  would 
have  ajjpeared  strange  indeed  to  the  framers  of  the  constitu- 
tion that  the  federal  power  could  ever  be  successfully  exerted 
to  prohibit  interstate  traffic  in  lottery  tickets. - 

1  The  Anti-trust  and  Railroad  delivered  his  great  opinion  on  the 
cases,  infra,  chapter  V;  Lottery  supremacy  of  the  federal  judicial 
cases,  supra,  §  65;  Northern  Se-  power,  the  case  was  that  of  a  party 
curities  case,  infra,  §  76.  claiming  the  right  to  sell  lottery 

2  See  Waite,  C.  J.,  in  Stone,  v.  tickets  in  Virginia  for  a  lottery  in 
Mississippi,  101  U.  S.  814,  25  L.  Ed.  the  District  of  Columbia,  estab- 
1079  (1879).  In  Cohens  v.  Vir-  lished  under  a  charter  granted  by 
ginia,   6  Wheat.   264    (1821),  5  L.  congress  in  1812. 

Ed.  257,  wherein  Marshall,  C.  J., 


CHAPTER  V. 
BUSINESS  COMBINATIONS  IN  INTERSTATE  COMMERCE. 

§  72.  The  demand  for  federal  regulation  of  business  combinations. 

73.  The  Anti-Trust  Act  of  1890. 

74.  Restraint  of  trade  in  interstate  commerce  under  the  cominou  law. 

75.  Constitutionality  of  the  act. 

76.  Railroads  included  in  the  act. 

77.  A   reasonable   construction   and   reasonable   restraints   of   trade 

distinguished. 

78.  Direct  and  incidental  restraint  of  trade. 

79.  Suppression  of  competition  must  be  substantial  to  be  a  restraint 

of  trade. 

SO.  The  modern  law  of  restraint  of  trade. 

81.  Illegal  combinations  in  interstate  commerce. 

82.  Complete  suppression  of  competition  not  essential. 

83.  Monopoly  within  the  meaning  of  the  act. 

84.  No  application  to  commerce  within  a  state. 

85.  State  holding  companies. 

86.  Restrictive  sales  in  interstate  commerce. 

87.  No  distinction  as  to  commodities  subject  of  contract. 

§  72  (64).  The  demand  for  federal  regulation  of  business 
combinations. — As  the  demonstrated  incapacity  of  the  states  to 
regulate  interstate  commerce  was  the  direct  occasion  for  the 
enactment  of  the  Interstate  Commerce  Law  in  1887,  so  the  anti- 
trust agitation  following  thereafter  caused  the  demand  for  the 
exercise  of  the  federal  power  in  dealing  with  business  combi- 
nations in  commerce  which  the  states  were  powerless  to  con- 
trol. The  distinct  economic  trend  in  industrial  development, 
which  was  then  manifested  in  the  efforts  to  save  economic 
Avaste  in  production  and  distribution  by  the  concentration  of 
capital  in  business  enterprises,  resulted  in  different  forms  of 
eombinations  for  the  restriction  of  competition  in  business, 
which  aroused  public  hostility  and  led  to  the  enactment  by 
many  states  of  anti-trust  laws  more  or  less  drastic,  prohibit- 
ing all  combinations  in  restraint  of  competition.  Such  laAVS, 
however,  proved  inadequate,  as  they  could  have  no  extra-ter- 
ritorial operation  beyond  state  lines,  and  the  freedom  of  com- 
merce secured  under  the  constitution  of  the  United  States  pre- 
cluded  the   states   from    excluding   "trust-ninde"    goods   im- 


118         BUSINESS   COMBINATIONS   IN   INTERSTATE    COMMEKCE.     [§    72 

ported  from  other  states.  Public  opinion,  which  has  found 
frequent  expression  in  judicial  opinions,  was  firmly  convinced 
that  the  repression  of  competition  tended  to  monopoly,  and  that 
the  control  of  production  and  prices  by  the  elimination  of 
competition  in  any  industry  was  dangerous  to  the  public  wel- 
fare. It  was  recognized  that  the  control  of  prices  could  be  ex- 
ercised not  merely  in  raising,  but  also  at  certain  times  in  cer- 
tain localities  in  unduly  depressing  them  so  as  to  crush  com- 
petitors by  underselling.  The  evil  aimed  at  was  the  unregu- 
lated power  of  control  over  industries  resulting  from  the  suc- 
cessful elimination  of  competition  through  the  extension  of 
the  principle  of  business  association. 

This  agitation  in  congress  and  out  of  it  resulted  in  the  pas- 
sage of  the  so-called  Sherman  Anti-Trust  Act,  which  was  ap- 
proved July  2,  1890.^ 


1  In  the  Standard  Oil  opinion, 
the  supreme  court  said  that  the 
debates  in  congress  conclusively 
showed  that  the  main  cause  which 
led  to  the  legislation  was  the 
thought  that  it  was  required  by 
the  economic  condition  of  the 
times;  that  is,  the  vast  accumula- 
tion of  wealth  in  the  hands  of  cor- 
porations and  individuals,  the 
enormous  development  of  corpora- 
tions, the  facility  of  combination 
which  such  organizations  afforded, 
the  thought  that  the  facility  was 
being  used  and  that  combinations 
known  as  "Trusts"  were  being 
multiplied,  and  the  widespread  im- 
pression that  their  power  had  been 
or  would  be  exerted  to  suppress 
individuals  and  to  injure  the  pub- 
lic generally.  The  court  added 
that  although  opinions  could  not 
be  used  as  a  means  for  interpret- 
ing the  statute,  as  had  been  held 
in  the  Trans-Missouri  Freight  As- 
sociation case,  166  U.  S.  318,  41 
L.  Ed.  1007  (1897),  that  rule  in 
the  nature  of  things  Is  not  vio- 


lated by  resorting  to  debates  as 
a  means  of  ascertaining  the  en- 
vironment at  the  time  of  the  en- 
actment of  the  particular  law; 
that  is,  the  history  of  the  period 
when  it  was  adopted. 

Hon.  William  B.  Hornblower,  in 
his  annual  address  before  the  Am. 
Bar  Ass'n,  1911,  on  Anti-Trust 
Legislation   and   Litigation,   said: 

"The  word  'trust'  acquired  an  un- 
enviable prominence  in  the  eight- 
ies and  became  the  familiar  and 
common  expression  for  a  combina- 
tion of  competing  interests  under 
one  management.  To-day  and  for 
many  years  past,  the  so-called 
trust  in  its  original  sense  has  be- 
come rare,  but  the  expression  surr 
vives  and  has  assumed  a  generic 
significance  as  indicating  and  con- 
noting every  form  of  combination 
of  competing  interests.  The  origr 
inal  trust  arrangement  was,  as 
will  be  remembered,  an  arrange- 
ment whereby  a  number  of  comr 
peting  manufacturers,  individual 
or  corporate,  while  retaining  their 


§    73]     BUSINESS    COMBINATION'S    IN    INTERSTATE    COMMERCE.  119 


§  73  (65).  The  Anti-Trust  Act  of  1890.— Tliis  act,  which  was 
entitled  "An  Act  to  Protect  Trade  and  Commerce  Against  Un- 
lawful Restraints  and  Monopolies,"  declared  illegal  and  crimi- 
nal, punishable  by  fine  or  imprisonment  or  both,  every  eon- 
tract  or  combination,  in  the  form  of  trust  or  otherwise,  or 
conspiracy  in  restraint  of  trade  and  commerce  among  the  sev- 
eral states  or  with  foreign  nations,  and  any  monopolizing  or 
attempt  to  monopolize  any  part  of  trade  or  commerce  among 
the  states.  The  act  provided  penalties  for  its  violation,  in- 
cluded contracts  in  any  territory  or  the  district  of  Colum- 
bia, provided  for  seizure  and  condemnation  of  property  in  the 
course  of  transportation  owned  under  any  contract  made  in 
violation  of  the  act,  and  gave  the,  right  of  action  to  private 
persons  injured  by  such  combinations  with  three-fold  damages, 
and  a  summary  procedure  in  equity  at  the  suit  of  the  United 
States  to  prevent  and  restrain  violations  of  the  act.^ 


Individual  or  corporate  identity 
and  their  individual  or  corporate 
ovmership  of  their  respective  prop- 
erties, put  into  the  hands  of  trus- 
tees their  respective  interests,  the 
trustees  being  clothed  with  the 
right  to  dictate  to  the  respective 
competitors  the  terms  on  which 
they  should  compete,  the  amount 
and  character  of  their  output  and 
the  prices  at  which  the  output 
should  be  sold.  The  term  'trust' 
soon  became  a  term  of  opprobium 
and  has  so  remained.  The  large 
combinations  of  capital  which  now 
exist  in  various  branches  of  in- 
dustry have  inherited  the  oppror 
bium  attaching  to  this  term.  To 
call  a  combination  or  a  corporation 
a  trust  is  to  excite  public  con- 
demnation and  to  put  the  com- 
bination or  the  corporation  on  the 
defensive." 

1  See  infra,  §  432  et  seq.,  for 
the  act  in  full,  with  the  judicial 
construction  and  application  of 
the  several  provisions. 


The  Tariff  Act  of  1894  contained 
substantially  the  same  prohibi- 
tion, of  combinations,  conspira- 
cies, trusts  and  agreements  in  re- 
straint of  trade  or  free  competi- 
tion in  lawful  trade  or  commerce, 
or  to  increase  the  market  price  in 
any  part  of  the  United  States  for 
an  article  imported  or  intended  to 
be  imported  into  the  United  States 
or  of  any  manufacture  in  which 
such  imported  article  enters  or  is 
intended  to  enter.  Penalties  were 
imposed  and  the  circuit  court 
vested  with  jurisdiction  to  prevent 
and  restrain  such  violation.  Pro- 
vision was  also  made  for  the  for- 
feiture of  property  owned  by  any 
such  combination  and  for  a  private 
right  of  action  with  three-fold 
damages  and  reasonable  attorney's 
fee  to  any  party  injured  thereby. 
These  sections  were  continued  in 
force  by  the  Tariff  Act  of  1897 
(see  2nd  Comp.  Stat.  p.  1702), 
were  not  repealed  by  the  Tariff 
Act  of  August  5th,  1909,  known  as 


120         BUSINESS    COMBINATIONS   IN   INTERSTATE    COMMERCE.     [§    74 

§  74  (66),  Restraint  of  trade  in  interstate  commerce  under 
the  common  law. — This  act  of  1890,  the  supreme  court  has  defi- 
nitely decided  in  the  Standard  Oil  and  Tobacco  cases,  must  be 
construed  with  reference  to  the  common  law  of  interstate 
commerce,  as  recognized  and  enforced  at  the  time  of  its  en- 
actment. Contracts  in  interstate  commerce  and  subject  as 
such  to  the  regulating  power  of  congress,  in  the  absence  of 
congressional  regulation,  are  controlled  by  the  rules  of  the 
common  law.^ 

There  are  no  common-law  crimes  in  the  United  States,  and 
common-law  contracts  in  restraint  of  trade,  that  is  in  gen- 
eral restraint  of  trade,  are  not  illegal  except  in  the  sense  that 
the  law  will  not  enforce  them.  "It  does  not  prohibit  the  mak- 
ing of  such  contracts;  it  merely  declines  after  they  have  been 
made  to  recognize  their  validity. ' '  - 

This  statute  of  1890,  therefore,  enforces  rather  than  changes 
the  common  law,  in  that  it  makes  contracts  in  restraint  of 
trade  in  interstate  commerce  both  illegal  and  criminal. 

It  was  declared  by  the  supreme  court  however  in  the  Debs 
ease,^  that  the  power  of  the  national  government  over  inter- 
state commerce  and  its  right  to  invoke  the  power  of  the  courts 
to  remove  any  obstructions  to  such  commerce  did  not  depend 
upon  the  statute  of  1890,  but  on  the  broader  ground  of  the 
attributes  of  sovereignty  possessed  by  the  goA^ernment  within 
the  limit  of  its  enumerated  powers.  The  national  govern- 
ment was  therefore  empowered,  irrespective  of  the  statute, 
to  protect  interstate  commerce  and  the  right  of  the  citizens 
to   freely   engage  therein   against   injurious   combinations   in 

the    Payne-Aldrich    Act,    and    are  diverse     rulings     in     the     circuit 

therefore  still  in  force.      (See  Sees.  courts,   but   it   was   not  definitely 

73,  77,  3rd  Comp.  Stat.  3202.)  decided  by  the  supreme  court  un- 

1  See  "Western  Union  Tel.  Co.  v.  til    1901    that   interstate   commer- 

Call,  §  46,  supra.     '  cial   transactions   were   subject  to 

It  was  said  by  the  court  in  the  the  rules  of  the  common  law  ex- 
Standard    Oil    Case    that    the    de-  cept  so  far  as  they  were  modified 
bates    showed    the    doubt    as    to  by  congressional  enactment, 
whether  there  was  a  common  law  2  Lord  Bowen  in  Mogul  Steam- 
of  the  United   States  which   gov-  ship   Co.   v.   Macgregor,    23   Q.   B. 
erned  the  subject  which  in  the  ah-  Div.  598  (1889). 
sence    of    legislation    was    among  3 153  U.  S.  564,  39  L.  Ed.  1092 
the  influences  leading  to  the  pas-  (1895). 
sage  of  the  act.     There  had  been 


§    75]     BUSINESS   COMBINATIONS   IN   INTERSTATE   COMMERCE.  121 

restraint  of  trade  or  monopolies,  and  to  invoke  the  powers  of 
a  court  of  equity  for  that  i)urpose.  It  seems  also  that  there  is 
&  jurisdiction  in  e(iuity  irresi)ective  of  the  statute,  which  may 
be  invoked  by  private  citizens  on  general  principles  of  equity 
jurisprudence,  to  afford  preventive  relief  against  threatened 
injury  from  any  unlawful  agroeiiient  combination  or  conspir- 
acy in  restraint  of  trade  in  interstate  commerce.^ 

It  would  therefore  follow  that  without  the  statute  of  1890, 
or  if  that  statute  was  repealed,  the  public  interests  and  private 
property  rights  could  be  protected  by  the  civil  courts  against 
injurious  combinations  in  interstate  commerce. 

§  75  (67).  Constitutionality  of  the  act. — The  constitutional- 
ity of  the  Anti-Trust  Act  has  been  sustained  by  the  supreme 
court.  Even  under  its  early  construction  in  the  Freight  Associa- 
tion cases,  that  it  not  only  enforced  the  common  law  but  cre- 
ated a  new  rule  of  action,  the  act  was  adjudged  not  violative  of 
the  freedom  of  contract  guaranteed  by  the  fifth  amendment 
of  the  constitution  of  the  United  States.-  The  court  said  that 
notwithstanding  the  general  liberty  of  contract  possessed  by 
citizens  under  the  constitution,  there  were  many  kinds  of  con- 
tracts which  were  not  in  themselves  immoral  or  mala  in  sc, 
which  may  yet  be  prohibited  by  the  legislatures  in  the  states, 
or  in  certain  cases  by  congress.  The  power  existed  in  con- 
gress and  the  statute  was  the  legitimate  exercise  of  the  power 
of  congress  to  regulate  interstate  commerce,  and  the  question 
for  the  court  was  one  of  power  only  and  not  of  policy,  as  the 
latter  was  the  one  determined  by  congress. 

Under  the  later  construction  of  the  act,^  whereunder  it  is 
brought  in  harmony  with  the  common  law  and  enforces  rather 
than  changes  the  common  law  of  restraint  of  trade,  any  possi- 
ble question  of  the  validity  of  the  statute  is  removed,  as  its 
whole  purpose  is  directed  to  the  protection  of  the  individual 
freedom  of  contract. 

1  See  Gulf,  Colo.  &  S.  F.  R.  Co.  v.  1898,  and  43  L.  Ed.  259;  and  Ad- 
Miami  S.  S.  Co.,  Fifth  Circuit  dyston  Pipe  &  Steel  Co.  v.  United 
Court  of  Appeals,  30  C.  C.  A.  142,  States,  175  U.  S.  211,  44  L.  Ed. 
1.    c.    156,    and    86    Fed.    407,    de-  136,  decided  in  1S99. 

cided  in  189S;  see  supra.  §  43.  3  See  Standard  Oil  Case,  221  U. 

2  See    United     States    v.    Joint      S.   1,   55  L.   Ed.  (1911). 

TraflSc  Association,  171  U.  S.  505, 


122         BUSINESS    COMBINATIONS   IN   INTEESTATE    COMMERCE.     [§    76 

§  76.  Railroads  included  in  the  act. — The  first  important 
enforcement  of  the  act  was  in  relation  to  the  Railroad  Freight 
Associations,  in  1S97  and  1899.^  It  was  strongly  urged  that  the 
act  did  not  apply  to  railroads  as  they  were  not  named  therein 
and  the  combinations  of  railroads  had  been  specifically  regu- 
lated by  the  Interstate  Commerce  Act.  It  was  further  urged 
that  one  house  of  congress  had  refused  to  include  the  railroads 
in  the  act.  This  question  was  presented  to  the  court  before 
the  amendments  of  the  Interstate  Commerce  Act  had  made 
effective  the  public  regulation  of  the  reasonableness  of  rates, 
and  after  the  decision  in  the  Knight  case,-  which  had  created 
grave  doubts  as  to  the  efficacy  of  the  act  in  the  control  of 
monopolies  in  the  manufacturing  industries  in  the  states.  It 
was  also  claimed  in  these  railroad  cases  that  the  associations 
were  only  for  the  purpose  of  securing  a  reasonable  stability 
in  rates  and  that  the  act  of  1890  had  no  application  to  other 
than  an  unreasonable  restraint  upon  trade. 

The  court,  however,  held  that  transportation  was  commerce, 
that  the  Interstate  Commerce  Act  and  Anti-Trust  Act  were 
not  inconsistent,  that  both  statutes  could  stand  together,  and 
that  railroads  were  therefore  included  in  the  Anti-Trust  Act. 

In  the  later  of  these  cases,  that  of  the  Northern  Securities 
Company,^  it  was  held,  four  judges  dissenting,  and  Justice 
Brewer  concurring  in  a  separate  opinion,  that  a  New  Jersey 
corporation  organized  as  a  "holding  company"  to  hold  the 
shares  of  competing  interstate  railroads,  was  an  illegal  combi- 
nation in  restraint  of  interstate  commerce. 

Although  the  construction  of  the  act  adopted  in  the  prevail- 
ing opinion  in  the  two  earlier  of  these  cases  has  not  been  fol- 
lowed,* the  decision  that  the  railroads  are  included  in  the 
prohibitions  of  the  act  has  not  been  affected.  It  would  seem 
from  these  cases,  and  particularly  from  the  language  of  Justice 
Brewer  in  the  concurring  opinion  in  the  Northern  Securities 
case,  that  under  any  construction  of  the  act,  any  combination 

1  See  Freight  Association  cases,  2  United   States  v. '  Knight   Co., 

166    U.    S.    290,    41    L.    Ed.    1007  156  U.  S.  1,  39  L.  Ed.  325   (1895). 

(1897),    Justices    White,     Shiras,  s  United  States  v.  Northern  Se- 

Field  and   Gray  dissenting.     The  curities  Co.,  193  U.  S.  197,  47  K 

Joint  Traffic  Association  case,  171  Ed.  679  (1904). 

U.  S.  504,  43  L.  Ed.  259   (1898).  4  See  §  77,  infra. 


§    77]     BUSINESS   COMBINATIONS   IN    INTERSTATE    COMMERCE.  123 

of  interstate  railroads  resulting  in  the  substantial  suppressioii 
of  competition  would  be  violative  of  the  act. 

§  77.  A  reasonable  construction,  and  reasonable  restraints 
of  trade  distinguished. — In  tliese  froiglit  association  cases, 
that  is,  in  the  Trans-Missouri  Freight  Association  and  the 
Joint  Traffic  Association  cases,  which  were  decided  in  1807 
and  1898,  it  Avas  contended  that  the  associations  only  aimed 
to  secure  reasonable  rates,  and  that  therefore  the  attempted 
suppression  of  competition  and  unified  control  was  in  itself 
not  an  unreasonable  restraint  of  trade.  The  majority  of  the 
court,  four  judges  dissenting,  held  that  the  prohibition  of  the 
act  applied  to  any  restraint  whether  reasonable  or  unreason- 
able.^ The  prevailing  opinion  held  that  the  proliibition  of 
the  act  was  not  the  limit  of  the  restraint  of  trade  as  it  was 
understood  at  common  law,  but  applied  to  any  restraint 
whether  it  would  be  deemed  reasonable  or  unreasonable  at 
common  law. 

In  the  later  case  of  the  Northern  Securities  Company,  de- 
cided in  1904,  Justice  Brewer,  who  had  concurred  in  the  pre- 
vailing opinion  of  the  Freight  Association  cases,  filed  a  con- 
curring opinion,-  wherein  he  said  that  while  his  conviction 
was  not  disturbed  that  the  former  cases  were  correctlv  de- 


1  Justice  White  filed  a  dissent- 
ing opinion  (Justices  Field,  Gray 
and  Sliiras  concurring),  saying, 
"There  can  be  no  doubt  that  rea- 
sonable contracts  cannot  be  em- 
braced within  the  provisions  of 
the  statute  if  it  be  interpreted  by 
the  light  of  the  supreme  rule  com- 
manding that  the  intention  of  the 
law  must  be  carried  out.  and  it 
must  be  so  construed  as  to  afford 
the  remedy  and  frustrate  the 
wrong  contemplated  by  its  enact- 
ment. 

"The  plain  intention  of  the  law 
was  to  protect  the  liberty  of  con- 
tract and  freedom  of  trade.  "Will 
this  intention  not  be  frustrated  by 
a  construction  which,  if  it  does  not 
destroy,  at  least  gravely  impairs. 


both  the  liberty  of  the  individual 
to  contract  and  the  freedom  of 
trade?  If  the  rule  of  reason  no 
longer  determines  the  right  of  the 
individual  to  contract  and  secures 
the  validity  of  contracts  upon 
which  trade  depends  and  results, 
what  becomes  of  the  liberty  of  the 
citizens  or  the  freedom  of  trade? 
Secured  no  longer  by  the  law  of 
reason,  all  these  rights  become 
subject,  when  questioned,  to  the 
mere  caprice  of  judicial  authority. 
Thus,  a  law  in  favor  of  freedom  of 
contract,  it  seems  to  me,  is  so  in- 
terpreted as  to  gravely  impair  that 
freedom." 

2  Four  judges  dissented,  so  that 
his  concurrence  was  necessary  to 
constitute  a  majority  of  the  court. 


124         BUSINESS    COMBINATIONS   IN   INTERSTATE    COMMERCE.     [§    77 

cided,  he  thought  that  in  some  respects  the  reasons  given  for 
the  judgment  could  not  be  sustained;  and  that  instead  of 
holding  that  the  Anti-Trust  Act  included  all  contracts  in 
restraint  of  interstate  trade,  reasonable  or  unreasonable,  the 
ruling  should  have  been  that  the  contracts  there  presented 
^vere  unreasonable  contracts  in  restraint  of  trade,  and  as  such 
within  the  scope  of  the  act.  He  added  that  the  act  was  lev- 
eled at  only  unlawful  restraints  and  monopolies.  Congress 
did  not  intend  to  reach  and  destroy  those  minor  contracts  in 
partial  restraint  of  trade  which  a  long  course  of  decisions  at 
common  law  had  stamped  as  reasonable  and  ought  to  be  up- 
held; the  purpose  rather  was  to  place  the  statutory  prohibi- 
tion with  prescribed  penalties  and  remedies  upon  those  con- 
tracts Avhich  were  in  direct  restraint  of  trade,  unreasonable 
and  against  public  policy. 

In  the  recent  Standard  Oil  and  Tobacco  cases  (1911),  this 
construction  of  the  act  favored  by  Justice  Brewer  has  been 
in  effect  adopted  by  the  court. ^  That  is,  the  act  is  to  be  con- 
strued in  view  of  the  common  law  as  to  restraints  of  trade, 
and  the  "rule  of  reason"  is  applied  in  determining,  as  in  all 
other  judicial  controversies,  the  application  of  the  law,  as 
declared  in  the  statute,  to  the  facts  of  the  contract  or  com- 
bination involved. 

It  seems  a  clear  misconception  of  the  rule  declared  in  these 
decisions  to  infer  that  a  direct  restraint  upon  the  freedom  of 
interstate  commerce,  or  an  attempt  to  monopolize  interstate 
commerce,  can  be  reasonable  in  any  sense.  "Reason  is  the 
life  of  the  law,"  said  Lord  Coke.  "Nay,  the  common  law  it- 
self is  nothing  but  reason. "  - 

1  .Justice   Harlan   dissenting.  by  separating  the   language  used 

2  The  ruling  or  dictum  of  the  in  the  opinions  in  the  Freight  As- 
court  in  the  Freight  Association  sociation  and  Joint  Traffic  Cases 
Cases  as  to  the  construction  of  the  from  the  contest  and  the  subject 
statute  in  this  respect  must  be  con-  and  tho  parties  with  which  the 
sidered  definitely  overruled  by  the  cases  were  concerned,  it  may  be 
decisions  in  the  Standard  Oil  and  conceived  that  the  language  re- 
Tobacco  Cases.  Thus  in  the  ferred  to  conflicts  with  the  con- 
Standard  Oil  case  the  court  said:  struction  which  we  give  the  stat- 
"And  in  order  not  in  the  slight-  ute,  they  are  necessarily  now 
est  degree  to  be  wanting  in  frank-  limited  and  qualified." 

ness,  we  say  in  so  far,  however,  as 


§    7bj     liUtJKNESS    COMlil NATION'S    IN    iNTEliSTATE    COMMERCE.  123 

In  the  American  Tobacco  case/  the  court  said,  (iuotinjj 
from  the  Joint  Traflic  Association  case,-  that  tlie  act  of  con- 
gress must  have  a  reasonable  construction  or  else  there  would 
scarcely  be  an  agreement  or  contract  between  business  men 
that  could  not  be  said  to  have,  directly  or  remotely,  some 
bearing  on  interstate  commerce  which  possibly  would  restrain 
it.  The  court  said  further,  "applying  the  rule  of  reason  to 
the  construction  of  the  statute  which  was  held  in  the  Stand- 
ard Oil  case,  that  as  the  words  restraint  of  trade  at  common 
law  and  in  the  law  of  this  country  at  the  time  of  the  adoption 
of  the  Anti-Trust  Act  only  embraced  acts  or  contracts  or 
agreements  or  combinations  which  operated  to  the  prejudice 
of  the  public  interest  by  unduly  restricting  competition,  or 
unduly  obstructing  the  due  course  of  trade,  or  which  either 
because  of  their  inherent  nature  and  effect,  or  because  of 
the  evident  purpose,  etc.,  injuriously  restrained  trade,— that 
the  words  so  used  in  the  statute  w^ere  designed  to  have  and 
did  have  but  a  like  significance."  It  was  therefore  pointed 
out  that  the  statute  did  not  forbid  or  restrain  the  power  to 
make  normal  and  usual  contracts,  or  to  further  trade  by  re- 
sorting to  all  normal  methods  by  agreements  or  otherwise  to 
accomplish  such  purpose. 

§  78.  Direct  and  incidental  restraint  of  trade.— The  applica- 
tion of  the  light  of  reason  to  the  determination  of  whether  a 
contract  or  combination  is  in  restraint  of  trade  in  interstate 
commerce,  does  not  mean  any  more  than  it  did  at  common 
law,  that  such  determination  is  left  to  any  arbitrary  dis- 
cretion of  the  courts,  or  to  any  paternal  discrimination  be- 
tween good  and  bad  trusts.  On  the  contrary,  it  has  been  uni- 
formly held  that  there  is  a  clear  and  sharp  line  of  distinction 
between  the  restraints  wdiich  are  direct  and  those  which  are 
incidental  to  the  exercise  of  a  laAvful  contract.  Thus  while 
the  act  has  been  construed  to  include  combinations  where  the 
direct,  immediate  and  intended  effect  is  for  the  suppression 
of  competition  in  inlerstato  business.^  it  does  not  include 
agreements   and   regulations,   whieli    are   nothing   more   than 

1221   U.    S.   106,    53   L.   Ed.  TTnited  States.  175  U.  S.  211  (1S99) . 

t-j^c^^l)  44  L.  Ed.  139;   Montague  v.  Low- 

2  171    U.    S.    505.   43    L.    Ed.    259  ry,  193  U.  S.  3S   (1904),  48  L.  Ed. 

(1898).  ^"^8. 

sAddyston   Pipe   &   Steel  Co.  v. 


126         BUSINESS    COMBINATIONS   IN   INTERSTATE   COMMERCE.     [§    78 

charges  for  local  facilities  provided  for  the  transaction  of 
commerce  and  which  only  incidentally  affect  interstate  com- 
merce.^ It  is  not  restraint  of  trade  of  itself  that  is  made 
illegal  hy  the  statute,  as  that  may  be  the  incidental  effect  of 
a  A-alid  agreement  or  contract;  but  it  is  the  making  of  the 
contract  which  is  or  is  intended  to  be  directly  in  restraint  of 
trade.- 

The  distinction  is  illustrated  in  the  cases  cited.  In  the 
Addj'ston  Pipe  case,  there  was  a  contract  agreement  for  the 
restraint  of  trade.  In  the  Stock  Yards  case,  there  was  a 
restraint  of  trade  resulting  indirectly  from  the  exercise  by  the 
defendants  of  their  lawful  rights  in  business  associations.  The 
former  was  therefore  obnoxious  to  the  act,  while  the  latter 
was  not.  In  the  Standard  Oil  and  Tobacco  cases,  there  was 
a  finding  that  upon  the  facts  in  evidence  that  there  was  a  di- 
rect combination  for  the  purpose  of  crushing  competition  and 
monopolizing  the  market. 

The  distinction  between  direct  and  incidental  restraint  of 
trade  was  verj^  lucidly  shown  by  Judge  Taft,  then  on  the  cir- 
cuit bench,  in  the  opinion  of  the  court  of  appeals  in  the  sixth 
circuit  in  the  Addyston  Pipe  &  Steel  Company  case,^  in  this: 
In  holding  that  the  contract  in  question  was  violative  of  the 
act  and  was  also  unenforcible  at  common  law,  and  he  laid 
down  the  rule  that  no  contractual  restraint  of  trade  was  en- 
forcible  at  common  law,  unless  it  was  merely  ancillary  to  some 
lawful  contract  involving  some  such  relation  as  vendor  and 
vendee,  partnership,  employer  and  employe,  and  necessary  to 
protect  the  covenantee  in  the  enjoyment  of  the  legitimate 
fruits  of  the  contract,  or  to  protect  him  from  the  damages  of 
unjust  acts  by  the  other  parties.     The  main  purpose  of  the 

1  Hopkins  v.  United  States,  171  fication,  and  subsequent  independ- 
TJ.  S.  578,  43  L.  Ed.  290  (1898);  ent  action  by  the  railroad  corn- 
Anderson  V.  United  States,  171  U.  panies  in  the  adoption  of  a  new 
S.  604    (1898),  43  L.  Ed.  300.  classification  recommended  by  the 

2  In  the  opinion  of  Attorney-  committee,  where  there  is  no  evi- 
General  Griggs  to  the  Interstate  dence  that  any  railroad  company 
Com.  Com.  of  December  30,  1899,  acted  under  compulsion  of  a  com- 
(Reports  of  Commission  for  1899,  bination,  does  not  show  a  combina- 
page  16),  it  is  said  that  the  conr  lion  or  conspiracy  within  the 
sulfation  of  the  representatives  of  meaning  of  the  act. 

interstate  railroads   in   committee  2  29   C.   C.  A.   141,   85   Fed.   271 

concerning  the  changes  in.  classi-       (1898). 


§    78J     BUSINESS    COMBINATIONS   IN    INTERSTATE    COMMERCE.  ]-< 

contracts  suggests  the  measure  of  the  protection  needed  and 
furnishes  a  sufficiently  uniform  standard  for  determining  the 
reasonableness  and  validity  of  the  restraint.  But  where  the 
object  of  both  parties  in  making  the  contract  is  merely  to 
restrain  competition  and  enhance  and  maintain  prices,  the 
contract  is  void  and  unreasonable,  and  where  made  in  inter- 
state commerce  is  violative  of  the  act  of  1890.^ 

The  suggestion,  therefore,  that  the  construction  of  the  act  in 
the  Standard  Oil  and  Tobacco  cases  means  the  emasculation 
of  the  act  and  its  subjection  to  the  arbitrary  discretion  of  the 
courts,  seems  clearly  unfounded.  Whether  the  act  only  en- 
forced the  common  law  as  to  undue  restraint  of  trade,  or  laid 
down  a  new  rule,  that  all  restraints  of  trade  in  interstate  com- 
merce were  prohibited,  under  either  construction  the  courts 
would  be  compelled  to  determine  in  each  case,  whether  the 
combination  in  question  involved  a  direct  or  an  incidental 
interference  with  interstate  commerce.  In  view  of  the  fact 
that  the  adjudged  cases  show  that  the  courts  have  been  com- 
pelled to  give  the  act  a  reasonable  construction,  as  was  said 
in  the  Joint  Traffic  case,  it  would  seem  that  the  distinction  be- 
tween the  earlier  and  the  later  construction  of  the  act  is 
academic  rather  than  practical.^ 

In  so  far  as  a  definite  formulation  of  this  distinction  be- 
tween direct  and  incidental  restraint  of  trade  can  be  made, 
in  view  of  the  infinite  complexity  of  business  associations  and 
transactions,  it  may  be  said  that  a  business  contract,  directly 
affecting  interstate  commerce,  which  would  be  unenforcible 
at  common  law  as  in  restraint  of  trade  and  therefore  against 
public  policy,  whatever  the  subject,  would  be  violative  of  the 
Anti-Trust  Act  and  subject  to  its  penalties.^     On  the  other 

1  In    this    Addyston    Pipe    case  2  See     cases     wherein     act    has 

there  was  an  allotment  of  territory  been  construed  and  applied.  Infra, 

comprising    a   large    part    of    the  part  II,  §  .    As  to  enforcement 

United  States  among  a  number  of  of  criminal  provision  of  act,  see 
companies  engaged  in  the  manu-  supra,  §  45.5  et  scq.  See  also  ad- 
facture  of  iron  pipe;  and  in  that  dress  of  Hon.  William  B.  Horn- 
territory  competition  was  elimin-  blower  of  New  York,  before  Am. 
ated  through  the  allotment  of  terri-  Bar  Ass'n,  1911,  containing  a  clear 
tory.  and  through  a  system  of  pre-  and  exhaustive  analysis  of  these 
tended  bids,  giving  the  appearance  decisions  of  the  supreme  court 
of  active  competition  at  public  let- 
tings,  when  there  was  none. 


]28 

hand  a  business  contract  relating  to  interstate  commerce,  what- 
ever its  subject,  which  would  be  valid  and  enforcible  at  com- 
mon law  as  imposing  only  a  reasonable  restraint,  and  as  an- 
cillary to  a  valid  contract  or  valid  business  purpose,  would  not 
be  violative  of  the  Federal  Act. 

§  79.  Suppression  of  competition  must  be  substantial  to  be 
a  "restraint  of  trade." — Not  only  must  the  suppression  of 
competition  be  direct,  and  not  merely  incidental  to  a  lawful 
contract,  but  it  must  be  substantial  in  character,  and  must  be 
a  direct  and  immediate  effect  of  the  transaction  complained 
of,  in  order  to  constitute  a  restraint  of  trade  or  combination 
or  conspiracy  condemned  by  the  act.  This  principle  was  illus- 
trated in  the  so-called  Union  Pacific  and  Southern  Pacific 
merger  case,  wherein  the  government  claimed  that  the  pur- 
chase of  the  Union  Pacific  Railroad  of  some  forty-six  per  cent. 
of  the  stock  of  the  Southern  Pacific  was  an  unlawful  combina- 
tion in  restraint  of  trade  violative  of  the  Anti-Trust  Act.  The 
circuit  judges  of  the  eighth  circuit  in  an  opinion  by  Judge 
Adams  -  said  that  the  direct  competitive  business  of  the  Union 
Pacific  and  Southern  Pacific  was  too  insignificant  to  sustain 
the  charge  and  that  the  proof  showed  that  the  immediate  and 
actuating  intent  of  the  Union  Pacific  Company  in  requiring 
the  control  of  the  operation  of  the  Southern  Pacific  was  to 
secure  the  permanent  working  and  reliable  combination  at 
Ogden  over  the  existing  road  of  the  Southern  Pacific  to  the 
Pacific  coast  for  its  through  traffic. 

The  court  said,  the  suppression  of  competition  in  this  in- 
finitesimal small  proportion  of  the  business  of  both  companies 
was  not  a  substantial  or  natural  consequence  and  did  not 
amount  to  a  direct  or  substantial  restraint  of  interstate  or  in- 
ternational commerce. 

The  principle  thus  declared,  that  interference  with  inter- 
state commerce  must  be  substantial,  was  declared  by  the  su- 
preme court  in  the  Packet  Company  Case.^     The  court  said 

1  See  opinion  of  circuit  judges  R.  R.  et  al.,  187  Fed.  102  (June, 
of  Third  circuit,  June,  1911,  ap-  1911),  Justices  Sanborn  and  Van- 
plying  the  Standard  Oil  and  To-  deventer  concurring,  Hook,  J.,  dis- 
bacco   decisions   in   Powder  Trust  senting. 

case,    188    Fed.    127.      See    infra,  s  Cincinnati,  etc.,  Packet  Co.  v. 

§  448.  Bay,  200  U.  S.  179,  50  L.  Ed.  428 

2  United  States  v.  Union  Pacific       (190C). 


§    hOJ     BUSINESS    COMBINATIONS   IN    INTERSTATE    COMMERCE.  12iJ 

that  the  interference,  if  any,  Avith  interstate  commerce  con- 
templated by  a  contract  for  the  sale  of  certain  river  craft 
which  permitted  a  suspension  of  payment  of  installments  of 
the  purchase  price  in  case  of  serious  competition  in  the  freight 
and  passenger  traffic  over  a  route  between  two  named  Ohio 
ports  on  the  Ohio  river,  and  required  the  vendors  to  withdraw 
from  such  competition  for  five  years,  was  too  insignificant  to 
render  the  contract  invalid  under  the  Anti-Trust  Act.  The 
court  said  it  will  accomplish  no  public  purpose  but  simply 
would  provide  a  loophole  of  escape  for  persons  inclined  to 
elude  performance  of  their  undertakings,  if  the  sale  of  a  busi- 
ness and  temporary  -withdrawal  of  the  seller  necessary  in 
order  to  give  the  sale  effect,  were  declared  illegal  in  every 
ease  wherein  a  nice  scrutiny  would  discover  that  the  covenant 
possibly  might  reach  beyond  the  state  line. 

§  80.  The  modern  law  of  restraint  of  trade. — The  modern 
law  of  restraint  of  trade  has  materially  modified  the  earlier 
doctrines  of  the  common  law  in  its  adaptation  to  modern  con- 
ditions. The  Avorld  has  grown  distinctly  smaller  through  the 
forces  of  steam  and  electricity,  and  the  earlier  doctrines  of  the 
common  law  have  been  modified  accordingly.  The  validity  of 
a  contract,  therefore,  under  the  rules  of  the  English  as  Avell 
as  the  American  courts,  is  to  test  the  validity  of  a  contract  by 
its  reasonableness  in  view  of  all  the  circumstances  of  the  case, 
irrespective  of  any  arbitrary  rule  as  to  time  or  place.  Thus 
it  was  said  by  the  supreme  court,^  that  the  public  interest  is 
still  the  first  consideration.  To  sustain  a  restraint,  said  the 
court,  it  must  be  found  to  be  reasonable  both  with  respect  to 
the  public  and  to  the  parties,  and  that  it  is  limited  to  wdiat  is 
fairly  necessary  in  the  circumstances  of  the  particular  case 
for  the  protection  of  the  covenantee.  Otherwise,  restraints  of 
trade  are  void  as  against  public  policy.  In  an  earlier  case  it 
was  said  -  that  the  decision  in  IMitehell  v.  Reynolds.  1  P.  Wms. 
181,  is  the  foundation  rule  in  relation  to  the  invalidity  of  eon- 
tracts  in  restraint  of  trade ;  but  it  was  made  under  a  condition 
of  things  and  a  state  of  society  diff ei-ent  from  those  which  now 

1  Dr.  IMiles  Medical  Co.  v.  John  2  Gibbs  v.  Consolidated  Gas  Co., 

D.  Park  &  Sons  Co.,  220  U.  S.  373,      130  U.  S.  396,  32  L.  Ed.  979  (1889)! 
55  L.   Ed.  (1911). 

9 


130         BUSINESS    COMBINATIONS   IN   INTERSTATE   COMMERCE.     [§    81 

prevail,  and  the  rule  laid  down  is  not  regarded  as  inflexible 
and  lias  been  considerably  modified.  The  public  welfare  is  first 
considered,  and  if  that  be  not  involved,  and  the  restraint  upon 
one  party  is  not  greater  than  the  protection  of  the  other  party 
requires,  the  contract  may  be  sustained.  The  question  is  as 
to  whether  under  particular  circumstances  of  the  case  and 
the  nature  of  the  particular  contract  involved  the  contract  is 
or  is  not  unreasonable. 

§  81.  Illegal  combinations  in  interstate  commerce. — A  com- 
modity may  be  the  subject  of  an  illegal  agreement  in  restraint 
of  trade,  in  violation  of  the  act,  although  it  is  still  subject  to 
the  taxing  power  of  a  state.^ 

A  combination  is  subject  to  the  act  which  includes  the  sup- 
pression of  competition  in  the  purchase  of  cattle  in  different 
states,  and  also  the  suppression  of  competition  in  the  sale  of 
meats  in  different  states,  where  all  these  acts  were  part  of  a 
single  purpose  to  control  and  monopolize  commerce.  Com- 
merce between  the  states,  the  court  said,  was  not  a  technical 
legal  conception,  but  a  practical  one  drawn  from  the  course  of 
business.  When  cattle  are  sent  for  sale  from  a  place  in  one 
state  with  the  expectation  that  they  will  end  their  transit 
after  purchase  in  another,  and  when  in  effect  they  do  so  with 
only  the  necessary  interruption  to  find  a  purchaser  at  the  stock- 
yards, and  when  this  is  the  typical  and  constantly  recurring 
course,  the  current  thus  existing  is  a  current  of  commerce 
among  the  states,  and  the  purchase  of  the  cattle  is  a  part  and 
incident  of  such  commerce.^  The  court  could  not  order  the 
defendants  to  compete,  but  it  could  enjoin  them  from  combin- 
ing not  to  compete. 

"Where  the  necessary  effect  of  a  combination  is  to  stifle  or 
directly  or  substantially  to  restrict  competition  in  interstate 
commerce  it  is  unlawful  under  the  act;  but  if  the  necessary 

1  Addyston  Pipe  &  S.  Co.  v.  i>ei:itioii  were  in  effect  confessed 
United  States,  supra;  United  by  the  demurrer  whereon  the  in- 
states v.  Swift,  122  Fed.  529  junction  was  granted.  The  prac- 
(1903).  tical  dii!iculty  of  proving  an  agree- 

2  Swift  V.  United  States,  196  U.  ment  not  to  compete  from  the  fact 
S.  375,  49  L.  Ed.  518  (1906).  In  of  non-competition  was  not  pre- 
this  case  the  facts  charged  in  the  sented. 


§    82]     BUSINESS    COMBINATIONS   IN    INTERSTATE   COMMERCE.  131 

effect  is  but  meidental  and  indirectly  to  restrict  competition 
while  its  chief  result  is  to  foster  the  trade  and  increase  the 
busiuess  of  those  who  make  and  operate  it,  it  is  not  in  viola- 
tion of  the  act.  A  combination  between  a  corporation  and  its 
officer  or  agent  in  violation  of  the  Anti-Trust  Act,  cannot  be 
formed  by  the  tlioughts  or  acts  of  the  officer  or  agent  alone 
without  the  conscious  participation  in  it  of  any  other  officer 
or  agent  of  the  corporation,  as  a  union  of  two  or  more  minds 
is  indispensable  to  an  unlawfid  combination.^ 

§  82.  Complete  suppression  of  competition  not  essential. — 

Where  a  contract  is  for  the  direct  suppression  of  competition, 
such  as  was  shown  in  the  Addyston  Pipe  case,  it  is  not  neces- 
sary that  the  trade  in  the  commodity  be  completely  suppressed 
in  order  to  render  the  combination  one  in  restraint  of  trade. 
It  is  sufficient  if  the  contract  operates  in  restraint  of  trade.- 

In  determining  whether  an  association  of  manufacturers  or 
dealers  constitutes  a  combination  in  restraint  of  trade  in  in- 
terstate commerce,  the  court  will  consider  the  whole  agree- 
ment in  all  its  provisions.-  Thus  an  agreement  between  the 
manufacturers  of  tiles  not  to  sell  unset  tiles  to  any  one  other 
than  members  at  less  than  the  list  prices,  which  were  fifty  per 
cent,  higher  than  the  prices  to  members,  and  membership  was 
dependent  on  conditions,  one  of  which  was  the  carrying  of  at 
least  three  thousand  dollars  worth  of  stock,  was  held  to  con- 
stitute part  of  a  scheme  involving  the  enhancement  of  prices, 
and  that  the  whole  thing  was  so  bound  together  that  the  trans- 
actions within  the  state  were  inseparable  and  became  part  of 
a  scheme  which  really  amounted  to  and  was  a  combination  in 
restraint  of  trade  in  interstate  commerce.* 

It  is  not  necessary,  however,  that  a  combination  should  by 
its  terms  refer  to  interstate  commerce,  and  it  is  enough  if  its 
purposes  and  effect  are  necessarily  to  restrain  such  commerce. 

1 A    contract    which    one    com-  Coal  Co.  v.  U.  S.,  173  Fed.  737,  C. 

pany  makes  with  another  to  be  its  C.  A.  8th  Circuit    (1909). 

sole  agent  for  the  sale  of  its  prod-  2  See      Addyston      Pipe      case, 

nets,    is   not    in    violation    of   the  supra. 

act.     Virtou  v.  Creamery  Package  s  Montague  v.  Lowry,  193  U.  S. 

Mfg.  Co.,  C.  C.  A.  8th  Circuit,  179  38,  48  L.  Ed.  GOS. 
Fed.    115    (1910);    Union    Pacific 


132         BUSINESS    COMBINATIONS   IN   INTERSTATE    COMMERCE.     [§    83 

If  it  were  otherwise,  all  combinations  in  restraint  of  inter- 
state commerce  could  be  so  expressed  in  words  as  to  avoid  the 
statute.^ 

§  83  (72).  Monopoly  within  the  meaning  of  the  act. — The 

second  section  of  the  act  makes  unlawful  and  punishable  the 
monopolizing  or  attempting  to  monopolize,  or  combining  or 
conspiring  to  monopolize  any  part  of  trade  or  commerce  among 
the  several  states. 

This  section  has  been  extensively  discussed.  Thus  it  was 
early  said  in  a  decision  by  Justice  Jackson,  then  circuit  judge 
and  afterwards  of  the  supreme  bench,^  that  it  was  very  cer- 
tain that  congress  did  not  by  this  enactment  attempt  to  limit 
the  amount  of  property  that  a  private  citizen  might  acquire 
by  legitimate  and  lawful  methods.  In  other  words,  that  is  was 
not  the  magnitude  of  the  business,  but  the  abuses  with  the 
incidental  and  direct  powers  thereby  acquired  which  consti- 
tutes a  monopoly  or  attempt  to  monopolize. 

The  difficulty  in  the  construction  of  this  section  grew  out  of 
the  legal  meaning  of  the  term  ''Monopolj^,"  which  was  a 
'  *  grant  of  exclusive  right  from  the  sovereign  power. "  ^  In 
the  legal  sense,  therefore,  there  must  be  an  exclusive  right  or 
privilege  on  one  side  and  a  restriction  or  restraint  on  the  other 
which  operates  to  prevent  the  exercise  of  the  right  or  liberty 
open  to  the  public  before  a  monopoly  is  secured. 

The  meaning  of  the  second  section  was  exhaustively  dis- 
cussed by  the  supreme  court  in  the  Standard  Oil  case.*  The 
court  there  said  that  nowhere  at  common  law  could  there  be 
found  a  prohibition  against  the  creation  of  a  monopoly  by  an 
individual;  that  is,  monopoly  in  the  concrete  could  only  arise 
from  the  act  of  the  sovereign  power,  and  such  sovereign  power 
being  restrained,  prohibitions  as  against  individuals  were  not 
directed  against  the  creation  of  monopoly,  but  only  applied 
to  such  acts  in  relation  to  particular  subjects  as  to  which  it 

1  Gibbs  V.  McNealy,  55  C.  C.  A.  34th    Blackstone,    159;    Case   of 
70;  118  Fed.  Rep.  120    (1902).  Monopolies  (1601),  11  Coke  Reps. 

2  In  re  Green,  52  Fed  Rep.  104  84     B;      Habits     of     Monopolies 
(1892);    citing  Morgul   Steamship  (1623).  21  Jas.  I,  C.  3. 

Co.     V.     Macgregor,     App.     Cases,  *  See  supra,   §  77. 

part  1,  p.  25. 


§    83]     BUSINESS    COMBINATIONS    IN    INTERSTATIi    COMMEUCE.  133 

was  deemed  if  not  restrained,  some  of  the  consequences  of 
monopoly  might  result.  The  word  "monopolize"  was  there- 
fore used  in  this  section  in  order  to  reach  every  act  bringing 
about  tlie  prohibited  results.  Any  ambiguity  in  the  term  was 
therefore  dissipated  in  the  light  of  the  previous  history  of  the 
law  of  restraint  of  trade  and  the  indication  which  it  gives  of 
the  practical  evolution  by  which  monopoly  and  the  acts  which 
produce  the  same  results  as  monopoly,  that  is,  the  undue 
restraint  of  the  due  course  of  trade,  all  come  to  be  spoken  of 
as  and  to  be  indeed  synonymous  with  restraint  of  trade.  The 
court  said  further  that  when  the  second  section  is  thus  harmo- 
nized with  and  intended  to  be  a  complement  of  the  first,  it  be- 
comes obvious  that  the  criterion  to  be  resorted  to  in  any  given 
case  for  the  purpose  of  ascertaining  whether  violation  of  the 
section  has  been  created,  is  the  rule  of  reason  guided  by  the 
established  law,  and  by  the  plain  duty  to  enforce  the  prohibi- 
tions of  the  act,  and  thus  the  public  policy  which  its  restrictions 
were  obviously  intended  to  subserve. 

It  therefore  follows  that  while  monopoly  in  this  country,  in 
the  strict  legal  sense,  can  only  be  possible  in  case  of  rights 
under  patent  and  copyright  laws,  in  this  second  section  of  the 
act  of  1890  the  term  is  used  in  the  sense  of  attempting  to  ob- 
tain a  control  of  the  market  and  the  suppression  of  competition 
through  unlawful  means,  that  is,  through  restraint  of  trade. 
This  is  substantially  the  construction  given  this  section  in  the 
different  circuit  courts  and  the  courts  of  appeal.  Thus  it  was 
said  by  the  circuit  court  of  appeals  of  the  eighth  circuit,^  that 
the  purpose  of  the  second  section  was  the  same  as  that  of  the 
first,  to  prevent  the  restriction  of  competition,  and  should  re- 
ceive the  same  interpretation.  It  was  not  the  purpose  of  the 
second  section  to  prohibit  and  punish  the  customary  and  uni- 
versal attempts  of  all  manufacturers  and  traders  engaged  in 
interstate  commerce  to  monopolize  a  fair  share  of  it  in  the 
necessary  enlargement  of  their  business,  while  their  attempts 
left  their  competitors  free  to  make  successful  endeavors  of  the 
same  kind. 

This  was  the  same  construction  given  to  the  act  by  Justice 
Jackson  in  the  case  above  referred  to,  where  it  was  held  that 
the  payment  of  rebates  to  parties  who  dealt  exclusively  with 
iSee  Continental  Tobacco  Case,  125  Fed.  Rep.  454   (1903). 


134         BUSINESS    COMBINATIONS    IN    INTERSTATE    COMMERCE.     [§    84 

the  company  did  not  constitute  an  attempt  to  monopolize,  as 
the  purchaser  was  left,  at  liberty  to  buy  where  he  pleased,  and 
all  other  sellers  of  the  article  Avere  left  unrestrained  in  offer- 
ing greater  inducements.^ 

§  84  (75).  No  application  to  commerce  v/ithin  a  state. — The 

limitation  of  the  jurisdiction  of  congress  to  commerce  among 
the  states  was  illustrated  in  the  first  case  presented  to  the  court 
involving  the  construction  of  the  act.  That  was  the  Sugar 
Trust  case  in  1895.^  In  this  ease  the  court  held  that  the  stat- 
ute did  not  reach  a  manufacturing  company  which  was  acquir- 
ing by  the  purchase  of  the  stock  of  other  refining  companies 
through  shares  of  its  own  stock  nearly  complete  control  of  the 
manufacture  of  refined  sugar  in  the  United  States.  The  court 
said  that  manufacture  precedes  commerce,  but  is  not  a  part  of 
it.  The  sale  as  an  incident  of  manufacture,  therefore,  was  dis- 
tinguished from  commerce.  This  decision  disappointed  many 
in  their  anticipations  of  the  effectiveness  of  the  statute,  and 
this  feeling  seems  to  have  been  shared  by  the  supreme  court, 
as  it  was  said  in  the  first  Freight  Rate  case  in  1897,  that  if 
the  act  was  not  applicable  to  railroads,  there  would  be  very 
little  left  for  it  to  apply  to.  While  the  growth  of  combina- 
tions in  interstate  commerce  has  disappointed  these  anticipa- 
tions of  the  ineffectiveness  of  the  statute,  the  court  has  adhered 
to  its  ruling  that  it  has  no  jurisdiction  over  that  part  of  a 
combination  or  agreement  which  relates  Avholly  to  commerce 
within  a  state  by  reason  of  the  fact  that  the  combination  also 
covers  the  regulation  of  commerce  which  is  interstate. 

1  Sanborn,  J.,  said  in  United  more.  The  intention  of  congress 
States  V.  Standard  Oil  Co.,  173  was  to  condemn  monopolies,  not 
Fed.  Rep.  177  (1909):  "If  the  based  on  legal  combinations 
necessary  effect  is  only  incidental  among  several,  but  secured  by 
or  indirectly  to  restrict  competi-  single  persons,  natural  or  artifl- 
tion,  while  its  chief  result  is  to  cial;"  and  "that  the  magnitude  of 
foster  the  trade  and  increase  the  the  business  does  not  alone  con- 
business  of  those  who  make  and  stitute  monopoly,  and  that  the 
operate  it,  it  does  not  violate  the  baneful  effect  is  the  same  whether 
law."  Hook,  J.,  concurring  in  the  the  monopoly  comes  as  the  gift  of 
same  case  said  (p.  195):  "The  the  government,  or  is  the  result 
scope  of  the  second  section  conr  of  individual  wrongdoing." 
templates  the  conduct  of  one  per-  2  United  States  v.  Knight  Co.. 
son,  but  the  first  that  of  two  or  15G  U.  S.  1,  39  L.  Ed.  325  (1895). 


§    85]    BUSINESS    COMBINATIONS    IN    INTERSTATE    COMMERCE.         135 

This  fundamental  principle,  which  not  only  controls  the  con- 
struction of  the  act  of  July  2,  1890,  but  also  the  power  of  con- 
gress to  enact  any  legislation  concerning  commercial  combina- 
tions, was  forcibly  illustrated  in  the  case  of  Addyston  Pipe  & 
Steel  Co.,  supra.  The  combination  in  that  case  included  both 
state  and  interstate  commerce.  As  to  such  of  the  defendants 
as  might  reside  and  carrj^  on  business  in  the  same  state  where 
the  pipe  provided  for  in  any  particular  contract  was  to  be 
delivered,  the  sale,  transportation  and  delivery  of  the  pipe  by 
them  under  that  contract  would  be  a  transaction  wholly  within 
the  state,  and  the  supreme  court  said,  modifying  the  judgment 
of  the  circuit  court  of  appeals  in  that  respect,  that  the  statute 
would  not  be  applicable  to  them  in  that  case.  They  might 
make  any  combination  they  choose  with  reference  to  the  con- 
tract, although  it  happened  that  some  non-resident  of  the  state 
finalh^  obtained  it.  In  the  language  of  the  court,  in  brief,  their 
right  to  combine  in  regard  to  a  proposition  for  pipe,  deliver- 
able in  their  own  state,  could  not  be  reached  by  the  federal 
power  derived  from  the  commerce  clause  in  the  constitution. 
A  combination  violative  of  the  act  may  however  include  a 
series  of  acts,  concluded  in  different  states,  when  they  are  part 
of  one  purpose,  as  in  the  purchase  and  shipment  of  cattle  to 
control  and  monopolize  commerce  between  the  states.^ 

§  85  (76).  State  holding  companies. — The  Northern  Securities 
case,  supra,  was  novel  in  that  it  decided  that  the  corporation 
organized  under  the  laws  of  a  state  and  empowered  under  its 
charter  to  hold  the  stock  of  other  corporations,  was  prohibited 
by  this  act  from  holding  the  stock  of  competing  interstate  rail- 
road corporations.  The  illegal  combination  was  founded  upon 
the  fact  of  control  of  competing  railroads  in  a  single  authority 
and  the  resulting  power  of  direct  suppression  of  competition 
through  such  control.  Thayer,  J.,  in  the  circuit  court,  said  that 
a  state  could  not  invest  a  corporation  organized  under  its  laws 
to  do  acts  in  its  name  which  operate  in  restraint  of  trade  and 
commerce,  and  that  the  court  would  not  consider  whether  a 
combination  would  be  of  benefit  to  the  public ;  but  that  a  cor- 
poration organized  under  the  laws  of  a  state  to  hold  the  stocks 
of  competing  interstate  railroad  companies  was  in  violation  of 

1  See  Chicago  Meat  Trust  Case,  supra. 


136         BUSINESS    COMBINATIONS    IN    INTERSTATE    COMMERCE.     [§    85 


the  Aiiti-Trust  Act,  since  it  destroyed  any  active  form  of  com- 
petition l)et\veen  the  two  roads,^  and  it  was  immaterial  that 
each  company  had  its  own  board  of  directors. 

The  holding  corporation  was  condemned  in  this  case,  not 
because  it  was  a  "holding  corporation"  merely,  but  because  it 
held  the  stock  of  subsidiary  corporations  directly  engaged  in 
interstate  commerce,  and  thus  controlled  competition  as  be- 
tween those  companies.  The  act,'  as  such,  has  nothing  to  do 
with  holding  corporations,  where  the  subsidiary  corporations 
are  not  engaged  as  competitors  directly  in  interstate  commerce. 
The  right  of  the  holding  corporation  in  other  cases  depends 
upon  the  authorization  of  its  own  charter  and  the  laws  of  the 
states  whereunder  the  subsidiary  companies  are  organized  and 
do  business. 

The  organization  of  a  holding  corporation  made  for  the  pur- 
pose of  controlling  other  companies  engaged  in  interstate  com- 
merce, though  the  holding  of  the  stocks  of  other  companies  may 
be  duly  authorized  in  its  charter,  may  be  the  most  effective 
means  of  eliminating  competition  and  dominating  an  industry, 
and  thus  may  be  a  very  material  factor  in  the  determination  of 
the  fact  of  restraint  of  trade  and  monopolization  or  attempted 
monopolization   of   the   market.-      Thus   in   the    Standard    Oil 

1120  Fed.  Rep.  721  (1903).  obstacles   to  the  effective  dealing 

2  It  was   said  by  Attorney-Gen-  with  the  trust  problem."     He  ad- 

eral   Wickersham,    in   his   Minner  mitted,  however,   that   intercorpo- 

sota  address,  supra :  rate   holding   was  so   widely   pre- 


"Probably  no  one  thing  has  done 
more  to  facilitate  restraint  of 
trade  and  the  growth  of  monopoly 
than  a  departure  from  the  early 
rule  of  law  that  one  corporation 
cannot  own  stock  in  another. 
That  departure  was  the  most 
baneful  result  of  the  'let  us  alone' 
policy  in  dealing  with  corpora- 
tions to  which  the  country  aban- 
doned itself  during  the  last  thirty 
years  of  the  nineteenth  century. 
The  conditions  which  have  re- 
sulted from  the  exercise  of  the  ex- 
pressly conferred  power  in  a  cor- 
poration to  take  and  hold  stock  in 
another,  present  the  most  serious 


valent  that  justice  to  the  munici- 
pal holders  of  securities  issued  to 
the  public,  based  on  pledged 
stocks,  acquired  and  held  pursu- 
ant to  express  legal  authority, 
"would  require  consideration  to 
be  given  to  their  case  and  such 
exceptions  to  be  made  from  a  pro- 
hibition as  might  be  necessary  to 
their  protection." 

It  seems  that  in  some  cases 
intercorporate  holding  has  been 
directly  caused  by  state  legisla- 
tion requiring  local  incorporation. 
See  also  report  of  National  Secur- 
ities Commission,  1911.  See  Ap- 
pendix. 


§    86]    BUSINESS    COMBIXATIOXS    IN    INTERSTATE    COMMERCE.  137 

case  it  was  held  that  the  orf?anization  of  a  New  Jersey  company 
as  a  holding  company,  authorized  under  its  charter  to  hold  the 
stocks  of  other  companies,  was  iu  itself  an  agency  under  the 
facts  of  that  case  in  effecting  unlawful  restraint  of  trade,  and 
its  dissolution  was  decreed.^  The  same  principle  was  applied 
in  the  American  Tobacco  case. 

§  86.  Restrictive  sales  in  interstate  commerce. — The  distinc- 
tion between  contracts  directly  and  substantially  restricting 
free  competition  and  those  which  only  incidentally  and  indi- 
rectly restrain  trade  has  been  illustrated  in  successive  decisions 
of  the  circuit  court  of  appeals  of  the  eighth  circuit,  composed 
of  three  of  the  four  judges  who  rendered  the  opinion  in  the  cir- 
cuit court  in  the  Northern  Securities  case  and  in  the  Standard 
Oil  ease.  Thus  requirement  by  a  manufacturer  that  the  pur- 
chaser of  his  goods  should  refrain  from  dealing  with  his  com- 
petitors, such  requirement  being  enforced  by  a  rebate  which 
the  purchaser  could  only  secure  by  dealing  solely  with  the 
sellers,  was  held  not  an  unlawful  restraint  of  trade.  The 
court  said  that  the  seller  had  the  right  to  sell  his  commodi- 
ties at  any  price,  and  to  fix  the  prices  and  terms  upon  which 
he  would  sell  them  to  the  persons  with  whom  he  made  contracts 
of  sale,  and  that  he  was  deprived  of  none  of  these  rights  by  the 
Anti-Trust  Act.  There  was  no  competition  between  the  plaintiff 
and  the  defendant,  and  therefore  no  restriction  of  competition 
by  the  contract.^ 

The  same  court  held^  that  a  contract  of  sale  by  a  manu- 
facturer to  jobbers  of  goods  to  be  shipped  across  state  lines  to 
the  latter,  whereby  the  parties  agreed  that  the  jobber  should 
not  sell,  ship  or  allow  any  of  the  goods  thus  purchased  to  be 
shipped  outside  of  a  certain  state,  was  not  in  restraint  of  trade 
or  illegal. 

It  was  held  by  the  same  court  *  that  the  organization  of  a 

1  See    supra,   p.    122.     See    also  2  Whitewell    v.   Continental    To- 

opinion  of  Sanborn,  J.,  and  espe-  bacco     Co.,     125     Fed.     Rep.     454 

cially   the   concurring   opinion   of  (1903). 

Hook,  J.,  where  especial  stress  is  3  Phillips  v.  Viola  Portland  Ce- 

laid  upon  the  efficiency  of  the  New  ment  Co.,  12.3  Fed  Rep.  593  (1903). 

Jersey   holding   corporation    as    a  ■*  Arkansas     Brokerage     Co.     v. 

factor  in  the  restraint  of  trade  In  Dunn,  173  Fed.  Rep.  989  (1909). 
this  case. 


138         BUSINESS    COMBINATIONS    IN    INTERSTATE    COMMERCE.     [§    86 

number  of  mercantile  jobbers  in  the  same  state  of  a  brokerage 
company  and  the  purchase  of  merchandise  required  by  the  man- 
ufacturers through  such  company,  instead  of  through  other 
companies,  although  there  was  no  agreement  biiiding  them  to 
do  so,  was  not  an  unlawful  combination  under  the  act,  but  a 
legitimate  and  lawful  business  enterprise.^ 

In  each  of  these  cases  it  was  held  that  it  was  no  restraint  of 
competition  by  a  contract.  The  reasoning  of  the  opinions  in 
these  cases  excludes  from  the  act  the  so-called  "Factors  Agree- 
ment" or  any  form  of  agreement  whereby  the  seller  seeks  to 
control  through  rebates  or  otherwise  the  trade  of  his  own  cus- 
tomers against  competitors.^ 

The  contracts  involved  in  these  cases  however  must  be  dis- 
tinguished from  those  wherein  the  manufacturer  through  so- 
called  "Agency  Contracts"  or  otherwise  sjeks  to  fix  the  prices 
for  future  sales  made  by  purchasers,  after  he  has  parted  with 
title  to  the  property  sold.  This  was  declared  in  the  so-called 
Patent  Medicine  case,^  where  the  court  held  that  contracts  be- 
tween a  manufacturer  and  all  dealers,  whom  he  permitted  to 
sell  his  products,  comprising  most  of  the  dealers  in  similar 
articles  throughout  the  country,  which  fixes  the  prices  for  the 
sales  whether  wholesale  or  retail  made  by  the  dealers,  operated 
as  a  restraint  of  trade,  unlawful  both  at  common  law  and  as  to 
interstate  commerce  under  the  Anti-Trust  Act,  even  though 
such  articles  may  be  proprietary  medicines  made  under  secret 
formulae. 

1  See  also  Virtue  v.  Creamery  turer's  trade  and  depressing  his 
Package  Mfg  Co..  179  Fed.  Rep.  goods  in  the  market,  and  that 
115   (1910).  merchant  could  not  he  held  liable 

2  The  same  court  in  Passaic  for  a  conspiracy  hy  offering  goods 
Print  Goods  Co.  v.  Ely  &  Walker  of  a  certain  manufacturer,  -which 
Dry  Goods  Co.,  44  C.  C.  A.  426,  and  they  owned,  at  a  cut  price  for  the 
10.5  Fed.  Rep.  163.  62  L.  R.  A.  purpose  of  injuring  his  trade  or 
673  (1900),  held  that  a  merchant  depressing  the  market  price  of  his 
did  not  subject  himself  to  liability  product,  Sanborn,  J.,  dissenting, 
or  an  action  for  damages  to  a  man-  The  court  in  this  case  discussed 
ufacturer  by  sending  circulars  to  and  applied  the  rule  of  Allen  v. 
the  retail  trade  offering  a  small  Flood,  1  A.  C.  (1898)  1. 
quantity  of  such  manufacturer's  s  Dr.  Miles  Medical  Co.  v.  John 
products,  which  he  owned,  at  a  cut  D.  Park  &  Sons  Co.,  220  U.  S.  373, 

price  for  the  purpose  of  destroy-      55  L.  Ed. (1911),  affirming  164 

ing    or    injuring    such    manufac-  Fed.  Rep.   803. 


§    87]     BUSINESS    COMHINATIOXS    IN    INTERSTATE    COMMEUCE. 


139 


The  same  ruling  has  been  made  under  the  copyright  stat- 
utes, although  the  owner  of  the  copyright  has  the  sole  right 
to  vend  copies  of  the  copyrighted  production.^ 


§  87  (74).  No  distinction  as  to  commodities  subject  of  con- 
tract.— In  the  opinion  of  the  circuit  court  of  appeals  in  the 
Continental  Tobacco  Company  case,  supra,  it  is  said  that  to- 
bacco, the  subject  of  the  contract  in  question,  was  not  an  arti- 
cle of  "prime  necessity,"  such  as  grain  or  coal.  This  w^as 
doubtless  said  in  view  of  the  recognized  principle  that  the 
subject  of  the  contract  Avill  be  considered  in  the  determination 
of  the  reasonableness  of  contracts  in  restraint  of  trade.  The 
question  in  such  cases  is  whether  the  public  welfare  is  involved, 
and  if  not,  whether  under  the  particular  circumstances  of  the 
case  the  restraint  upon  one  party  is  not  greater  than  the  protec- 
tion to  the  other  requires.-  In  determining  the  enforcibility 
at  common  law  of  a  contract,  it  might  be  material  that  it  re- 
lated to  a  subject  of  "prime  necessity"  in  a  restricted  terri- 
tory, and  this  might  be  a  circumstance  affecting  the  reason- 
ableness of  the  restraint.^  This  fact  has  also  been  held  mate- 
rial in  determining  whether  combinations  are  injurious  to  trade 
or  commerce  in  the  jurisdictions  where  the  common  law  of 
conspiracy  prevails.* 


1  Bobbs-Merrill  Co.  v.  Strauss. 
210  U.  S.  339,  52  L.  Ed.  1086 
(1910).  A  different  rule  has  been 
applied  in  the  cases  of  lawful 
monopoly  of  patent  rights.  See 
Bement  &  Sons  v.  National  Har- 
row Co.,  186  U.  S.  206,  46  L.  Ed. 
1058    (1902).     See  infra,  §  452. 

zFowle  V.  Park,  131  U.  S.  88. 
1.  c.  97  (1889),  33  L.  Ed.  67;  Gibbs 
V.  Consolidated  Gas  Co.,  130  U.  S. 
396  (1888),  32  L.  Ed.  979.  See 
also  Oliver  v.  Gilmore,  52  Fed. 
Rep.  563   (1892). 

sit  was  said,  however,  by  Taft 
J.,  in  the  Addyston  Pipe  &  Steel  Co. 
case,  supra,  that  the  cases  showed 
that  the  common-law  rule  against 
restraint  of  trade  extended  to  all 


articles  of  merchandise,  and  that 
the  introduction  of  the  distinction 
(of  articles  of  prime  necessity) 
only  furnished  another  opportun- 
ity for  courts  to  give  effect  to  the 
varying  economical  vie\vs  of  its 
members.  It  might  be  difficult  to 
say  why  it  was  any  more  impor- 
tant to  prevent  restraints  of  trade 
in  beer,  mineral  water,  leather, 
or  cloth,  than  of  trade  in  certain 
shades  of  glue. 

4  In  People  v.  Sheldon,  139  N. 
Y.  251  (1893),  a  combination  of 
coal  dealers  was  held  an  unlawful 
conspiracy  under  a  statute  mak- 
ing it  a  misdemeanor  to  conspire 
to  commit  any  act  injurious  to 
trade  or  commerce. 


1^0 

In  the  same  connection  the  court  referred  to  the  fact  that 
the  contract  in  question  was  not  that  of  a  public  service  cor- 
poration, recognizing  that  in  the  case  of  such  corporations 
there  ^vas  a  different  standard  of  determining  the  reasonable- 
ness of  contracts  in  alleged  restraint  of  trade. 

There  is  however  nothing  in  the  Anti-Trust  Act  of  1890 
Avarranting  the  limitation  of  its  prohibitions  according  to  what 
a  court  may  adjudge  are  or  are  not  necessaries  of  life.  Tobacco 
and  whiskej',  and  many  other  articles,  may  not  be  of  such 
prime  necessitj^  as  grain  and  coal,  but  in  a  complicated  and 
progressive  industrial  civilization  the  standard  of  living  of  the 
masses  is  constantly  advancing,  and  the  comforts  and  even 
the  luxuries  of  one  generation  are  the  necessities  of  another. 
At  common  law  contracts  in  general  restraint  of  trade  are 
unenforcible,  irrespective  of  the  subjects  of  the  contract,  and 
it  was  only  in  the  determination  of  the  validity  of  contracts 
in  partial  restraint  of  trade  that  the  subjects  of  the  contracts 
were  considered.  Monopolies  were  first  judicially  pronounced 
illegal  as  against  common  right  in  a  suit  involving  a  royal 
grant  of  a  monopoly  in  playing  cards.^  The  mediaeval  stat- 
utes long  since  repealed  in  England  have  never  been  in  force 
in  the  United  States  in  the  law  of  interstate  commerce,  nor  is 
there  any  common  law  of  conspiracy  in  the  laws  of  the  United 
States.^  The  only  federal  statute  relating  to  freedom  of  inter- 
state commerce  is  the  Anti-Trust  Act,  Under  this  statute 
therefore  there  is  no  basis  for  any  distinction  between  arti- 
cles of  prime  necessity  and  other  articles.  The  owners  of  both 
classes  of  property  have  the  same  rights  under  the  law,  and 
are  subject  to  the  same  obligations.' 

1  See  case  of  Monopolies,  11  merchandise,  victuals  or  any 
6  Coke  Reps.  Pt.  11,  84b  (1601).  other  thing  whatsoever.     "Cattle, 

2  See  infra,  §§  94  et  seq.  sheep,  grain,  butter,  cheese,  fish, 

3  The  Forestalling  Statute,  25  or  other  dead  victual  whatsoever," 
Edward  III,  enacted  in  1350,  made  were  also  included.  These  stat- 
criminal  the  forestalling  of  "wine  ntes  were  all  repealed  in  1771,  Aot 
and  other  victuals,  wares  and  12  George  III,  c.  71.  The  preamble 
other  merchandise  that  came  to  to  the  rei^ealing  act  is  as  follows: 
the  good  towns  of  England  by  "Whereas,  it  has  been  found  by 
land  or  water."  The  statute  of  experience  that  the  restraints  laid 
Edward  VI  against  'regrators,  by  several  statutes  upon  dealing  in 
forestallers  and  grocers"  included  grain,  meal,  flour,  cattle  and  %voar 


§    87j     BUSINESS    COMBINATIONS    IN    INTERSTATE    COMMERCE.  141 


dry  other  sorts  of  victuals  have  a 
tendency  to  discourage  the  growth 
and  to  enhance  the  price  of  the 
same,  which  statutes  if  put  into 
execution  would  bring  great  dis- 
tress upon  the  inhabitants  of 
many  towns  of  this  kingdom,  and 
particularly  upon  the  cities  of 
London  and  Westminster." 


In  view  of  the  ruling  in  Rex  v. 
Waddington,  1  East.  Am.  Ed.  84 
(1801),  that  the  offenses  had  ex- 
isted at  common  law  and  the  re- 
peal of  the  statutes  was  insufh- 
cient,  an  act  was  passed,  7  and  8 
Victoria,  c.  24,  in  1844,  in  express 
terms  abolishing  the  offenses. 


CHAPTER  VI. 

LABOR   COMBINATIONS    IN    INTERSTATE    COMMERCE. 

§  88.    The  labor  legislation  of  congress. 

89.  Regulation  of  interstate  commerce  in  relation  to  labor. 

90.  The  courts  on  labor  combinations  in  relation  to  interstate  com- 

merce. 

91.  Interstate  commerce  and  railroad  labor  organization. 

92.  Business  boycotts  in  interstate  commerce. 

93.  Strikes  and  boycotts  by  employees  of  interstate  carriers. 

94.  The  law  of  conspiracy  in  interstate  commerce. 

95.  Distinguished  from  common-law  conspiracy. 

96.  Interstate  commerce  in  relation  to  employes  therein. 

97.  "Picketing"  and  "soliciting"  in  interstate  commerce. 

98.  The  status  of  interstate  railroad  employes  is  that  of  free  con- 

tract. 

99.  The  right  of  labor  organization  includes  the  right  of  represen- 

tation. 

100.  Injunction  in  interstate  commerce. 

101.  Contempt  in  United  States  courts. 

102.  Direct  and  indirect  contempts. 

103.  Criminal  and  civil  contempts. 

104.  Conspiracy  and  contempt. 

105.  Mandatory  injunctions  in  interstate  commerce. 

§  88  (77).  The  labor  legislation  of  congress. — The  labor  leg- 
islation of  congress  has  not  been  limited  to  the  relations  of  la- 
bor in  interstate  commerce,  but  certain  features  of  this  legisla- 
tion are  distinctly  related  to  the  interstate  commerce  relations 
of  labor,  and  the  provisions  of  both  the  Interstate  Commerce 
and  the  Anti-Trust  Acts  relating  to  unlawful  combinations 
in  interstate  commerce  have  been  construed  as  applicable  to 
labor  as  well  as  to  business  combinations.  The  general  labor 
legislation  of  congress  is  therefore  properly  considered  in  this 
connection. 

The  bureau  of  labor  created  under  the  act  of  June  27,  1884, 
was  made  a  department  of  labor  under  the  act  of  June  13, 
1888.  The  general  design  and  the  duties  of  the  commissioner  of 
labor  were  declared  by  the  act  "to  acquire  and  diffuse  among 
the  people  of  the  United  States  useful  information  on  subjects 
connected  with  labor  in  general  in  the  most  comprehensive 


§    89]         LABOR  C0MI5IXATI0NS   IX   INTERSTATE   COMMERCE.  1  \' 

sense  of  the  Avord,  and  especially  upon  its  relation  to  capital, 
the  hours  of  labor,  the  earnings  of  laboring  men  and  women, 
and  the  general  mean^  of  promoting  their  social,  intellectual 
and  moral  prosperity," 

The  commissioner  was  charged  to  investigate  conditions  of 
labor,  wages,  cost  of  living,  effect  of  customs  laws,  what  arti- 
cles were  controlled  by  trusts,  combinations  of  capital,  and 
what  effect  trusts  and  other  combinations  of  capital  had  on 
production  and  prices.  The  commisioner  was  also  charged  to 
investigate  the  cases  of  disputes  between  employes  and  em- 
ployers. 

By  the  act  of  February  14,  1903,  the  department  of  com- 
merce and  labor  was  established,  and  the  department  of  labor 
made  a  part  of  this  department. 

§  89  (78).  Regulation  of  interstate  commerce  in  relation  to 
labor. — Congress  has  exercised  its  power  of  regulation  in  the 
effort  to  harmonize  the  relations  of  capital  and  labor  in  inter- 
state railroads.  The  first  legislation  of  this  character  was  the 
act  of  June  29, 1886.^  This  act  was  not  limited  to  the  employes 
of  carriers,  but  authorized  the  incorporation  of  any  associa- 
tion of  working  people  having  two  or  more  branches  in  the 
states  or  territories  of  the  union,  and  the  incorporation  was 
effected  by  filing  articles  in  the  office  of  the  recorder  for  the 
district  of  Columbia.  Provision  was  made  for  the  establish- 
ing of  branches  and  sub-unions  in  any  territory  of  the  United 
states. 

The  act  of  June  1,  1898,'  was  entitled  "An  act  concerning 
carriers  engaged  in  interstate  commerce  and  their  employes," 
and  by  its  terms  only  applied  to  employes  engaged  in  the 
railroad  train  service,  excluding  employes  of  street  railroads. 
Under  section  2  of  this  act  of  1898,  the  chairman  of  the  Inter- 
state Commerce  Commission  and  the  commissioner  of  labor 
were  required  to  put  themselves  in  communication  with  the 
parties  to  a  controversy  between  a  carrier  and  its  employes 
threatening  to  interrupt  the  business  of  the  carrier,  and  to  use 

1  Comp.  Stats,  p.  3204,  infra,  statute  of  Oct.  1,  1S8S,  providing 
I  376.  for  boards  of  arbitration   for  set- 

2  3  Comp.  Stats,  p.  3205,  infra,  tling  controversies  between  inter- 
§   377.     This  repealed  the  earlier  state  carriers  and  their  employes. 


141  LABOR  COMBIXATIOXS  IN  INTERSTATE   COMMERCE.  [§    89 

their  best  efforts  by  mediation  and  conciliation  to  amicably 
adjust  the  same ;  and  if  these  efforts  were  unsuccessful,  to  en- 
deavor to  bring  about  a  voluntary  arbitration  of  the  contro- 
versy in  accordance  with  the  provision  of  the  act.  Provision 
is  made  in  the  act  for  such  voluntary  arbitration.  This  act 
also  amends  the  National  Trade  Union  Ineo^'poration  Act,  by 
providing  that  the  articles  of  incorporation  shall  set  forth 
that  any  member  shall  cease  to  be  such  by  participating 
in  or  inciting  force  or  violence  against  persons  or  property  dur- 
ing strikes,  lockouts  or  boycotts,  or  by  seeking  to  prevent  others 
from  working  through  violence,  threats  or  intimidation. 

Section  10  of  this  act,  making  it  a  criminal  offense  against 
the  United  States  for  an  interstate  carrier  or  agent  or  officer 
having  full  authority  from  his  principal  to  discharge  an  em- 
ploye from  service  to  the  carrier  because  of  his  membership  in 
a  labor  organization,  was  adjudged  invalid  as  violative  of 
personal  liberty  and  due  process  of  law  guaranteed  by  the  fifth 
amendment  of  the  constitution  and  on  the  further  ground  that 
there  was  no  such  connection  between  interstate  commerce 
and  membership  in  a  labor  organization  as  to  authorize  con- 
gress to  make  such  discharge  for  such  reason  a  crime  against 
the  United  States.^ 

The  decision  was  held  not  to  involve  other  and  independent 
provisions  of  the  act,  such  as  provisions  relating  to  arbitration, 
as  the  section  upon  which  the  defendant  was  convicted  was 
separable  from  the  other  provisions  of  the  act ;  so  that  it  would 
seem  that  the  provisions  for  voluntary  arbitration  referred  to 
in  the  preceding  section  are  still  in  foree.^ 

1  See  Adair  v.  U.  S.,  208  U.  S.  ployes  of  interstate  carriers.  See 
161,      52      L.      Ed.      436      (1908).       infra,  §  527  et  seq. 

.Justices  McKenna  and  Holmes  Under  joint  resolution  of  sixty- 
dissented.  The  judgnaent  of  con-  first  congress  (Public  Resolution 
viction  -was  reversed  witti  direc-  No.  45)  a  commission  was  ap- 
tions  to  sustain  the  demurrer  to  pointed  for  the  purpose  of  making 
the  indictment  and  dismiss  the  a  "thorough  investigation  of  the 
cause,  reversing  1.52  Fed.  736.  subject    of     Employer's     Liability 

2  In  the  labor  legislation  of  and  Workmen's  Compensation"  to 
congress  should  also  be  included  submit  a  report  through  the  presi- 
the  Employer's  Liability  Acts  and  dent  to  congress  not  later  than  the 
other   acts  for  the  safety   of  em-  first  Monday  of  December,  1911. 


§    91 J         LAHOR  COMBINATIONS   JN    INTERSTATE   COMMERCE.  145 

§  90  (79).  The  courts  on  labor  combinations  in  relation  to 
interstate  commerce.— As  there  lias  bccu  no  national  incor- 
poration of  trade  unions,  there  has  been  no  judicial  construc- 
tion or  practical  application  of  the  act.  It  was  said,  however, 
by  Justice  Harlan,  in  an  opinion  rendered  in  1894,^  with  ref- 
erence to  the  original  act  of  1886  legalizing  the  incorporation 
of  national  trade  unions,  that  it  did  not  in  any  degree 
sanction  illegal  combinations,  but  that  its  purpose  in  authoriz- 
ing working  people  to  better  their  own  conditions  by  such 
combinations  was  most  praiseworthy  and  should  be  sustained 
by  the  courts  whenever  their  power  to  that  end  was  properly 
invoked. 

An  agreement  for  arbitration  betAveen  an  interstate  carrier 
and  its  employes  under  the  act  of  1908,  is  essentially  a  com- 
mon-law arbitration  and  rests  solely  on  the  written  agreement 
of  arbitration  entered  into  between  the  parties,  which  limits 
and  determines  not  only  the  rights  of  the  parties  thereto  but 
also  the  extent  of  the  power  of  the  arbitrators,  and  is  to  be 
construed  in  accordance  with  the  rules  governing  the  construc- 
tion of  contracts  rather  than  those  applicable  to  pleadings.- 

§  91.  Interstate  commerce  and  labor  organizations. — While 
the  jurisdiction  of  the  federal  courts  lias  frequently  been  in- 
voked in  cases  of  trade  disputes  between  the  employers  and 
employes  where  the  jurisdiction  is  based  upon  diverse  citizen- 
ship and  no  federal  question  is  involved  therein,  the  questions 
in  relation  to  interstate  commerce  have  usually  been  presented 
in  cases  involving  the  contentions  of  interstate  carriers  with 
their  employes.^ 

1  Arthur  v.  Oakes,  infra.  in  dispute  to  the  Board  of  Arbitra- 

2  In  re  Southern  Pacific  Co.,  C       tion  provided  by  this  act. 

C.  Eastern  District  Cal.,  155  Fed.  An  attempt  was  made  in  Eng- 

1001  (1907),  ruling  on  exception  to  land  in  1824  (5  Geo.  IV,  c.  96),  and 

award    of   arbitrators    under   this  again  in  18G7  (30,  31  Vic,  c.  105), 

^^^-  and  in  1872  (35,  36  Vic,  c  46),  to 

In  Wabash  R.  R.  Co.  v.  HannI-  provide   for   settlements   of   trade 

han,   121   Fed.   536    (1903),   Judge  disputes.     The  acts  were  not  used 

Adams,   in   dissolving  the   injunc-  and  were  finally  replaced  by  the 

tion  against  railroad  employes,  ex-  Conciliation   Act  of   1896    (59,   60 

pressed  the  hope  that  the  parties,  Vic,  c.  30). 

if   unable   to   adjust   their    differ-  s  Southern   Ry.    Co.    v.   Machin- 

ences,  would  submit  the  questions  ists  Local  Union,  111  Fed.  Rep.  49 
10 


146 


LABOR    COMBINATIOXS    IN    INTERSTATE    COMMERCE.        [§    91 


Eailroad  labor  orgauizations  have  been  considered  in  the 
judicial  construction  and  application  of  both  the  Interstate 
Commerce  Act  of  1887  and  the  Anti-Trust  Act  of  1890.  In  the 
industrial  disturbances  of  1893  and  1894  there  were  a  num- 
ber of  injunctions  sued  out  in  the  different  circuit  courts  en- 
joining interference  with  interstate  commerce,  some  of  these 
by  railroad  companies  enjoining  interference  with  the  inter- 
change of  traffic  with  connecting  railroads ;  ^  some  by  receivers 
of  railroads  applying  for  protection  against  interference  with 
their  possession  and  operation,^  and  also  in  direct  suits  by 
the  United  States  under  the  provisions  of  the  Anti-Trust  Act 
enjoining  unlawful  interference  with  interstate  commerce  and 
the  mails.  ^ 

It  was  held  in  these  cases  that  the  Anti-Trust  Act  was  ap- 
plicable to  any  combinations  restraining  trade,  whether  of 
labor  or  of  capital,*  and  that  the  penalties  prescribed  by  sec.  10 


(West.  Dist.  of  Tenn.  1901); 
Allis-Chalmers  Co.  v.  Reliable 
Lodge,  111  Fed.  Rep.  264  (1901); 
Elder  v.  Whiteside,  72  Fed.  Rep. 
724  (La.  1895);  Consolidated 
Steel  &  Wire  Co.  v.  Murray,  SO 
Fed.  Rep.  811  (1897);  Makall  v. 
Ratchford,  82  Fed  Rep.  41  (W. 
Va.  1897);  Coeur  d'Alene  Consoli- 
dated Mining  Co.  v.  Miners  Un- 
ion, 51  Fed.  Rep.  260  (Idaho, 
1892);  American  Steel  &  Wire  Co. 
V.  Wire  Drawers,  etc.,  90  Fed  Rep. 
608  (No.  Dist.  of  Tenn.  1898); 
United  States  v.  Weber,  114  Fed. 
Rep.  950  (West.  Dist.  of  Va.  1902); 
Otis  Steel  Co.  v.  Local  Union; 
No.  18,  110  Fed.  Rep.  698  (1901); 
Hopkins  v.  Oxley  Stave  Co.,  28  C. 
C.  A.  99,  83  Fed.  Rep.  912  (1897), 
affirming  72  Fed.  Rep.  695;  The 
Allis-Chalmers  Co.  v.  Iron  Moul- 
ders Union,  150  Fed.  155,  C.  C.  of 
Wis,  (1906),  decree  modified  in 
C.  C.  A.,  7th  Circuit,  166  Fed.  Rep. 
45  (1908);  Barnes  v.  Berry,  156 
Fed.  Rep.  72,  C.  C,  S.  D.  of  Ohio 
(1907);  Delaware  &  W.  R.  Co.  v. 
Switchmen's  Union,  et  al.,  158  Fed. 


541  (1907);  Kolley  v.  Robinson 
(C.  C.  A.  8th  Cir.),  187  Fed.  415 
(1911). 

1  Toledo,  A.  A.  &  N.  R.  Co.  v. 
Penn.  Co.  et  al„  54  Fed.  Rep.  730 
(1893)  (Taft,  J.,  in  Northern 
Dist.  of  Ohio);  see  also  54  Fed. 
Rep.  746  (1898);  Southern  Cal.  R. 
Co.  V.  Rutherford,  62  Fed.  Rep. 
796   (1894)    (So.  Dist.  of  Cal.). 

2  Thomas  v.  C,  N.  O.  &  T.  P.  R. 
Co.,  62  Fed.  Rep.  803  (1894)  (Taft. 
J.,  in  Southern  District  of  Ohio). 

3  United  States  v.  Workingmen's 
Amalgamated  Council,  54  Fed. 
Rep.  994  (Dist.  of  La.)  (1893); 
United  States  v.  Eliot,  64  Fed  Rep. 
27  (1894)  (West.  Dist.  of  Mo.); 
United  States  v.  Agler,  62  Fed. 
Rep.  826  (Dist.  of  Ind.)  (1894); 
Charge  to  Grand  J\iry,  Grosscup, 
J.,  62  Fed.  Rep.  828  (1894);  Ross, 
J.,  62  Fed.  Rep.  834;  Waterhouse 
V.  Comer,  55  Fed.  Rep.  149  (S. 
Dist.  of  Ga.),    (1893). 

4  See  authorities,  supra,  and  In 
re  Debs,  64  Fed.  Rep.  724  (1894). 
In  United  States  v.  Cassiday,  67 
Fed.  Rep.  698   (1895),  it  was  held 


§    92]         LABOR  COMBINATIONS  IN  INTERSTATE  COMMERCE.  147 

of  the  Interstate  Commerce  Act  were  applicable  to  the  em- 
ployes of  an  interstate  railroad  who,  while  continuing  in  their 
positions  as  employes,  refused  to  handle  the  freight  received 
from  other  roads  Such  rc-rusal,  when  made  in  consequence 
of  a  boycott  declared  by  tlieir  union  against  such  road,  was  an 
unhiwful  conspiracy  and  punishable  as  such  under  the  laws  of 
the  United  States,  and  also  punishable  as  a  contempt  when 
their  employing  road  was  under  an  injunction  prohibiting  it 
from  refusing  to  exchange  interstate  traffic  with  such  boy- 
cotted road. 

The  supreme  court,  in  the  Debs  case,^  while  not  dissenting 
from  the  conclusion  of  the  circuit  court  in  holding  the  Anti- 
Trust  Act  applicable  to  a  labor  combination  interfering  with 
interstate  commerce,  affirmed  the  jurisdiction  of  the  federal 
court  to  grant  an  injunction  against  such  interference  on  the 
broader  ground  of  the  federal  power  over  interstate  commerce, 
which  included  the  power  to  remove  anything  put  upon  the 
highways,  natural  or  artificial,  to  obstruct  the  passage  of 
such  commerce,  and  that  this  federal  power  was  enforcible  by 
injunction. 

§  92,  Business  boycotts  in  interstate  commerce. — The  Anti- 
Trust  Act  has  also  been  held  applicable  to  labor  combinations 
other  than  the  employes  of  interstate  carriers,  and  it  has  been 
held  by  the  supreme  court  ^  that  any  combination  Avhich  essen- 
tially obstructs  the  free  flow  of  commerce  among  the  states 
and  restricts  in  that  regard  the  liberty  of  a  trader  engaged  in 
business  is  violative  of  the  act,  and  the  averments  of  a  peti- 
tion setting  forth  such  a  combination  destroying  by  means  of 
a  boycott  an  existing  interstate  business,  and  preventing  vend- 
ees in  other  states  from  reselling  the  manufactured  products 

that   the   provisions    of   the   Anti-  Lawlor.   20S  U.   S.   274,   52   L.  Ed. 

Trust  Law  were  broad  enough  to  488  (1908),  reversing  148  Fed.  Rep. 

reach    the    combination    or    con-  924.    The  question  of  the  right  of 

spiracy  that  would  interrupt  the  action  was  certified  by  the  court  of 

transportation  of  property  or  per-  appeals  of  the  2nd  circuit  to  the 

sons  from  one  state  to  another.  supreme  court;    and  the  supreme 

1158  U.  S.  564,  1.  c.  600,  39  L.  court,   on   the   application   of   the 

Ed.  1092   (1S94).  parties,  required  the  whole  record 

2  This   was   what    is   known   as  to  be  sent  up  under  section  6  of 

the  Danbury  Hat  case,  Loewe  v.  the  Judiciary  Act  of  1S91. 


148  LxiBOR  COMBINATIONS  IN  INTERSTATE   COMMERCE.         [§    93 

when  transported,  stated  a  cause  of  action  for  damages  under 
the  act. 

The  same  principle  was  applied  to  a  bill  in  equity  enjoining^ 
a  boj^cott  interfering  with  the  conduct  of  an  interstate  busi- 
ness.^ The  court  said  that  it  was  immaterial  that  the  instru- 
mentalities of  the  boycott  were  spoken  words  or  written  mat- 
ter. The  principle  announced  by  the  court  was  held  to  apply 
to  any  unlawful  combinations  resulting  in  restraint  of  inter- 
state commerce,  and  covered  any  illegal  means  by  which  inter- 
state commerce  is  restrained,  whether  by  unlaAvful  combina- 
tions of  capital  or  unlawful  combinations  of  labor,  and  whethex 
the  restraint  be  occasioned  by  unlawful  contracts,  trusts,  pool- 
ing arrangements,  black-lists,  boycotts,  threats,  intimidations 
and  whether  this  be  effected  in  whole  or  in  part  by  acts,  words 
or  printed  matter,  and  that  the  court 's  protective  and  restrain- 
ing powers  extended  to  any  device  whereby  property  is  irre- 
parably damaged  or  commerce  is  illegally  restrained. 

The  first  of  these  cases,  the  Danbury  Hat  case,  was  an  action 
at  law  for  recovery  of  damages  under  the  seventh  section 
of  the  Anti-Trust  Act,  and  it  was  therefore  strictly  within  the 
statute.  The  equity  suit,  however,  was  brought  to  restrain 
the  interruption  of  existing  business  and  asked  no  relief  under 
the  Anti-Trust  Act.  It  was  therefore  sustained  under  the  gen- 
eral equity  jurisdiction  of  the  court  in  protectioii  of  interstate 
commerce  which  existed  irrespective  of  the  Anti-Trust  Act. 

§  93  (81).  Strikes  and  boycotts  by  employes  of  interstate 
carriers. — The  right  to  strike,  that  is  to  enforce  demands  for 

1  Gompers     v.     Buck     Stove     &  they  become  what  have   been  called 

Range  Co.,  220  U.  S. ,  55  L.  Ed.  'verbal  acts,'  and  as  much  subject 

(May    15,    1911).     The    court  to    injunction    as   the    use    of   any 

said  in  Its  opinion  as  to  the  right  to  other    force    whereby    property    is 

an  injunction  and  its  violation,  "in  unlawfully    damaged.      "When    the 

the  case  of  an  unlawful  conspiracy,  facts  in  such  cases  warrant  it,  a 

the   agreement  to   act   in   concert  court   having   jurisdiction    of   the 

when  the  signal  is  published  gives  parties    and    subject    matter,    has 

the  W'Ords   'unfair'   'we  don't  pat-  power  to  grant  an  injunction."  As 

ronize,'   or   similar  expressions,   a  to  entry  on  the  contempt  charge 

force   not   inhering   in   the   words  in    this    case    see    infra,     §    103. 

themselves  and   therefore  exceed-  See  also  as  to  labor  controversy, 

ing  any  possible  right  of  speech  Loewe  v.  California  State  Fed.  of 

which   a   single    individual   might  Labor,  189  Fed.  714   (1911). 
have.     Under  such  circumstances 


§    93]         LABOR  COMBINATIONS   IN   INTERSTATE   COMMERCE. 


149 


the  betterment  of  their  own  conditions  by  concerted  ceasing 
from  employment  on  the  part  of  employes  directly  engaged  in 
interstate  commerce,  has  been  uniformly  sustained,  but  has 
been  broadly  distinguished  from  the  right  to  boycott  or  en- 
gage in  a  so-called  sympathy  strike.  Tlie  incidental  interfer- 
ence -with  commerce  resulting  from  a  strike,  when  a  body  of 
laborers  by  concerted  action  leave  their  employment,  does  not 
constitute  an  unlawful  conspiracy,  nor  is  it  violative  of  the 
Interstate  Commerce  Act  or  the  Anti-Trust  Act.^  Laborers  di- 
rectly engaged  in  interstate  commerce  have  the  right,  singly 
or  in  concert,  to  cease  from  their  employment  whenever  they 
deem  such  action  necessary  for  the  betterment  of  their  own 
conditions,  and  it  is  immaterial,  if  their  demands  are  made  in 
good  faith  for  tlie  betterment  of  their  own  conditions,  that  is, 
as  to  wages  or  other  conditions  of  employment,  whether  such 


1  Hopkins  v.  United  States,  171 
U.  S.  578,  1.  c.  593,  43  L.  Ed.  290 
(1898).  As  to  the  lawfulness  of  a 
strike,  per  sc.  bj^  railroad  em- 
ployes, see  opinion  of  Hon. 
Richard  Olney,  then  attorney  gen- 
eral of  the  United  States,  in  the 
case  of  the  Philadelphia  &  Read- 
ing R.  Co.,  in  the  proposed  adop- 
tion of  a  rule  by  the  receivers  ex- 
cluding members  of  railroad 
Brotherhoods  from  employment, 
printed  in  p.  504  of  Hearings  on 
House  Bill  No.  89,  before  the  com- 
mittee on  the  judiciary  of  the  58th 
congress.  The  court  in  this  case, 
65  Fed.  Rep.  660  (1894),  declined 
to  direct  the  receivers  to  abrogate 
such  a  rule,  which  they  believed 
was  advantageous  to  the  manage- 
ment of  the  property.  But  see 
Taft,  J.,  in  the  Phelan  case,  supra, 
that  "the  employes  of  the  re- 
ceiver had  the  right  to  organize 
into  or  join  a  labor  union  which 
should  take  action  as  to  the  terms 
of  their  employment.  It  is  a  bene- 
fit to  them  and  to  the  public  that 
laborers  should  unite  for  their 
common    interest   and   for   lawful 


purposes.  They  have  labor  to  sell. 
If  they  stand  together  they  are 
often  able,  all  of  them,  to  com- 
mand better  prices  for  their  labor 
than  all  dealing  singly  with  rich 
employers,  because  the  necessities 
of  the  single  employe  may  compel 
him  to  accept  any  prices  that  are 
offered.  The  accumulation  of  a 
fund  for  those  who  feel  that  the 
wages  offered  are  below  the  legiti- 
mate market  value  of  such  labor 
is  desirable.  They  have  the  right 
to  appoint  officers  who  shall  ad- 
vise them  as  to  the  course  to  be 
taken  in  their  relations  with  their 
employers.  They  may  unite  with 
other  unions.  The  officers  they 
appoint,  or  any  other  person 
whom  they  choose  to  listen  to, 
may  advise  them  as  to  the  proper 
course  to  be  taken,  both  in  regard 
to  their  common  employment,  or 
if  they  choose  to  appoint  any  one, 
may  order  them,  on  pain  of  expul- 
sion from  their  imion,  peacefully 
to  leave  the  employ  of  their  em- 
ployer because  any  of  the  terms 
of  their  employment  are  unsatis- 
factory." 


150  LABOR  COMBINATIONS  IN  INTERSTATE   COMMERCE.         [§    93 

demands  are  reasonable  or  unreasonable,  provided  of  course 
that  they  act  within  the  limit  of  their  lawful  rights,  and  do  not 
interfere  with  those  who  continue  in  the  employment  or  who 
are  employed  to  take  their  places;  that  is,  within  these  limits 
they  have  the  same  right  with  others  to  determine  the  reason- 
ableness of  their  own  demands  for  the  betterment  of  their  own 
conditions. 

On  the  other  hand,  a  boycott,  or  a  sympathetic  strike,  that 
is  the  ceasing  from  employment,  not  for  the  purpose  of  bet- 
tering their  own  conditions,  but  for  the  purpose  of  enforcing 
the  employing  company  to  refuse  traffic  from  a  connecting  car- 
rier, or  to  refuse  to  handle  some  boycotted  traffic,  is  unlawful. 
It  was  said  by  Judge  Taft,^  in  speaking  of  the  attempted  boycott 
of  the  Pullman  cars,  that  it  was  immaterial  that  such  boycott  was 
unaccompanied  by  violence  or  intimidation. 

"The  purpose,  shortly  stated,  w^as  to  starve  the  railroad 
companies  and  the  public  into  compelling  Pullman  to  do  some- 
thing which  they  had  no  lawful  right  to  compel  him  to  do; 
certainly  the  starvation  of  a  nation  cannot  be  the  lawful  pur- 
pose of  a  combination,  and  it  is  utterly  immaterial  whether  the 
purpose  be  effected  by  means  usually  lawful  or  otherwise." 

The  distinction  was  drawn  in  another  case  ^  between  a  com- 
bination of  the  employes  of  the  complainant  railway  company 
which  was  seeking  an  injunction  from  the  combination  of  the 
employes  of  the  defendant  company.  The  court  said  the  for- 
mer was  lawful,  as  the  employes  of  that  company  were  simply 
exercising  their  lawful  right  to  cease  from  employment,  that 
is,  to  strike,  while  the  latter  combination  for  the  refusal  of 
the  traffic  of  the  former  was  unlawful,  as  it  involved  a  boy- 
cott for  no  grievances  of  their  own,  thus  making  a  direct  inter- 
ference with  interstate  commerce,  which  was  the  intended  re- 
sult of  their  act,  and  not  the  incidental  result  of  their  exer- 
cise of  a  lawful  right.  It  was  also  ruled,  that  a  combination  to 
compel  railroad  companies  to  break  their  contracts  with  the 
owners  of  certain  cars  for  the  use  thereof  was  an  actionable 
conspiracy  and  unlawful. 

It  will  be  observed  that  in  these  cases  there  was  not  what 

1  Thomas  v.  C,  N.  O.  &  T.  P.  R.  2  Toledo,  A.  A.  &  M.  R.  Co.  v. 

Co.,  supra.  Pennsylvania    Co.,    54    Fed.    Rep. 

730,  1.  c.  738. 


§    94]         LABOR   COMBINATIONS  IN  INTERSTATE   COMMERCE.  151 

is  known  as  a  simple  or  primary  boycott,  as  in  the  ease  of  an 
organized  withdrawal  of  patronage  from  a  trader  for  the  pur- 
pose of  injuring  the  business,  but  it  was  a  "sympathetic 
strike"  of  the  employes  of  one  interstate  carrier  for  the  pur- 
pose of  forcing  a  refusal  of  business  relations  with  another  in- 
terstate carrier  in  violation  of  law. 

§  94  (82).  The  law  of  conspiracy  in  interstate  commerce. — 
The  LiAV  of  conspiracy  has  been  extensively  discussed  in  rela- 
tion to  the  combinations  of  both  labor  and  capital  in  interstate 
commerce.  As  there  are  no  common-law  offenses  in  the  United 
States,  criminal  conspiracies  are  punishable  only  as  such  when 
they  are  distinctly  declared  in  the  laws  of  the  United  States. 
There  are  certain  specific  conspiracies  made  punishable  by  the 
statute,  but  the  section  invoked  in  relation  to  interstate  com- 
merce is  what  is  known  as  the  general  conspiracy  statute,  sec- 
tion 5440,  R.  S.,  U.  S.,  which  is  as  follows :  ^ 

"If  two  or  more  persons  conspire  either  to  commit  any  of- 
fense against  the  United  States,  or  to  defraud  the  United 
States  in  any  manner  or  for  any  purpose,  and  one  or  more  such 
parties  do  any  act  to  affect  the  object  of  the  conspiracy,  all 
the  parties  to  such  conspiracy  shall  be  liable  to  a  penalty  of 
not  more  than  ten  thousand  dollars,  or  to  an  imprisonment  of 
not  more  than  two  years,  or  to  both  fine  and  imprisonment, 
in  the  discretion  of  the  court." 

A  conspiracy  was  defined  by  the  supreme  court  as  a  combi- 
nation of  two  or  more  persons  by  concerted  action  to  accom- 
plish a  criminal  or  unlawful  purpose,  or  some  purpose  not  in 
itself  criminal  or  unlaAvful.  by  criminal  or  unlawful  means.^ 

1  Section    5440,    R.    S.    U.    S.,    3  United   States   v.    Sanche,   7   Fed. 

Comp.  Stats.,  p.  3676.   This  statute  Rep.     715     (W.     Dist.     of    Tenn.) 

was  first  enacted  in  1S67  as  a  part  (1881). 

of  the  Internal  Revenue  Act,  the  2  Pettibone  v.  United  States, 
penalty  therein  being  not  less  148  U.  S.  197,  37  L.  Ed.  419  (1892), 
than  one  thousand  nor  more  than  citing  Shaw,  C.  J.,  in  Common- 
ten  thousand  dollars,  and  im-  wealth  v.  Hunt,  4  Metcalf,  111. 
prisonment  for  not  more  than  two  in  this  case  the  court  quashed  an 
years;  subsequently  incorporated  indictment  whereunder  a  convic- 
in  the  revised  statutes  and  tion  had  been  had  for  conspiring 
amended  into  its  present  form  by  to  obstruct  the  due  administration 
act  of  May  17,  1879.  It  has  been  of  justice  by  intimidation  and 
held  to  apply  to  all  crimes  under  violence  in  a  strike,  on  the  ground 
the  laws  of  the  United  States.   See  that  the  indictment  failed  to  show 


152  LABOR  COilBIXATIOXS  IN  INTERSTATE   COMMERCE.  [§    94 

This  section  has  been  held  to  include  all  conspiracies  for  affect- 
ing private  rights  and  interests,  where  they  are  imder  the  pro- 
tection of  the  criminal  laws  of  the  United  States  as  well  as 
the  rights  and  interests  of  the  government  itself.^  "While 
the  offense  of  conspiracy  is  an  ''infamous  crime"  within  the 
meaning  of  the  fifth  amendment  to  the  constitution,  requiring 
presentment  or  indictment  of  a  grand  jury.-  it  is  yet  a  misde- 
meanor and  not  a  felony,  and  an  indictment  is  not  defective 
by  reason  of  failing  to  aver  that  the  conspiracy  was  "feloni- 
ously" entered  into.^  As  the  offense  is  a  misdemeanor,  the 
doctrine  of  merger  has  been  held  not  applicable,  so  that  an  ac- 
quittal of  the  offense  of  conspiracy  is  not  a  bar  to  the  prosecu- 
tion for  the  crime  itself.* 

A  conviction  under  this  statute  for  conspiracy  to  obstruct 
the  United  States  mails  ^  was  afnrmed,  and  the  conspiracy  was 
held  to  be  a  separate  offense  for  which  congress  had  power 
to  provide  a  greater  punishment  than  for  the  offense  itself  for 
which  the  conspiracy  was  formed.*^ 

The  law  of  conspiracj^  was  invoked  in  connection  with  the 
labor  disturbances  of  1893  and  1894,  and  a  number  of  criminal 
prosecutions  were  instituted  and  indictments  found  for  crimi- 
nal conspiracy  to  commit  offenses  of  violation  of  the  Inter- 
state Commerce  and  Anti-Trust  Acts.'^  These  statutes,  as  will 
be  seen,  prohibit  and  make  criminal  interferences  with  or  com- 
binations in  restraint  of  trade  in  interstate  commerce.^ 

that  the  defendants  had  notice  of  *  Berkowitz    v.    United    States, 

the    pendency    of    proceedings    in  3rd    Circuit,   35    C.    C.   A.    379,   93 

the    United    States    courts    which  Fed.  Rep.  4.52    (1899). 

they   were   charged  with   combln-  s  Sec.    3995    R.    S.    of   U.    S.,    3 

ing  to  obstruct.  Comp.  Stat,  2716. 

1  United  States  v.  Sanche,  supra.  «  Clune  v.  United  States,  159  U. 

2Mackin   V.   United   States,    117  S.  590,  40  L.  Ed.  269  (1895). 

U.   S.  348,  29   L.  Ed.   909    (1886);  'See    Charge    to    Grand    Jury 

Callan  v.  Wilson,  127  U.  S.  540,  32  Grosscup,  .T.,  supra,  and  Ross,  J., 

L.  Ed.  223  (1888),  where  held  that  62   Fed.   Rep.    838;    United   States 

a  conspiracy  at  common  law  for  v.    Cassiday,    67    Fed.    Rep.    698; 

alleged  boycott  in  the  District  of  In  re  Debs,  supra. 

Columbia    was    not    triable    sum-  « As  to  criminal  conspiracy  un- 

marily  before  a  police  magistrate,  der   Anti-Trust   Act,    and    its    dis- 

but  that  jury  trial   was   demand-  tinction    from     conspiracy    under 

able  as  a  right.  sec,  5440,  see  infra,  §  457. 

8  Bannon  v.  United  States,   156 
U.  S.  464,  39  L.  Ed.  (1895). 


§    94]         LAROR  COMBINATIONS  IN  INTERSTATE  COMMERCE.  153 

The  subject  was  exhaustively  discussed  also  in  the  injunction 
and  contempt  proceedings  growing  out  of  the  same  disturb- 
ances. The  law  of  conspiracy  has  been  applied  in  determining 
the  responsibility  of  persons  not  parties  to  the  record  for  con- 
tempt of  court  in  violation  of  an  injunction  under  the  rule, 
that  when  a  conspiracy  is  shown,  each  conspirator  is  responsi- 
ble for  the  acts  of  his  co-conspirators.^  It  was  held  by  Taft, 
J.,  in  the  Toledo,  A.  A.  &  N.  W.  Railroad  case,  supra,  that 
threatening  action  to  withhold  labor  from  another,  for  the 
purpose  of  inducing,  procuring  or  compelling  the  other  to 
commit  an  unlawful  act  was  itself  a  criminal  or  unlawful  act. 
As  the  Interstate  Commerce  Act,  section  3,  prohibited  the  car- 
rier from  refusing  to  interchange  traffic  with  another  carrier, 
the  threatening  to  withhold  labor  for  the  purpose  of  compell- 
ing him  to  refuse  such  traffic  was  itself  a  criminal  or  unlawful 
act.  The  enforcement  of  a  rule  of  the  Brotherhood  of  Engi- 
neers requiring  its  members  to  refuse  to  handle  property  of  a 
railroad  system  with  which  the  brotherhood  was  at  issue  was 
held  to  constitute  a  criminal  conspiracy  under  the  laws  of  the 
United  States,  and  the  officers  and  all  members  of  the  brother- 
hood engaged  in  enforcing  the  rule  were  held  equally  guilty 
and  subject  to  the  penalties  of  the  section. 

The  courts  have  allowed  proof  of  the  character  and  pur- 
poses of  a  conspiracy  to  be  made  by  official  proclamation, 
newspapers  and  reports,  and  other  matters  of  public  current 
history.^ 

It  was  also  held  in  these  cases  that  the  parties  to  a  criminal 
conspiracy  are  liable  for  any  actual  loss  to  private  parties  in- 
flicted in  pursuance  of  their  conspiracy.  The  gist  of  any  such 
action  however  is  not  as  in  criminal  cases  in  the  combination, 
but  in  the  fact  of  injury,  and  no  civil  liability  arises  unless 
injury  is  done.  Ordinarily  the  only  difference  between  the 
civil  liability  for  an  injury  from  one  person  and  from  the  same 
acts  done  by  a  conspiracy  is  in  the  greater  probability  of  in- 
jury in  the  latter  case.  The  threat  of  such  injury  from  which 
irreparable  injury  would  flow  warranted  the  relief  by  injunc- 
tion to  prevent  the  injury. 

1  In  re  Bessette,  111  Fed.  Rep.  2  in   re   Debs,   supra;   U.   S.   v. 

417  (1901).  Amalgamated  Ass'n,  supra;  Clime 

V.  U.  S.,  supra. 


154  LABOR   COMBINATIONS  IN  INTERSTATE   COMMERCE,  [§    95 

It  should  be  observed  however  that  a  conspiracy  may  con- 
sist in  a  combination  to  accomplish  a  lawful  end  by  means 
which  are  unlawful,  though  not  criminal  in  the  sense  that 
they  are  made  punishable  by  statute.  All  criminal  acts  are 
unlawful,  but  unlawful  acts  are  not  all  criminal.  As  a  con- 
certed peaceful  cessation  from  labor  is  lawful,  there  can  be  no 
basis  of  a  charge  of  conspiracy  in  such  cases,  unless  unlawful 
means  are  employed  in  furtherance  of  the  purposes  of  the 
strike.  There  can  be  no  conspiracy  in  the  exercise  of  a  lawful 
right  by  lawful  means,  and  it  is  immaterial  in  such  a  case  what 
may  be  the  motive  in  this  exercise  of  a  lawful  right.  As  men 
may  leave  their  employment  at  will,  when  not  under  contract, 
so  the  employer  may  exercise  his  right  of  terminating  the  re- 
lation, where  there  is  no  contract,  whatever  the  motive,  and 
no  charge  of  conspiracy  can  be  based  upon  such  exercise  of  a 
lawful  right,^ 

§  95  (83).  Distinguished  from  common-law  conspiracy. — 
Conspiracy  under  the  laws  of  the  United  States  as  rpplied  in 
interstate  commerce  cases  is  to  be  distinguished  from  common- 
law  conspiracy,  which  is  in  force  in  some  of  the  states.  Thus, 
in  England  it  was  found  necessary  to  legalize  strikes  of  work- 
ingmen  by  the  enactment  of  the  "Conspiracy  and  Protection 
of  Property  Act"  of  1875.2  tj^^  |^^.  ^^  ^^^  United  States  re- 
quires an  act  to  be  done  affecting  the  object  of  the  conspiracy, 
that  is,  an  overt  act,  and  the  conspiracy  must  relate  to  an  of- 
fense against  the  United  States  or  the  defrauding  the  United 

1  Boyer  v.  Western  Union  Tel.  person  guilty  of  a  con^.piracy  for 
Co.,  124  Fed.  Rep.  246  (E.  Dist.  which  a  punishment  is  awarded  by 
of  Mo.   1903).  act  of  parliament. 

2  38,  39  Vic.  c.  86,  providing  It  was  held  in  Regina  v.  Bauld, 
that  an  agreement  or  combination  13  Cox  C,  C,  282  (1876),  that  un- 
by  two  or  more  persons  to  do  or  to  der  this  act  neither  master  nor 
procure  to  be  done  any  act  in  con-  m.en  had  a  right  to  take  any  pro- 
templation  or  furtherance  of  a  ceedings  to  compel  o^her  masters 
trade  dispute  between  employers  or  men  Lo  adopt  their  views  on  any 
and  workingmen  shall  not  be  in-  trade  question.  With  this  section 
dictable  as  a  conspiracy,  for  such  were  also  enacted  certain  limita- 
act,  if  committed  by  one  person,  tions  and  restrictions  upon  the 
would  not  be  punishable  as  a  "besetting"  by  picketing  and  solic- 
crime.      Nothing    in    this    section  itation  in  case  of  strikes 

shall  exempt  from  punishment  any 


§    96]         LABOR  COMBINATIONS  IN  INTERSTATE   COMMERCE.  155 

States.  Not  only  obstruction  of  the  mails,  but  any  direct  and 
intended  interference  with  interstate  commerce,  if  committed 
by  one  person,  is  an  offense  against  the  United  States,  and  pun- 
ishable as  sueh.^  The  law  of  conspiracy  therefore  in  such  a 
case  is  not  the  basis  of  the  criminal  action,  as  the  offense  is 
not  made  by  the  combination,  but  by  the  illegality  of  the  end 
proposed,  whether  the  means  employed  are  lawful  or  unlawful. 
The  enactment  of  the  English  statute  by  congress  would  have 
no  material  bearing  upon  the  law  of  conspiracy  as  now  applied 
in  interstate  commerce  cases.  As  a  concerted  peaceable  cessa- 
tion from  labor  is  lawful,  in  interstate  employment  as  in  any 
other,  there  is  in  such  cases  no  illegality  in  the  object  sought, 
and  no  statute  is  required  to  legalize  such  action. 

The  English  statute  only  applies  to  criminal  prosecutions 
for  conspiracies,  and  combinations  for  unlawful,  though  not 
criminal  ends,  as  the  destruction  or  injury  of  another's  prop- 
erty or  business,  without  justifiable  reason,  are  still  unlawful 
in  England,  and  still  constitute  the  basis  of  civil  liability. 

§  96  (84).  Interstate  commerce  in  relation  to  employes 
therein. — There  has  been  some  difference  of  judicial  opinion 
as  to  the  illegality  of  boycotts  when  unattended  with  violence, 
intimidation  or  other  illegal  methods,  that  is  whether  in  the 
absence  of  statute,  the  act  which  one  might  lawfuly  do,  as  the 
withholding  of  patronage  from  another,  is  made  illegal  by 
combinations  with  others  to  do  the  same  act.  Thus  it  has  been 
said  that  malice  or  the  specific  intent  to  injure  the  party  may 
constitute  a  combination  an  illegal  conspiracy,  while  other  au- 
thorities have  based  the  legal  right  to  relief  upon  the  greater 
probability  of  injury  in  the  case  of  a  combination,  and  it  has 
been  denied  that  private  malice  can  be  an  ingredient  in  mak- 
ing a  civil  action,^  except  in  certain  recognized  exceptions  where 
malice  is  essential,  as  in  malicious  prosecution. 

1  Sec.  10  of  Interstate  Com-  Weekly  Law  Bui.  48,  and  7  Rail- 
merce  Act,  infra.  way    &    Corp.    Law    Journal,    108 

2  See  prevailing  and  dissentinp  (1890);  Allen  v.  Flood.  67  L.  J. 
opinions  in  Hopkins  V.  Oxley  Stave  Q.  B.  Rep.  119;  (1898),  App. 
Co.,  supra,  and  Vegelhan  v.  Hun-  Cases  1;  Paper  of  L.  C.  Karuthoff 
ter,  167  Mass.  92  (1886);  Taft,  J.,  on  Malice  as  an  Ingredient  of 
on  the  state  bench  of  Ohio,  in  Civil  Actions,  American  Bar  As- 
Moores  v.  Bricklayers'  Union,  23  sociation  of  1898. 


156  LABOR  COMBINATIONS  IN  INTERSTATE   COMMERCE.         [§    96 

This  distinction,  however,  is  academic  rather  than  practical 
in  its  relations  to  interstate  commerce.  There  is  an  obvious 
distinction  between  the  relations  of  ^Kasi-public  corporations, 
such  as  carriers  to  their  employes, — which  is  emphasized  by 
their  connection  with  interstate  commerce,  and  thus  a  matter 
of  direct  federal  concern, — and  that  of  private  employers  to 
their  employes,  which  grows  out  of  the  peculiar  relations  of 
such  carriers  to  the  public.  The  former  cannot  "lock  out" 
their  employes  by  suspending  business  for  a  time  because  of 
unsatisfactory  labor  conditions  which  prevent  them  from  do- 
ing business  profitably,  and  in  such  matter  they  have  not  the 
rights  which  may  be  exercised  by  private  manufacturers.  The 
cars  must  continue  to  move  and  traffic  must  continue  to  flow. 
Any  interference  with  the  traffic  therefore  except  that  which 
is  the  incidental  result  of  the  exercise  of  a  lawful  right,  as  the 
ceasing  from  employment  for  the  betterment  of  one's  own  con- 
ditions, is  unlawful. 

This  principle  does  not  require  the  existence  of  through 
routing  arrangements  between  carriers,  but  rests  on  the  broad 
declaration  of  national  policy  which  requires  the  interchange 
of  traffic,  whether  through  routing  under  contractual  arrange- 
ments exists,  or  not. 

This  immunity  of  interstate  commerce  from  direct  interfer- 
ence not  justified  by  the  lawful  exercise  of  rights  is  not  lim- 
ited to  railroads  or  other  interstate  carriers,  but  is  applicable 
to  any  parties  engaged  in  transporting  or  handling  interstate 
traffic,  such  as  teamsters,  draymen,  transfer  employes,  or 
others,  that  is  wherever  the  services  are  essential  to  the  con- 
tinued moving  of  interstate  traffic  from  the  point  of  shipment 

The  weight  of  American  author-  spiracy  in  boycott  cases  were  sus- 
ity  is  condemnatory  of  "boycotts,"  tained.  See  also  Casey  v.  Central 
that  is,  of  organized  efforts  to  de-  Typo.  Union,  45  Fed.  Rep.  135 
stroy  another's  business.  The  (1891);  Old  Dominion  S.  S.  Co.  v. 
cases  are  usually  complicated,  McKenna,  30  Fed.  Rep.  49  (1887) 
however,  with  distinctly  illegal  (So.  Dist.  of  Ohio) ;  Carew  v. 
"means."  See  State  v.  Glidden,  55  Rutherford,  106  Mass.  1;  Walker 
Conn.  46  (1887) ;  Crump  v.  Com-  v.  Cronin,  107  Mass.  555;  Doremus 
monwealth,  84  Va.  927  (1889);  v.  Hennesy,  17G  111.  608;  Lucke  v. 
State  V.  Stewart,  59  Vt.  273  (1887) ;  Clothing  Cutters  &  Trimmers  As- 
State  V.  Donaldson,  32  N.  J.  Law,  sembly,  77  Md.  396. 
151,   where    indictments   for    con- 


§    97 J         LABOR  COMBINATIONS  IN  INTERSTATE  COMMERCE.  157 

by  the  consignor  in  one  state  to  tlie  delivery  to  the  consignee 
in  anotlier  state. ^  Thus  combinations  in  restraint  of  inter- 
state commerce  are  obnoxious  to  the  federal  law,  though  the 
subjects  of  such  contracts  are  within  the  jurisdiction  of  the 
state.-  A  boycott  involving  any  form  of  interference  with  in- 
terstate traffic  at  any  stage  would  be  unlawful.^  Thus,  a 
combination  in  New  Orleans  to  enforce  the  employment  of 
none  but  union  men  in  all  dei)artments  of  labor  became  a  com- 
bination in  restraint  of  interstate  commerce  within  the  mean- 
ing of  the  statute  when,  in  order  to  gain  its  ends,  it  sought  to 
bring  about  a  discontinuance  of  labor  in  all  departments  of 
business  including  the  transportation  of  goods  from  state  to 
state  and  from  foreign  nations.* 

§  97  (85).  "Picketing"  and  "soliciting"  in  interstate  com- 
merce.— The  same  distinction  is  to  be  applied  and  the  same 
distinction  recognized  in  determining  the  rights  of  striking 
employes  in  picketing  the  approaches  to  stations  or  besetting, 
by  soliciting  or  otherwise,  their  fellow-employes  who  do  not 
strike,  or  those  who  are  employed  to  take  their  places.  It  is 
not  within  the  scope  of  this  work  to  consider  what  is  the  ex- 
tent or  what  are  the  limitations  of  the  right  to  picket  or  solicit 
in  private  employment.  Such  questions  are  frequently  pre- 
sented to  the  state  courts,  and  also  in  the  federal  courts  in 
cases  where  their  jurisdiction  is  invoked  on  grounds  of  diverse 
citizenship,  and  no  distinctly  federal  question  is  involved.^ 
The  public  interest,  which  is  not  considered  paramount  in 
ordinary  trade  disputes,  that  is,  the  public  convenience  and 
even  the  public  necessities,  are  often  not  given  the  weight 
that  they  should  have.  But  wherever  interstate  or  foreign 
commerce  is  involved,  this  public  interest  is  made  paramount 
by  the  laws  of  the  United  States.  All  classes  of  the  community, 
workingmen  as  well  as  capitalists,  are  interested  in  the  prompt 
transmission  of  the  mails  and  the  uninterrupted  carriage  of 
persons  and  freight. 

iSee  Rhodes  v.  Iowa,  170  U.  S.  *  United     States     v.     Working- 

412,  42  L.  Ed.  1088   (1897).  men's     Amalgamated    Council     of 

2Addyston  Pipe  &  Steel  Co.  v.  New  Orleans    (E.  D.  of  La.),  su- 

United      States,      supra;     United  pro. 

States  V.  Swift,  122  Fed.  Rep.  529  s  Kolley  v.  Robinson    (C.  C.  A., 

(N.    Dist.   of   111.)    (1903).  Sth     Cir.),     187     Fed.     415;      Iron 

sSee  Knudson  V.  Benn  (Dist.  of  Moulders'     Union     v.     Allis-Clial- 

Minn,),  123  Fed.  Rep.  636   (1903).  mers    (C.  C.  A.,  7th  Cir.),  supra. 


158  LABOR  COMBINATIONS  IN  INTERSTATE   COMMERCE.         [§^  98 

Any  form  of  interference  therefore  with  the  free  move- 
ment of  interstate  traffic,  whether  by  picketing  or  soliciting, 
or  any  form  of  obstruction,  would  be  a  direct  interference 
with  interstate  commerce  and  unlawful  as  such,  when  it  is  not 
the  incidental  result  of  the  exercise  of  a  lawful  right,  as  the 
concerted  cessation  from  employment.  It  is  true  that  a  con- 
certed cessation  from  employment,  as  in  strikes,  results  also 
in  an  interference  with  interstate  commerce,  and  may  involve 
widespread  public  inconvenience  and  suffering,  but  that  is  the 
incidental  result  of  the  exercise  of  a  lawful  right.  After  this 
right  is  exercised,  the  interference  thereafter  resulting  from 
boycotting  any  interstate  traffic,  or  soliciting  or  besetting  em- 
ployes in  such  commerce  to  leave  their  employment,  is  not 
incidental,  but  is  caused  by  a  direct  interference  with  inter- 
state commerce.  This  distinction  is  not  based  upon  any  favor 
to  the  carrier,  or  for  any  abridgment  of  the  rights  of  employes, 
but  because  the  public  interest,  which  concerns  all  citizens 
alike,  is  paramount.^ 

§  98  (86).  The  status  of  interstate  railroad  employes  is  tha,t 
of  free  contract. — The  relation  of  interstate  carriers  to  their 
employes  is  that  of  free  contract,  terminable  by  either  party, 
subject  to  the  terms  of  the  contract.  This  relation  therefore 
is  not  analogous  to  that  of  seamen  in  the  maritime  service, 
Avho  to  a  certain  extent  surrender  their  liberty  in  their  em- 
plo^onent  and  are  punishable  for  an  unlawful  desertion.-  It 
was  said  in  Arthur  v.  Oakes  ^  that,  in  the  absence  of  legisla- 

1  United  States  v.  Working-  that  full  and  intelligent  responsi- 
men's  Amalgamated  Council,  bility  for  their  acts  which  is  ac- 
supra;  Knudson  v.  Benn,  supra  credited  to  ordinary  adults,  and  as 
(Minn.);  Union  Pacific  R.  Co.  v.  needing  the  protection  of  the  law, 
Ruef  (Dist.  of  Neb.),  120  Fed.  Rep.  in  the  same  sense  in  y\-hich  minors 
102    (1902).  and  wards  are  entitled  to  the  pro- 

2  The  supreme  court  said,  Rob-  tection  of  their  parents  and  guard- 
ertson  v.  Baldwin  165  U.  S.  1.  c.  ians."  Harlan,  J.,  dissented,  say- 
287,  41  L.  Ed.  715  (1896),  in  sus-  ing  that  the  holding  of  any  person 
taining  the  constitutionality  of  in  custody  for  the  purpose  of  com- 
sections  4598  and  4599,  R.  S.  U.  S.,  polling  him  to  render  personal 
3  Comp.  Stat.  p.  3115,  authorizing  service  in  a  private  business  was 
apprehension  of  deserting  seamen,  "Involuntary  servitude,"  prohib- 
that  "seamen  are  treated  by  con-  ed  by  the  constitution. 

gress,  as  well  as  by  the  parliament  s  n  C.  C.  A.  209,  and  63   Fed. 

of  Great  Britain,   as   deficient  in      Rep.  310  (1894). 


§    98]  LADOR  COMBIXATIOXS  IX  IXTKRSTATE   COMMERCE.  159 

tioii  to  the  contrary,  tlio  i-iglit  of  one  in  the  service  of  a  quasi- 
public  corporation  to  withdraw  liimself  at  such  time  as  he  sees 
fit,  and  the  right  of  the  managers  of  the  corporation  to  dis- 
charge an  emploj'e  whenever  they  see  fit,  must  be  deemed  so 
far  absolute  that  no  court  could  compel  the  continuance  of  the 
employment  on  the  demand  of  either  party. 

It  has  been  suggested  that  there  are  limits  upon  the  right  of 
the  employes  of  a  railroad  to  abandon  their  employment ;  that 
is,  that  it  should  not  be  exercised  at  a  time  or  under  circum- 
stances indicating  a  purpose  to  obstruct  commerce  or  to  pre- 
vent its  operation,  ratlier  than  to  exercise  the  lawful  right 
of  withdrawal  from  employment.^  Thus  the  supreme  court, 
in  affirming  the  jurisdiction  of  the  circuit  court  in  punishing 
an  engineer  for  contempt  of  an  injunction,-  said  that  it  was 
not  necessary  to  decide  whether  an  engineer  may  suddenly 
and  without  notice  quit  the  service  of  a  railroad  company  at 
an  intermediate  station  or  between  stations,  though  cases  may 
be  imagined  where  the  sudden  abandonment  of  a  trainload  of 
passengers  might  imperil  their  safety  or  even  their  lives,  as  in 
this  case  the  court  below  had  found  from  the  testimony  that 
the  petitioner  did  not  quit  in  good  faith,  but  intended  to  con- 
tinue in  the  company's  service,  and  that  his  conduct  was  a 
device  to  avoid  obeying  the  order  of  the  court. 
.  This  subject  of  the  exercise  of  the  right  to  leave  employment 
was  discussed  by  the  circuit  court  of  appeals  for  the  seventh 
circuit  in  an  opinion  by  Justice  Harlan  ^  in  a  case  wherein  the 

1  While     there     is     no     federal  train  at  any  other  place  than  the 

statute  on  the  subject,  there  are  regular  scheduled  end  of  the  road, 

special  statutory  provisions  in  the  Illinois  Revised  Statutes,  3  Starr 

several     states,     Maine,     Pennsyl-  &   Curtis,   p.    3297;    Maine   R.    S. 

vania,       Illinois,       New       Jersey,  1903,  p.  927,  sec.  7;   Pennsylvania 

Kansas,     Delaware     and     Missis-  R.  S.  Purdon's  Dig.  920;   New  Jer- 

sippi,  the  purpose  of  which  is  to  sey  R.   S.  1S95,  p.   269'6,  sec.  245; 

prevent     such     sudden     abandon-  Kansas  R.  S.  1909,  sec.  2384;   Del- 

ment  of  employment  as  should  en-  aware  R.  S.,  p.  928;  Mississippi  R. 

danger  life  or  seriously   obstruct  S.    1906,  sec.   1345.     See   also   Re- 

the    actual    physical    use    of    the  port    of    Industrial     Commission, 

railroad.     In  several  of  the  states  vol.  5,  p.  132;  vol.  17.  p.  601. 

the    provision    is    made    that    no  2  in  re  Lennon,   166   U.    S.   548 

locomotive  engineer,  and  in  some  (1807).  41  L.  Ed.  1110. 

states    conductors    and    trainmen,  s  Arthur  v.  Oakes,  supra. 
shall  abandon  the  locomotive  and 


IGO  LABOR  COMBINATIONS  IN  INTERSTATE   COMMERCE.  [§    99 

court  below  had  made  an  order  enjoining  employes  from  so 
quitting  the  service  of  the  receivers,  "with  or  without  notice, 
as  to  cripple  the  property  or  prevent  the  operation  of  the  rail- 
road." The  court  said  that  the  latter  words,  "as'to  cri]3ple  the 
property,"  etc.,  should  be  stricken  out.  The  fact  that  employes 
of  railroads  may  quit  under  circumstances  which  would  show 
bad  faith  or  reckless  disregard  of  their  contracts,  or  the  con- 
venience or  interests  of  both  the  employer  and  the  public,  did 
not  justify  a  departure  from  the  general  rule  that  equity  would 
not  require  employes  against  their  will  to  remain  in  the  per- 
sonal service  of  the  employer.  The  court  ruled  however  that 
the  injunction  properly  prohibited  the  employes  from  com- 
bining and  conspiring  to  quit  with  or  without  notice  the  serv- 
ice of  the  receivers  'Svith  the  object  and  intent  of  crippling 
the  property  in  their  custody  or  embarrassing  the  operation 
of  the  railroad." 

This  case  was  not  based  upon  either  the  Interstate  Com- 
merce Aot  or  the  Anti-Trust  Act,  but,  as  the  court  said,  upon 
the  general  principles  which  controlled  the  exercise  of  juris- 
diction by  courts  of  equity. 

§  99  (87).  The  right  of  labor  organization  includes  the 
right  of  representation. — The  right  of  organization  into  unions 
or  brotherhoods  bj;  the  employes  of  interstate  railroads  is 
recognized  both  by  the  federal  statutes  ^  and  by  the  courts, 
and  this  right  carries  with  it  the  recognition  of  the  right  of 
"collective  bargaining"  by  employes  through  their  organi- 
zations in  the  betterment  of  their  own  conditions  of  service. 
Incidental  to  this  right  thus  recognized  is  the  right  of  repre- 
sentation of  employes  by  their  own  officials  selected  by  them 
in  the  presentation  of  their  demands  for  the  betterment  of  their 
conditions  of  service.  A  distinction  is  properly  made  betAvcc}i 
such  representatives  of  employes  who  seek  the  redress  of  the 
grievances  of  those  represented  by  them,  and  the  status  of 
those  not  connected  with  employes  who  seek  to  induce  them 
to  break  their  contracts  of  employment  for  other  purposes 
than  their  o^vn  betterment.^     This  right  of  representation  was 

1  See  National  statute  of  arbi-  Co.,  supra:  see  also  charge  of 
tration,  supra.  Judge    Grosscup    to    grand    jury, 

2  Thomas  v.  C,  N.  O.  &  T.  P.  R       supra. 


§    lOOj       LABOR   COMBINATIONS   JN   INTERSTATE   COMMERCE.  IGl 

directly  involved  in  a  case  decided  by  Judge  Adams  in  the 
eastern  district  of  [Missouri.'  In  lliis  c;i.sc  an  injuiu-tion  was 
sought  by  the  railroad  company  against  the  ofTicials  of  the  rail- 
road brotherhoods  of  trainmen  and  firemen  enjoining  them  from 
calling  a  strike  on  an  interstate  railroad  on  the  ground,  among 
others,  that  these  officials  -were  not  employes  of  the  railroad, 
and  that  their  action  in  calling  a  strike  would  be  a  direct  in- 
terference with  interstate  commerce.  The  court  found  from 
the  evidence  that  there  was  an  existing  dispute  about  the  con- 
ditions of  employment  and  that  the  officers  of  the  brotherhood 
had  been  directed  by  the  employes  on  the  road  to  call  a  strike 
and  therefore  held  that  the  employes  had  a  right  to  act  by 
their  representatives,  and  the  injunction  was  dissolved. 

§  100  (88).  Injunctions  in  interstate  commerce. — In  a 
progressive  industrial  civilization  preventive  remedies  are 
frequently  the  only  adequate  remedies  when  business  or  prop- 
erty rights  are  invaded,  particularly  when  there  is  any  ques- 
tion as  to  the  pecuniary  responsibility  of  the  parties  charged 
with  the  wrong.  This  is  the  case  with  labor  disturbances 
wliich  involve  a  direct  interruption  of  business  and  damages, 
which  are  in  the  nature  of  things  irreparable,  because  they 
cannot  be  accurately  ascertained,  even  if  the  defendants  were 
responsible.  AVhere  the  public  interest  intervenes,  as  in  the 
case  of  interstate  commerce,  wdiere  the  traffic  must  continue 
to  be  moved  and  the  cars  continue  to  run,  some  form  of  pre- 
ventive relief,  usually  that  of  injunction,  is  ordinarily  the 
only  available  remedy. 

The  influence  upon  our  jurisprudence  of  the  ancient  historic 
jealousy  of  courts  of  chancery  -  is  illustrated  in  the  conten- 

1  Wabash  R.  R.  Co.  v.  Hanna-  grant  injunctions  when  It  shall 
han  et  al.,  supy-a.  appear  to  the  court  to  be  just  or 

2  The  use  of  preventive  reme-  convenient  that  such  shall  be 
dies  seems  more  firmly  estab-  made  (subsec.  8,  sec.  25  Judi- 
lished  in  the  English  courts  than  cature  Act,  1873),  and  to  award 
in  our  own.  The  distinction  be-*  damages  in  addition  to  or  in  sub- 
tween  the  powers  of  courts  of  law  stitution  for  such  injunction, 
and  courts  of  equity  has  there  On  the  general  subject  of  the 
now  only  historical  interest.  All  modern  use  of  injunctions,  see  F. 
divisions  of  the  supreme  court  of  J.  Stimson  in  Political  Science 
Judicature    have    jurisdiction    to  Quarterly,     June,     1S95;     Charles 

11 


1G2  LABOR  COMBIXATIOXS  IN  INTERSTATE   COMMERCE.       [§    100 

tiou  tliat  Avliere  the  trespasses  or  otlier  wrongs  to  business  or 
other  propert}'  involve  a  violation  of  criminal  law,  there  is  no 
jurisdiction  in  equity  to  enjoin  the  commission  of  the  acts. 
This  contention  is  obviously  unsound.  The  injunction  re- 
strains not  the  crime,  but  the  irreparable  injury  to  property. 
The  ciuestion  was  definitely  settled  by  the  supreme  court  in 
the  Debs  case,^  where  the  court  held  that  while  a  chancellor 
had  no  criminal  jurisdiction,  and  something  more  than  the 
threatened  commission  of  an  offense  against  the  laws  of  the 
land  was  necessary  to  call  into  exercise  the  injunctive  power 
of  the  court,  that  when  interference  with  property,  actual  or 
threatened,  appeared,  the  jurisdiction  of  the  court  of  equity 
arises,  and  is  not  destroyed  by  the  fact  that  the  interferences 
are  accompanied  by  or  are  themselves  a  violation  of  the  crimi- 
nal law.  The  jurisdiction  of  the  civil  court  is  invoked,  not  to 
enforce  the  criminal  law  and  to  punish  the  wrong-doer,  but  to 
compensate  the  injured  party  for  the  damages  which  he  has 
suffered,  or  to  protect  him  from  irreparable  injury,  and  it  is  no 
defense  to  the  civil  action  that  the  same  act  by  defendant  ex- 
poses him  also  to  indictment  and  punishment  in  a  court  of 
criminal  jurisdiction.  In  this  case  the-  injunction  was  sought 
by  the  government  itself,  and  it  is  obvious  that  the  right  of 
any  other  litigant  to  preventive  relief  in  the  case  of  threatened 
irreparable  injury  to  property  by  criminal  trespass  would  be 
also  available. 

The  same  remedy  of  injunction  was  invoked  by  the  govern- 
ment against  the  railroads  of  the  country  in  the  proceedings 
"under  the  Anti-Trust  Act,-  and  also  against,  combinations  of 
'capitalists  under  the  same  statute.'  In  the  Beef  Trust  case,* 
the  supreme  court  affirmed  the  decree  of  the  circuit  of  Illinois 
enjoining  the  defendants  in  a  suit  by  the  United  States  against 
certain  specific  acts  in  restraint  of  competition  in  interstate- 
commerce. 

In  this  latter  case  however  the  court  directed  a  modifica- 

Claflin  Allen  at  American  Bar  As-  Missouri       Freight       Association; 

sociation,     1894;     Hon.     Wm.     H.  United  States  v.  Joint  Traffic  As- 

Taft,    then    circuit    judge,    in    de-  sociation,    and    United    States    v. 

fense     of    the     federal     judiciary,  Northern     Securities    Co.,    supra; 

American  Bar  Association,  1895.  Swift  v.  United  States,  196  U.  S. 

1158  U.  S.  1.  C.  p.  593,  39  L.  Ed.  375,  49  L.  Ed.   518    (1905). 

HOG,  supra.  s  See  Anti-Trust  Law,  infra. 

2  See    United    States    v.    Trans-  *  Swift  v.   United    States,   infra. 


§    lOUj       LABOR  COMBINATIONS  IN  INTERSTATE   CO.AIMEKCi:.  163 

tion  of  the  injunction  by  striking  out  the  general  words  "or 
by  any  other  method  or  device,  the  purpose  and  effect  of 
which  is  to  restrain  commerce  as  aforesaid,"  saying  that  the 
defendants  ought  to  be  informed  as  accurately  as  the  case  per- 
mitted wliat  II103'  were  forbidden  to  do.  The  court  said  that 
while  it  was  bound  to  enforce  the  act,  it  was  also  bound  by  the 
first  principles  of  justice  not  to  sanction  a  decree  so  vague  as 
to  put  the  whole  conduct  of  defendant's  business  at  tlie  peril 
of  a  summons  for  contempt,  and  that  it  could  not  issue  a  gen- 
eral injunction  against  all  possible  breaches  of  the  law. 

There  has  been  considerable  discussion  in  the  courts  and 
also  in  the  committees  of  congress  as  to  the  scope  of  injunc- 
tions rendered  in  trade  disputes.  Thus,  in  the  Debs  case  the 
injunction  order  included  all  persons  whatsoever,  not  named 
therein,  from  and  after  the  time  when  they  shall  severally 
have  notice  of  such  order.  The  question  as  to  the  scope  of 
the  order  was  not  definitely  determined,  as  the  order  was 
issued  and  served  upon  the  defendant,  so  that  this  feature  of 
the  order  Avas  not  discussed  in  the  supreme  court,  although 
tlie  power  of  the  court  under  such  an  order  was  sustained  in 
the  circuit  court. ^ 

Persons  who  are  in  privity  with  the  defendant  as  agents, 
servants  or  employes  are  to  be  distinguished  from  independ- 
ent tort-feasors  who  are  not  shown  to  be  in  any  wise  allied 
with  the  defendants.-  The  supreme  court  sustained  the  juris- 
diction of  the  circuit  court  in  the  case  of  In  re  Lennon.^  say- 
ing that  it  was  sufficient  that  he  had  actual  notice,  although 
he  was  not  a  party  to  the  suit,  nor  served  with  process;  in 
that  case  however  Lennon  was  an  employe  of  the  defendant, 
which  had  been  enjoined  from  refusing  to  interchange  traffic 
with  the  complainant,  and  he  was  shown,  with  full  knowledge 
of  the  injunction,  to  have  refused  to  obey  it. 

Other  questions  have  been  raised  as  to  the  proper  scope  of 
injunctions  in  trade  disputes,  particular!}^  with  reference  to 

1  Toledo,  etc.  R.  Co.  v.  Penn.  R  cedure  thereimder,  see  Anti-Trust 

Co.,   supra;   In    re   Debts,   supra.  Act,  itifra,  section  4. 

As  to  the  jurisdiction  of  tlie  courts  -  In  re  Reese,  98  Fed.  Rep.  984, 

in    issuing   injunctions   under   the  47  C.  C.  A.  87,  and  107  Fed.  Rep. 

Interstate  Commerce  Act,  see  sees.  942   (1900). 

8  and  9  of  Act,  infra:  and  as  to  s  Supra. 
the  Anti-Trust  Act   and   the   pro- 


164  LABOR  COMBINATIONS  IN  INTERSTATE   COMMERCE.       [§    101 

the  conduct  of  striking  employes,  but  these  have  been  in  cases, 
where  the  jurisdiction  of  the  federal  courts  was  based  on 
diverse  citizenship  as  in  mining,  manufacturing  and  other  local 
industries  where  interstate  commerce  was  in  no  wise  involved.^ 

§  101  (89).  Contempt  in  United  States  courts. — ^A  contempt 
proceeding,  said  the  supreme  court  in  a  recent  ease,-  is  crimi- 
nal in  its  nature  in  that  the  party  is  charged  with  doing  some- 
thing forbidden,  and  if  found  guilty,  is  punished.  Yet  it  may 
be  resorted  to  in  civil  as  well  as  in  criminal  actions,  and  also 
independently  of  civil  or  criminal  action.  "While  the  power 
to  punish  for  contempts  in  inherent  in  all  courts,  the  exer- 
cise of  the  power  by  the  courts  of  the  United  States  has  been 
regulated  by  statute,  as  follows :  ^ 

"Courts  of  the  United  States  shall  have  power  to  impose 
and  administer  all  necessary  oaths  and  to  punish  by  fine  or 
imprisonment  at  the  discretion  of  the  courts  contempt  of  their 
authority;  provided  that  such  power  to  punish  for  contempt 
shall  not  be  construed  to  extend  to  any  case  except  the  mis- 
behavior of  any  person  in  their  presence,  or  so  near  thereto  as 
to  obstruct  the  officers  of  said  court  in  their  official  transac- 
tions, and  the  disobedience  or  resistence  by  such  officer  or  by 
any  party,  juror,  witness  or  other  person  to  any  lawful  order, 
process,  rule,  decree,  or  command  of  said  court." 

"Whether  a  particular  act  constitutes  a  contempt,  as  well  as 
the  mode  of  proceeding  against  the  offender,  are  left  to  be  de- 
termined according  to  such  established  rules  of  the  common 
law  as  are  applicable  to  the  situation.  A  federal  court  may 
punish  for  contempt  in  its  presence,  or  so  near  as  to  obstruct 
justice  though  the  offense  is  indictable.* 

1  See  §  91,  supra;  see  also  dis-  spiracy"  and  the  use  of  restrain- 
cussion  before  the  Judiciary  Com,-  ing  orders  and  injunctions  in  trade 
mittee  of  the  House  of  Represent-  disputes,  which  has  been  intro- 
atlves  of  the  58th  congress.  The  duced  in  several  successive  con- 
agitation  over  the  increased  use  gresses,  but  has  not  been  enacted 
of   injunctions    in   trade   disputes  into  law. 

and  the  application  of  the  law  of  2  Bessette  v.  Conkey  Co.,  194  U. 

conspiracy    in    the    trial    of    con-  S.  324,  48  L.  Ed.  997  (1904). 

tempts  has  been   extensively   dis-  s  Sec.  725,  R.  S.  U.  S.,  1  Comp. 

cussed  in  congress   in  connection  Stats,  p.  583. 

with  the  so-called  Anti-Conspiracy  *In  re  Savin,  131  U.  S.  267,  3a 

and  Anti-Injunction  bill,  to  limit  L.  Ed.  150  (1889). 
the   meaning    of    the    word    "con- 


§    102]      LABOR  COMBINATIONS  IN  INTERSTATE   COMMKRCE.  IGO 

The  interference  with  the  operation  of  a  road  by  a  receiver 
appointed  by  the  federal  court  is  itself  a  contempt,  as  the  re- 
ceiver is  an  officer  of  the  court,  and  no  specific  injunction 
order  in  such  case  is  required.^  The  power  of  the  court  to 
punish  disobedience  of  an  injunction  order  by  a  party  to  the 
case  as  u  contempt  has  been  repeatedly  adjudged.-  TIk; 
power  to  punish  for  contempt  is  inherent  in  all  courts  of 
record,  and  it  has  been  held  that  in  the  case  of  courts  estab- 
lished by  the  constitution  this  power  cannot  be  abridged  by 
the  legislature,  as  this  is  the  inherent  power  of  a  co-ordinate 
branch  of  the  government.'' 

It  was  intimated  by  the  supreme  court  however  *  that  the 
power  of  the  circuit  courts  and  district  courts  of  the  United 
States  to  punish  for  contempt  could  be  regulated  by  congress, 
and  that  tlieir  power  is  limited  by  the  act  of  1831,  cited  above, 
and  that  the  power  to  punish  by  fine  and  imprisonment  is  nega- 
tive of  all  other  forms  of  punishment.  The  circuit  court  said 
in  the  Debs  case  ^  that  the  power  of  the  court  to  make  an  order 
carries  with  it  the  equal  power  to  punish  for  disobedience  of 
that  order  and  the  inquiry  as  to  the  question  of  disobedience 
lias  been  from  time  immemorial  within  the  discretion  of  the 
court.  It  was  also  held  that  a  case  of  contempt  was  not  triable 
by  jury,  nor  is  a  judgment  on  such  charge  a  substitute  for,  or 
any  defense  to  a  criminal  prosecution  for  the  same  act. 

§  102.  Direct  and  indirect  contempts. — The  increasing  use 
of  injunctions  in  the  federal  courts  in  trade  disputes,  has  led 
to  a  discussion  on  the  inherent  distinction  between  direct  and 
indirect  contempts,  that  is,  between  those  committed  in  the 
presence  of  the  court  and  properly  subject  as  such  to  summary 
hearing  and  punishment  and  requiring  no  hearing,  as  the 
acts  are  committed  in  the  view  of  the  court,  and  on  the  other 
hand  those  of  alleged  disobedience  to  tlie  orders  of  the  court 
not  committed  in  its  presence,  and  therefore  necessarily  re- 

1  United     States     v.     Kane,     23  3  Carter    v.    Ck)mmonwealth,    96 

Fed.  Rep.  748;   In  re  Doolittle,  23  Va.  791   (1S99). 

Fed.  Rep.  544;   In  re  Higgins,  27  *  Ex   parte   Robinson.    19    Wall. 

Fed.  Rep.  443;  Thomas  v.  R.  Co.,  513.  22  L.  Ed.  205  (1874). 


sup7-a. 

2  Ex  Parte  Lennon,  supra;  In  re 
Debs,  supra. 


6  158  U.  €.,  1.  c  594. 


166 


L-\BOR  COMBIXATIOXS  IN  INTERSTATE   COMMERCE, 


103 


quiring  proof  before  punishment  can  be  imposed.  It  lias  been 
urged  as  to  this  hitter  class  of  cases,  particularly  where  par- 
ties are  charged  with  the  responsibility  of  the  acts  of  others 
under  the  law  of  conspiracy,  that  the  hearing  should  not  be 
summary,  but  that  process  should  be  served,  and  that  the 
procedure  should  be  regulated  by  law  in  accordance  with  con- 
stitutional guarantees  in  criminal  hearings.^ 

§  103.  Criminal  and  civil  contempts. — Contempts  are  also 
classified  as  criminal  contempts,  which  are  prosecuted  to  pre- 
serve the  power  and  vindicate  the  dignity  of  the  court  in  pun- 
ishing the  defendant,  and  as  civil  contempts,  which  are  prose- 
cuted to  preserve  and  enforce  the  rights  of  private  parties 
and  to  compel  obedience  to  orders  and  decrees  so  as  to  enforce 
the  rights  and  administer  the  remedies  to  which  the  court  has 
found  such  parties  to  be  entitled. 

A  criminal  contempt,  said  the  court  of  appeals  in  the  Nevitt 
case,^  involves  no  element  of  personal  injury.     It  is  directed 


1  In  the  54th  congress,  1896,  a 
bill  was  reported  from  the  judi- 
ciary committee,  providing  that 
contempts  be  divided  into  two 
classes,  direct  and  indirect,  the 
former  including  contempts  com- 
mitted during  the  sitting  of  a 
court,  or  of  a  judge  in  chambers, 
or  so  near  thereto  as  to  obstruct 
the  administration  of  justice. 
These  were  to  be  punishable  sum- 
marily, without  written  accusa- 
tion; while  the  other,  that  is,  in- 
direct contempts,  were  to  require 
an  order  to  show  cause  and  a  pro- 
cedure upon  testimony,  as  in 
criminal  cases,  and  a  jury  trial,  if 
applied  for  by  the  accused,  with  a 
preservation  of  the  testimony  by 
bill  of  exceptions  and  stay  of  the 
judgment  upon  giving  bond  pend- 
ing appeal. 

The  provisions  of  the  act  ap- 
plied to  all  proceedings  for  con- 
tempt in  all  courts  except  the  su- 
preme court.     The  bill  passed  the 


senate  and  was  reported  with 
amendments  by  the  house  judi- 
ciary committee  (see  House  Re- 
port No.  2471,  54th  congress),  but 
it  was  not  reached  for  passage. 
It  has  been  introduced  in  sub- 
stantially the  same  form  in  dif- 
ferent congresses  since,  but  has 
not  been  enacted  into  law. 

2  In  re  Nevitt,  Cir.  Ct.  App.. 
8th  Circuit,  55  C.  C.  A.  622,  117 
Fed  Rep.  448  (1902),  quoted  by  ,the 
supreme  court  in  Bessette  v.  W. 
R.  Conkey  Co.,  supra. 

In  Clay  v.  Waters,  178  Fed.  385 
(1910),  C.  C.  A.  8th  circuit,  it 
was  held  that  a  judgment  for  a 
criminal  contempt  committed  in 
the  course  of  a  suit  in  equity,  is 
reversible  by  writ  of  error  only, 
and  that  a  judgment  against  a 
party  to  a  suit  in  equity  for  a 
civil  contempt  committed  therein 
before  final  decree,  is  reversible 
by  appeal  from  the  final  decree 
only,   and   that  judgment   against 


§    103]      LABOR  COMBINATIONS  IN  INTERSTATE   COMMKHCK. 


1(17 


against  tlie  power  and  dignity  of  the  court  and  private  parties 
have  little,  if  any,  interest  in  the  proceedings  for  its  punish- 
ment. 

It  was  said  by  the  supreme  court  in  the  Bessette  case,^ 
which  w^as  a  trade  dispute  not  involving  interstate  commerce, 
that  it  may  not  be  always  easy  to  classify  the  particular  act 
as  belonging  to  either  of  these  two  classes  and  that  it  may 
partake  of  the  characteristics  of  both.  In  combinations  in- 
terfering with  interstate  commerce  whether  the  proceedings 
are  filed  directly  by  government  or  by  public  carriers,  it 
would  seem  that  the  violation  of  the  injunction  order  made 
for  the  promotion  of  public  and  not  private  ends  would  fall 
in  the  class  of  criminal  rather  than  civil  contempts. 

The  fact  that  a  part  of  the  fine  imposed  in  punishment  of  a 
contempt  is  made  payable  to  tire  government  is  not  conclusive 
that  it  is  a  criminal  and  not  a  civil  contempt.-  The  distin- 
guishing characteristic  between  the  civil  and  criminal  con- 
tempt is  the  dominating  object  of  the  prosecution  and  the 
party  chiefly  interested  therein.  In  the  language  of  the  cir- 
cuit court  of  appeals,^  if  the  chief  purpose  of  the  proceed- 


a  party  for  a  civil  contempt  com- 
mitted after  the  decree  is  reversi- 
ble by  appeal. 

11.  c.  p.  329. 

2  In  re  Christensen  Engineer- 
ing Co.,  194  U.  S.  4.59,  48  L.  Ed. 
1072  (1904),  the  court  held  that 
an  order  of  the  circuit  court  ad- 
judging the  defendant  in  a  patent 
suit  guilty  of  a  contempt  in  dis- 
obeying a  preliminary  injunction, 
and  ordering  him  to  pay  a  fine, 
one-half  to  the  complainant  and 
one-half  to  the  United  States  was 
clearly  a  criminal  contempt,  and 
as  such  reviewable  on  writ  of 
error  by  the  circuit  court  of  ap- 
peals without  waiting  for  final  de- 
cree and  mandamus  was  issued 
directing  that  court  to  reinstate 
and  hear  the  case.  In  Merchant's 
Stock  &  Grain  Co.  v.  Board  of 
Trade,   187   Fed.   893    (1911),   the 


circuit  court  of  appeals,  8th  cir- 
cuit, distinguished  from  the  Chris- 
tensen case  a  judgment  against  a 
party  for  violation  of  a  tempor- 
ary Injunction,  although  one- 
fourth  of  the  fine  imposed  was 
paid  to  the  United  States,  and  the 
balance  to  the  complainant,  and 
held  that  the  violation  of  the  or- 
der was  a  civil  contempt,  as  the 
chief  and  dominating  purpose  was 
the  protection  of  the  party  com- 
plainant, and  that  while  a  judg- 
ment for  a  criminal  contempt  was 
reviewable  by  writ  of  error,  a 
judgment  for  a  civil  contempt 
committed  before  final  decree  was 
reviewable  by  appeal  from  the 
final  decree  only,  and  if  it  was 
committed  after  the  final  decree  it 
was  reviewable  by  appeal. 

3  Merchant's  Stock  &  Grain  Co. 
Case,  supra. 


]  1)8  LABOR  COMBINATIONS  IN  INTERSTATE   COMMERCE.       [  §    103 

ing  for  contempt  is  to  enforce  the  rights  and  administer  the 
remedies  to  which  courts  have  adjudged  or  may  adjudge  a 
private  party  to  be  entitled,  and  if  such  private  party  is  the 
person  chiefly  interested  in  it,  the  proceeding  is  for  a  civil  con- 
tempt. If  the  chief  object  of  the  prosecution  as  in  cases  of 
miseouduct  in  court,  or  the  disobedience  of  a  subpoena,  will  be 
punishment  of  the  offender  to  preserve  the  right  and  vindicate 
the  dignity  of  the  court,  and  if  the  party  chiefly  interested  in 
the  prosecution  is  the  government  or  the  public,  the  proceeding 
is  for  a  criminal  contempt. 

The  distinction  between  civil  and  criminal  contempts  was 
forcibly  illustrated  in  the  contempt  proceedings  growing  out 
of  the  litigation  between  the  Buck  Stove  &  Range  Co.  and  the 
American  Federation  of  Labor.^  Individual  officials  of  the 
federation  were  charged  with  contempt  of  the  injunction  in 
publishing  references  to  the  complainants  under  the  headings 
*' unfair"  or  "we  don't  patronize"  and  were  found  guilty  of 
contempt  and  sentenced  to  imprisonment.  Subsequently  the 
litigation  between  the  parties  to  the  suit  was  adjusted  and  the 
case  was  dismissed.  The  supreme  court  held  that  a  contempt 
proceeding  was  as  a  rule  neither  wholly  civil  nor  wholly  crim- 
inal, but  this  proceeding  under  the  facts  of  this  case  was  dis- 
tinctively civil,  and  that  there  was  nothing  in  the  record 
indicating  that  it  was  a  proceeding  with  the  court  or  the 
government  on  one  side  and  the  defendant  on  the  other.  As 
it  was  a  civil  proceeding,  imprisonment  could  only  be  imposed 
as  a  coercive  means  to  compel  the  doing  of  some  act  com- 
manded by  the  court  for  the  benefit  of  the  other  party.     The 

1  Gompers     v.     Buck     Stove     &  left  in  doubt  as  to  whether  relief 

Range  Co.,  220  U.  S. ,  55  L.  Ed.  or  punishment  was  the  object  in 

,    May    15,    1911,    reversing    33  view.     In  a  criminal  contempt  the 

App.  D.  C.  516.  The  court  in  this  defendant  is  entitled  to  the  con- 
<^ase  said  proceedings  at  law  foi  stitutional  protection  against  self 
criminal  contempt  should  be  en-  incrimination  but  not  in  a  pro- 
titled  as  a  separate  action.  That  ceeding  for  civil  contempt.  In  a 
this  was  not  a  mere  matter  of  form  civil  case  the  complainant  is  en- 
as  the  citizen  was  entitled  to  know  titled  to  the  costs,  but  in  a  crim- 
by  a  mere  inspection  of  the  pro-  inal  contempt  the  costs  collected 
ceedings  whether  it  was  instituted  go  to  the  government  for  the  use 
for  private  litigation  or  for  public  of  its  officials, 
prosecution.      He    should    not    be 


§    105]       LABOR  COMBINATIONS  IN  INTERSTATE   COMMERCE.  ]  (J!) 

proceeding  therefore  necessarily  ended  with  the  settlement 
of  the  main  case  of  which  it  was  a  part;  and  it  was  therefore 
dismissed  Avithout  prejudice  to  the  right  of  the  court  to  pun- 
ish by  a  proper  proceeding  any  contempt  which  had  been  com- 
mitted against  its  own  authority. 

§  104.  Conspiracy  and  contempt. — The  law  of  conspiracy 
has  been  applied  in  proceedings  for  contempt,  and  persons  not 
parties  to  the  record  have  been  charged  with  contempt  as  co- 
conspirators with  the  defendants,  and  therefore  in  law  respon- 
sible for  their  acts.^  The  liability  to  punishment  for  contempt 
is  not  limited  to  parties  to  the  record,  but  any  person,  who 
knowingly  assists  in  defeating  the  order  of  a  court,  may  be 
charged  with  contempt  therefor.  In  such  cases,  however,  where 
the  injunction  has  been  issued  for  the  benefit  of  a  private  per- 
son with  no  public  interest  involved,  the  offense  of  the  person 
not  a  party  is  solely  that  of  resistance  to  the  authority  and 
dignity  of  the  court  and  he  should  be  proceeded  against  upon 
that  theory,  and  not  upon  the  theory  of  being  bound  by  the  in- 
junction as  a  party  thereto. - 

An  order  of  a  federal  circuit  court,  adjudging  a  person  not 
a  party  to  a  suit  guilty  of  contempt  for  conspiring  to  violate  an 
injunction  in  a  trade  dispute,  was  held  reviewable  by  writ  of 
error  in  the  circuit  court  of  appeals,  but  in  such  a  writ  only 
matters  of  law  can  be  considered,  the  decision  of  the  trial  trib- 
unal being  conclusive  of  the  facts.' 

§  105  (90).  Mandatory  injunctions  in  interstate  commerce. — 
As  a  preventive  remedy  is  the  only  adequate  remedy  in  the  case 
of  a  threatening  of  interference  Avith  interstate  commerce,  the 
form  of  the  preventive  relief  must  be  adapted  to  the  emergency, 
and  the  injunction  mandatory  in  its  terms  is  therefore  often  the 
only  remedy  which  meets  the  emergency.  A  mandatory  injunc- 
tion is  one  that  compels  the  defendant  to  restore  things  to  their 
former  condition,  and  virtually  directs  him  to  perform  the  act. 
Specific  provision  is  made  in  the  Interstate  Commerce  Act  for  a 

iSee  In  re  Bessette,  111  Fed.  s  Bessette  v.  Conkey  Co..  supra 
Rep.  417.  (1904). 

2  See  In  re  Reese,  98  Fed.  Rep. 
9S4,  supra. 


170 


LABOR  COMBINATIONS  IN  INTERSTATE   COMMERCE. 


105 


mandamus  to  compel  the  performance  of  the  duties  of  a  carrier. 
Section  23  of  the  Interstate  Commerce  Act,  infra. 

Such  an  injunction  may  be  issued  as  well  upon  a  proper  show- 
ing on  a  preliniinaiy  as  on  a  final  hearing.  It  was  said  by 
Taft,  J./  that  the  office  of  a  preliminary  injunction  is  to  per- 
serve  the  status  que  until  upon  final  hearing  the  court  may  grant 
full  relief,  and  generally  tliis  can  be  accomplished  by  an  injunc- 
tion prohibitory  in  form.  It  may  sometimes  happen,  however, 
that  the  status  quo  is  not  a  condition  of  rest,  but  of  action,  and 
the  condition  of  rest  is  exactly  what  will  inflict  an  irreparable 
injury  upon  the  complainant.  In  such  cases  therefore  it  is  only 
a  mandator}^  injunction,  compelling  the  traffic  to  flow  as  it  is 
wont  to  flow,  which  will  protect  the  complainant  from  injury. 

It  was  said  by  the  supreme  court  ^  that  it  is  one  of  the  most 
useful  functions  of  a  court  of  equity  that  its  methods  of  pro- 
cedure are  capable  of  being  made  such  as  to  accomodate  them- 
selves to  the  development  of  the  interests  of  the  public  in  the 
progress  of  trade  and  traffic  by  new  methods  of  intercourse  and 
transportation,  and  it  may  be  added,  in  securing  the  uninter- 
rupted movement  of  commerce.' 


1  Toledo,  A.  A.,  etc.,  R.  Co.  Case, 
supra. 

2  Joy  V.  St.  Louis,  138  U.  S.  1,  1. 
c.  p.  50,  34  L.  Ed.  859   (1891). 

3  In  So.  Cal.  Co.  v,  Rutherford, 
supra,  the  court  granted  an  injunc- 
tion to  a  railroad  company 
against    its    employes,    compelling 


them  to  perform  all  their  regular 
and  accustomed  duties  as  long  as 
they  remain  in  the  employment  of 
the  complainant  company.  This 
was  in  a  case  where  the  employes, 
while  continuing  in  the  serv- 
ice, had  boycotted  the  Pullman 
Car  Co. 


CHAPTER  VII. 
FEDERAL  CONTROL  OF  STATE  RAILROAD  REGULATION. 

§  106.  State  regulation  of  railroads  tlirough  state  commissions. 

107.  Assessment  of  expense  of  state  regulation  upon  railroads. 

108.  State  regulation  not  dependent  upon  state  incorporation. 

109.  Stat^  cannot  regulate  any  part  of  interstate  rates. 

110.  Competitive  effect  of  intrastate  rates  upon  interstate  rates. 

111.  The  fourteenth  amendment. 

112.  Federal  review  of  state  regulation  of  railroads. 

113.  The  federal  jurisdiction  must  be  invoked  on  substantial  grounds. 

114.  Jurisdiction  of  the  federal  courts  not  limited  by  state  legislation. 

115.  Injunctions  against  state  officials  not  violative  of  the  eleventh 

amendment. 

116.  The  regulating  orders  of  state  commissions  legislative,  not  ju- 

dicial. 

117.  Procedure  in  federal  review  of  state  legislation. 

118.  Temporary  injunctions  in  federal  control  of  state  legislation. 

119.  Temporary  injunction  under  act  of  1910. 

120.  Reasonableness  and  confiscation  in  regulation  of  rates. 

121.  State  rates  determined  without  reference  to  interstate  traffic. 

122.  The  supreme  court  on  state  regulation. 

123.  Schedules  of  rates  and  special  rates. 

124.  The  valuation  of  railroad  property  in  state  regulation. 

125.  The  apportionment  of  railroad  property  in  state  regulation. 

126.  Confiscation  in  state  regulation;    how  proved. 

127.  Rate  of  profit  necessary  to  avoid  charge  of  confiscation. 

128.  Protection  of  the  carrier  against  discriminating  state  regulation. 

129.  The  state  power  of  regulation  not  limited  to  rates. 

130.  The  state  anti-trust  laws  and  the  fourteenth  amendment. 

131.  Classification  in  state  railroad  legislation. 

§  106  (91).  State  regulation  of  railroads  through  state  com- 
missions.— The  complexity  of  our  dual  form  of  government  is 
nowhere  more  forcibly  illustrated  than  in  the  administration  of 
the  railway  systems  of  the  country  under  the  state  commissions 
as  to  their  state  traffic,  nnd  under  the  Interstate  Commerce  Cora- 
mission  as  to  their  interstate  traffic.  The  power  of  the  states  to 
regulate  the  rates  of  railroads  and  other  quasi  public  business 
had  been  definitely  established  in  the  Granger  cases,  as  already 
seen,  prior  to  the  adoption  of  the  Interstate  Commerce  Act.  This 
power  of  the  states  could  he  exercised  either  directly  by  the  legis- 
lature fixins:  the  rates,  or  could  he  delegated  to  a  commission  act- 


172         FEDERAL  CONTROL  OF  STATE  RAILROAD  REGULATION.       [§    107 

ing  for  the  state.  Commissions  had  been  established  in  many  of 
the  states  prior  to  1887,  some  Avith  advisory  powers  and  others 
with  powers  to  fix  maximum  rates.^ 

A  railroad  forming  a  continuous  line  in  two  or  more  states, 
and  owned  and  managed  by  a  corporation,  whose  corporate 
jiowers  are  derived  from  the  legislatures  of  each  state  in  which 
the  road  is  situated,-  is  as  to  the  domestic  traffic  of  each  state  a 
corporation  of  that  state,  subject  to  the  laws  of  the  state  not  in 
conflict  with  the  constitution  of  the  United  States,  and  an  author- 
ization of  a  commission  by  a  state  to  lix  a  schedule  of  rates  for 
a  railroad  is  not  an  unconstitutional  delegation  of  legislative 
power.^  Justice  Brewer  said  in  the  case  first  cited  that  the  line 
of  demarcation  between  legislative  and  administrative  functions 
\-7as  not  easily  discernable  and  that  the  reasonableness  of  a  rate 
was  constantly  changing  with  changing  circumstances,  and  there- 
fore was  peculiarly  a  subject  for  an  administrative  board  to  de- 
termine. 

§  107.  Assessment  of  expense  of  state  regulation  upon  rail- 
roads.—The  entire  expenses  of  a  state  railroad  commission,  in- 
cluding the  expenses  and  salaries  of  the  railroad  commissioners, 
may  be  lawfully  assessed  upon  railroads  operating  within  a 
state  according  to  their  gross  income  proportionate  to  the  num- 
ber of  miles  of  their  roads  in  the  state.*    This  tax  was  claimed  to 

1  See  review  of  state  commis-  congress  did  not  attempt  to  exer- 
sion  statutes  in  Maximum  Rate  cise  the  power,  but  assumed  the 
Case,  167  U.  S.  1.  c.  495  (1897),  42  existence  of  the  power,  saying, 
L   Ed    251.  "There    were    three    obvious    and 

2  Railroad  Commission  Cases,  dissimilar  courses  open  for  con- 
116  U.  S.  307  (1886),  29  L.  Ed.  sideration.  Congress  might  itself 
gog  prescribe   the   rates;    or  it  might 

3  Chicago  &  N.  W.  R.  Co.  v.  Dey,  commit  to  some  subordinate  tri- 
35  Fed.  866  (1888);  also  Railroad  bunal  this  duty,  or  it  might  leave 
Commission  Cases,  supra;  Regan  with  the  companies  the  right  to 
v.  Farmers  Loan  &  Trust  Co.,  fix  rates,  subject  to  regulations 
supra.  In  the  Maximum  Rate  and  restrictions  as  well  as  to  that 
Case,  167  U.  S.  supra,  the  court,  in  rule,  which  is  as  old  as  the  exist- 
considering  the  question  whether  ence  of  common  carriers,  to-wit: 
in  the  original  Interstate  Com-  that  rates  must  be  reasonable." 
merce  Act,  before  the  amendment  *  See  Charlotte  C.  &  A.  R.  R.  Co. 
of  1906,  power  was  delegated  to  v.  Gibbs,  142  U.  S.  386,  35  L.  Ed. 
the  Interstate  Commerce  Commis-  page  1051  (1892). 

sion   to   fix   rates,   concluded   that 


§    108]       FEDERAL  CONTIiOI.  OF  STATE  RAILROAD  REGULATION.  ITo 

be  an  nnhiwful  disci iiiiination  imposing  a  new  burden  and  tbeie- 
fore  a  denial  of  e<iual  protection  of  tbe  laws,  as  it  was  be- 
yond that  levied  upon  other  corporations,  and  was  in  ad- 
dition to  the  general  property  tax  levied  upon  the  property 
of  the  railroads  in  like  manner  as  upon  similar  property 
of  individuals  in  proportion  to  value.  The  court  said  that 
the  services  of  the  commission  were  for  the  benefit  of  the 
railroad  corporations  as  well  as  of  the  public.  It  was  therefore 
reasonable  that  the  expenses  should  be  so  apportioned,  and  in 
this  there  was  no  violation  of  the  state  constitution  providing 
for  uniformity  in  taxation  or  of  the  guarantees  of  the  federal 
constitution  for  due  process  of  law^  and  the  equal  protection  of 
the  law. 

§  108  (92).  State  regulation  not  dependent  upon  state  in- 
corporation.— This  power  of  regulation  under  state  commis- 
sions, as  that  of  the  Interstate  Commerce  Commission  under  the 
Interstate  Commerce  Act,  is  dependent  upon  the  character  of 
the  traffic,  whether  intrastate  or  interstate,  and  not  upon  the 
state  or  federal  incorporation  of  the  carrier.  The  same  railroad 
is  subject  as  to  these  two  classes  of  traffic  to  the  state  and  federal 
authority  respectiveh^  Tlius  the  power  of  the  Interstate  Com- 
merce Commission  extends  to  railroads  oranized  under  state 
and  federal  authority  as  well  as  to  corporations  organized  under 
the  laws  of  Canada  and  operating  in  the  United  States.  In  the 
Xorthem  Securities  case  a  corporation  organized  under  state 
authority,  for  the  purpose  of  holding  the  stock  of  competing  in- 
terstate railroads,  vras  adjudged  an  unlawful  combination  under 
the  Anti-Trust  Act  of  Congress.^ 

On  the  other  hand,  a  railroad  incorporated  by  act  of  congress 
is  subject  to  the  control  of  the  state  in  all  matters  of  taxation 
rates  on  domestia  traffic  and  to  all  rea.sonable  police  regulations 
in  the  absence  of  anything  in  the  act  indicating  an  intention 
on  the  part  of  congress  to  remove  the  corporation  from  such 
state  control.  The  silence  of  congress  in  this  respect,  said  the 
supreme  court  in  the  Texas  rate  case,  is  satisfactory  assurance 
that  so  far  as  the  corporation  slionld  transact  business  wholly 
wnthin  the  state  congress  intended  that  it  should  be  subjected  to 
the  ordinary  control  exercised  by  the  state  over  such  business. - 

1  Supra,  §  85.  Company,  supra;  Smythe  v.  Ames, 

•^Reagin     v.     :\Iercantile     Trust       109  V.  S.  466,  42  L.  Ed.  819  (1898). 


](4  FEDERAL  CONTROL  OF  STATE  RAILROAD  REGULATION.        [§    109 

The  sul)jeeTion  of  the  corporation  to  the  law  of  the  state  there- 
fore is  not  based  on  the  acceptance  by  the  railroad  company  of 
state  regulation,  but  results  from  the  failure  of  congress  to  ex- 
press any  intention  in  the  act  of  incorporation  that  it  should  be 
exempt  from  state  control. 

This  state  power  of  regulation  of  domestic  traffic  must  be  dis- 
tinguished from  the  concurrent  poM'er  exercised  by  the  state  in 
the  absence  of  legislation  by  congress  in  that  class  of  cases  (see 
supra,  Chapter  II)  where  the  authority  of  the  state  is  limited 
not  by  the  existence,  but  by  the  exercise  of  the  power  of  congress. 
In  the  class  of  cases  now  under  consideration  the  power  of  the 
state  is  independent  of  congressional  action. 

§  109  (93).  State  cannot  regulate  any  part  of  interstate 
rates. — It  was  held  in  the  leading  case  of  the  Wabash  Railway 
Company  ^  that  a  state  commission  had  no  regulating  power  over 
a  through  interstate  rate,  that  is,  over  even  that  part  of  it  which 
was  within  the  state.  The  limitations  of  the  state  authority  were 
further  illustrated  in  the  two  Kentucky  cases  decided  in  1901. 
In  the  first  of  these,^  the  court  affirmed  the  Kentucky  court  in 
sustaining  a  convict  ion  of  the  railroad  company  for  violation  of 
the  long  and  short  haul  clause  of  the  Kentucky  statute  in  a  rate 
on  an  intrastate  shipment.  The  court  below  had  excluded  evi- 
dence that  the  rates  were  reasonable  per  se,  and  held  that  it  was 
immaterial  that  the  less  charge  for  the  longer  haul  was  induced 
by  competition,  on  the  ground  that  the  state  had  authorized  the 
state  commission  to  give  relief  on  application.  In  the  other  ease 
at  the  same  term,^  the  supreme  court  held  the  Kentucky  statute 

As    the    court    based    its    opinion  state   as   one   of   its   attributes   of 
upon  the  construction  of  the  con-  sovereignty  extended  to  the  prop- 
gressional    act    of    incorporation,  erty    (though   not   to   the   federal 
the  question  of  the  power  of  con-  franchises)     of     the     Union     Pae. 
gress    to    limit    and    control,    the  Railroad    incorporated    under    act 
police  power  of  the  state  over  the  of  congress, 
property  of  federally  incorporated  i  Supra,  §  37. 
interstate  carriers,  located  within  2  L.  &  N.  R.  Co.  v.  Kentucky,  183 
the  state,  was  not  discussed.    The  U.   S.    (1902),   46   L.   Ed.   298,   re- 
Reagan   opinion  cited   the  Pacific  versing  103  Fed.  Rep.  216. 
Railroad  tax  case,  Railroad  Co.  v.  s  L.  &  N.  R.  Co.  v.  Eubank,  184 
Pemiston,    18    Wallace,    5    (1873),  U.    S.    27    (1902),    46    L.    Ed.    416, 
21    L.    Ed.    787,    wherein    it    was  (Justices   Brewer    and    Gray    di» 
held  that  the  taxing  power  of  the  senting). 


f 

§    110]       FEDERAL  CONTROL  OF  STATE  RAILROAD  REGULATION'.  175 

unconstitutional  as  construed  by  the  state  court  in  its  application 
to  a  long  and  slioit  liaul,  where  the  short  haul  was  wholly  within 
the  state  and  the  long  haul  was  partly  within  and  partly  without 
the  state.  The  court  said  that  the  direct  effect  of  the  statute  so 
construed  was  to  regulate  the  interstate  rate,  for  it  was  impos- 
sible for  the  carrier  to  do  any  interstate  business  at  the  local  rate, 
and  so  it  must  give  up  its  interstate  business,  or  else  reduce  the 
local  rate  in  proportion.  The  result  therefore  was  a  direct  inter- 
ference with  commerce  between  the  states,  carried  on  though 
it  may  be  by  a  single  company. 

The  fact  which  vitiated  the  provision,  the  court  said,  w^as  that 
it  compelled  the  carrier  to  regulate,  adjust  or  fix  his  interstate 
rates  within  the  state,  thus  enabling  tlie  state  to  directly  affect, 
and  in  that  way  to  regulate  to  some  extent,  the  interstate  com- 
merce of  the  carrier,  which  power  of  regulation  the  constitution 
of  the  United  States  gives  to  the  federal  congress. 

§  110.  Competitive  effect  of  intrastate  rates  upon  interstate 
rates. — It  is  the  effect  and  not  the  terms  or  declared  purpose  of 
state  regulation  of  intrastate  rates,  that  determines  whether  or 
not  such  state  imposed  rates  so  substantially  burden  interstate 
commerce  as  to  violate  the  commerce  clause  of  the  constitution. 
While  the  reduction  of  slate  rates  of  carriers,  doing  both  an  inter- 
state and  an  intrastate  business  with  the  same  tracks  and  equip- 
ment does  not  as  a  matter  of  law  interfere  with  interstate  rates,^ 
it  has  been  held  in  the  circuit  court  in  :\Iinnesota  that  it  may  so 
interfere  as  a  matter  of  fact  under  certain  conditions  of  state  and 
interstate  business.  In  the  Minnesota  rate  case  ^  the  reduction  of 

1  Brewer,  J.,  said,  in  the  Ne  effect  McPherson,  J.,  in  Missouri 
braska  rate  case,  in  circuit  court,  rate  case,  168  Fed.  Rep.  1.  c.  343 
64  Fed.  Rep.  172  (1894):  "The  (1909),  pending  on  appeal  in  su- 
statute  of  the  state  does  not  work  preme  court  (1911).  Woodside  v. 
a  change  in  interstate  rates  any  Tonopah  R.  R.  Co.,  1S4  Fed.  Rep. 
more  than  an  act  of  congress,  pre-  358  (1911)  Nevada. 
scribing  interstate  rates,  would  2  Sanborn,  J.  in  Shepard  v. 
work  a  change  in  local  rates.  Northern  Pacific  R.  Co.,  184  Fed. 
Railroads  cannot  plead  their  own  Rep.  765  (1911).  The  question  of 
convenience,  or  the  effect  of  com-  the  effect  of  intrastate  rate  re- 
petition between  themselves  and  duction  upon  interstate  rates 
other  companies  in  restraint  of  through  necessary  effect  of  com- 
the  otherwise  undeniable  power  petitive  influence,  has  not  been 
of  the  state."   See  also  to  the  same  directly   passed   upon   by   the   su- 


1  /(i  FEDERAL  CONTROL  OF  STATE  RAILROAD  REGULATION.       [§    110 

the  state  iinposod  local  rates  was  found  to  compel  a  reduction  of 
interstate  rates  to  cities  in  adjoining  states,  located  on  the  state 
boundaries,  and  thus  was  held  directly  to  burden  interstate  traf- 
fic. The  state  rates  were  therefore  condemned,  irrespective  of 
the  further  finding  that  they  were  confiscatory  and  violative  of 
the  fourteenth  amendment. 

On  the  other  hand  a  different  view  was  taken  in  the  circuit 
court  of  Kentucky  ^  where  there  were  similar  conditions  of 
contiguous  cities  in  bordering  states,  and  the  court  held  that  the 
fact  that  a  railroad  company  in  making  out  its  schedule  of  rates 
filed  with  the  Interstate  Commerce  Commission  had  taken  the 
sum  of  its  local  rates  in  each  state  did  not  remove  such  local 
rates  from  the  jurisdiction  of  the  state  for  the  purpose  of  regu- 
lation, and  that  the  fact  that  a  reduction  of  local  rates  by  the 
state  may  incidentally  place  the  company  under  the  business 
necessity  of  reducing  its  interstate  rates  affect  the  legality  of 
such  reduction;  the  court  said  that  the  logic  of  the  company's 
contention  would  release  its  local  rates  from  governmental  regu- 
lation ;  as  the  United  States  could  not  fix  the  local  rates,  because 


preme  court;  but  it  was  said  in 
earlier  proceeding  in  the  Minne- 
sota case,  ex  parte  Young,  209  U. 
S.  1.  c.  145,  that  "the  question  was 
not  at  any  rate  frivolous." 

See  also  Eubank  case  supra. 

In  the  Arkansas  rate  cases,  187 
Fed.  Rep.  p.  290  (May,  1911),  the 
court,  Trieber,  J.,  held  that  in  that 
case  the  facts  which  controlled 
the  decision  in  the  Minnesota  case 
did  not  exist,  and,  therefore,  it 
was  ruled  that  the  incidental 
effect  of  the  state  rates  upon  in- 
terstate rates  was  not  sufficient  to 
warrant  a  finding  against  the 
rates  on  that  ground. 

In  Oregon  R.  &  Nav.  Co.  v. 
Campbell,  D.  of  Oregon,  173  Fed. 
Rep.  957  (1909),  in  sustaining  a 
demurrer  to  a  bill  enjoining  the 
state  board  of  railroad  commis- 
sioners  for   putting   in   operation 


the  state  schedule  of  rates  and 
denying  the  temporary  injunction, 
the  court  said  that  the  fact  that 
such  an  order  fixing  rates  and 
limited  by  its  terms  to  intrastate 
shipments  incidentally  induce  a 
change  in  interstate  rates  did  not 
render  it  nor  the  statute  uncon- 
stitutional as  a  regulation  of  in- 
terstate commerce.  Same  court 
in  So.  Pac.  Co.,  et  al,  v.  Campbell, 
189  Fed.  696   (1911). 

1  L.  &  N.  R.  R.  Co.  V.  Siler,  186 
Fed.  176  (1911),  C.  C.  E.  D.  of 
Ky.,  per  curiam.  Opinion  of 
three  judges  sitting  (under  act 
of  .June  18,  1910)  {infra,  §  119) 
on  an  application  for  temporary 
injunction.  This  case  and  the 
Minnesota  and  the  Arkansas  cases 
supra,  have  been  appealed  to  and 
are  now  (Oct.  1911),  pending  in 
the  supreme  court. 


§    lllj       FEDKKAI,  COXIKdl,  oi-'  STATE  RAILROAD  REGULATION.  177 

they  are  local  and  the  state  could  not,  because  it  would  thereby 
cast  a  burden  on  interstate  eommeree. 

It  is  difficult  to  see  how  any  reasonable,  i.  e.  non-confiscatory 
regulation  of  intrastate  rates  can  be  held,  on  account  of  business 
or  competitive  reasons,  whatever  the  practical  embarrassment  to 
the  railroad,  a  direct  burden  upon  interstate  commerce,  and  there- 
fore unlawful,  consistently  with  the  limitation  of  the  federal  con- 
stitutional power  of  regulation,  the  express  declarations  of  the 
supreme  court  in  repeated  cases,  or  with  the  express  reservation 
of  section  1  of  the  Interstate  Commerce  Act,  that  the  provisions 
of  the  act  shall  not  apply  to  the  transportation  of  persons  or 
property  wliolly  \\ithin  a  state. 

§  111  (94).  The  fourteenth  amendment.— Prior  to  the  adop- 
tion of  the  fourteenth  amendment  in  18G8  there  was  no  appeal 
to  the  federal  courts  against  any  violation  by  state  power  of  due 
process  of  law  or  of  the  equal  protection  of  the  laws,  which  did 
not  involve  an  interference  with  national  authority  or  a  viola- 
tion of  some  provision  of  the  federal  constitution.  The  federal 
courts  administered  the  state  laws  and  followed,  as  they  still  do, 
the  decision  given  by  the  state  courts  as  to  the  construction  of 
the  state  statutes. 

The  fourteenth  amendment  provided  in  its  first  clause,  that  no 
state  should  deprive  any  person  of  life,  liberty  or  property 
without  due  process  of  law,  nor  deny  to  any  person  within  its 
jurisdiction  the  equal  protection  of  the  laws.  Corporations  are 
persons  under  this  amendment  and  are  therefore  entitled  to  due 
process  of  law  and  to  the  equal  protection  of  the  laws,^  and  a 
state  has  no  more  j)ower  to  deny  due  proces.s  of  law  or  the  equal 
protection  of  the  laws  to  a  corporation  than  it  has  to  individual 
citizens.^ 

This  far-reaf'hing  change  in  our  judicial  system,  whereunder 
the  fundamental  rights  of  property  are  protected  by  the  federal 
power  against  state  inva.sion,  was  adopted  shortly  before  the 
judicial  declaration  of  the  freedom  of  interstate  commerce 
against  state  interference  opened  the  way  for  the  direct  exercise 
of  the  federal  regulating  power. 

1  Santa  Clara  County  v.  South-  2  Railroad   Co.   v.   Ellis,   165   U. 

ern   Pacific  R,  Co.,  118  U.   S.  394       S.  1.  c.  154   (1897),  41  L.  Ed.  667. 
(1S86),  30  L.  Ed.  118. 
12 


178 

§  112  (95) .  Federal  review  of  state  regulation  of  railroads. — 

The  comprehensive  power  of  the  state  in  the  regulation  of  the 
intrastate  traffic  of  carriers,  whether  exerei.-ed  directly  under 
legislative  act  of  the  state  or  through  a  commission  of  the  state, 
is  subject  to  the  jurisdiction  of  the  courts  of  the  United  States 
luider  the  provisions  of  the  fourteenth  amendment  guarantee- 
ing due  process  of  law  and  the  equal  protection  of  the  laws  to 
all  persons  against  any  invasion  by  state  authority.^ 

The  junsdictiou  of  the  courts  of  the  United  States  in  such 
cases  does  not  depend  upon  the  unconstitutionality  of  the  state 
statute,  as  a  valid  law  may  be  wrongfully  administered  by  the 
officers  of  the  state.  If  the  statute  of  the  state,  as  construed  by 
the  highest  court  of  the  state  having  jurisdiction — and  this  con- 
struction by  the  state  courts  is  conclusive — denies  due  process 
of  law  or  equal  protection  of  the  laws,  the  federal  jurisdiction 
under  the  fourteenth  amendment  may  be  invoked.^ 

Wliile  the  construction  by  the  state  court  of  its  own  constitu- 
tion or  statute  is  accepted  as  conclusive  by  the  federal  court  as 
a  local  question,  in  the  absence  of  any  such  construction  by  the 
state  court  the  federal  court  must  construe  the  state  law  for 
itself.  Thus  where  the  validity  of  an  order  of  the  state  commis- 
sion was  assailed  not  only  on  distinctly  federal  grounds  under 
the  fourteenth  amendment,  but  also  under  the  further  ground 
that  the  commission  was  not  authorized  under  the  state  statute 
to  make  the  order  complained  of,  the  supreme  court  held  that 
the  circuit  court  obtained  jurisdiction  over  the  case  by  virtue  of 
the  federal  questions;  and  as  the  court  usually  decided  a  case 
without  reference  to  questions  arising  under  the  federal  consti- 
tution, where  it  could  be  so  decided,  and  in  the  absence  of  a 
definite  coixstruction  of  the  statute  by  the  state  court,  the  su- 
preme court  concluded  that  the  statute  did  not  grant  the  com- 

1  Chicago,  Milwaukee  &  St.  &64  (1898).  As  to  the  powers  con- 
Paul  R.  Co.  V.  Becker,  35  Fed.  ferred  upon  the  commission  by  the 
883  (1888);  Reagan  v.  Farmers  state,  the  supreme  court  will  fol- 
Loan  &  Trust  Co.,  supra;  So.  Ry.  low  the  ruling  of  the  state  court; 
Co.  V.  Greensboro  Ice  &  Coal  Co.,  if  the  question  has  not  been  passed 
134  Fed.  Rep.  82   (1904).  upon  by  the   state   court,   the  su- 

2  Reagan    v.    Farmers    Loan    &  prerae  court  will  decide  it  for  it- 
Trust     Co.,     supra;     Symthe     v.  self.     Siler  v.  L.  &  N.   R.  R.,   213 
Ames,  supra;  Barrow  S.  S.  Co.  v.  U.  S.  175,  53  L.  Ed.  753   (1909). 
V.  Kane,  170  U.  S.  Ill,  42  L.  Ed. 


§    113]       FEDKKAI,  (OXTliUL  OF  STATE  KAILROAD  KEGl'LATIOX.  179 

mission  the  power  to  make  a  general  schedule  of  rates  and  af- 
firmed the  deereo  ngMiiist  the  enforcement  of  the  commission's 
order  on  that  ground.^ 

A  state  statute  providing  for  the  establishment  of  railroad 
rates,  without  giving  the  corporation  an  opportunity  to  be  heard, 
which  fixes  penalties  for  disobedience  of  its  piovisions  by  fine  so 
enormous  and  imprisonment  so  severe  as  to  intimidate  the  cor- 
porations and  their  officers  from  resorting  to  the  courts  to  test 
the  validity  of  the  rates,  is  nneonstitutional  as  depriving  the 
corporation  of  the  equal  protection  of  the  laws.^ 

§  113.  The  federal  jurisdiction  must  be  invoked  on  substan- 
tial grounds. — The  circuit  court  of  the  United  States  ^  has 
jurisdiction  irrespective  of  diverse  citizenship  in  a  case  when 
the  constitution  of  law  of  a  state  is  claimed  to  violate  the  consti- 
tution of  the  United  States,  but  the  claim  must  be  real  and  sub- 
stantial. The  state  may  act  through  cliiferent  agencies,  through 
its  legislative,  executive  or  judicial  authority,  and  a  municipal 
corporation  may  be  such  an  agency,  when  it  acts  as  a  political 
subdivision  of  the  state.  A  municipal  ordinance  passed  pursuant 
to  the  authority  of  the  state,  abridging  the  privileges  or  immuni- 
ties of  the  citizen  or  depriving  a  person  of  a  corporation  of  prop- 
erty without  due  process  of  law,  would  be  an  act  of  the  state  pro- 
hibited by  the  constitution.  When  the  federal  jurisdiction  is 
tliorofore  invoked  on  the  ground  that  the  suit  arises  under  the 
constitution  and  laws  of  the  United  States,  it  must  appear  that 
the  suit  really  and  substantially  involves  such  a  controversy,  A 
mere  claim  in  words  is  not  enough,*  Thus  if  it  appears  that  the 
real  controversy  between  the  parties  is  whether  a  municipal  or- 
dinance was  enacted  in  conformity  with  the  state  constitution,  the 
federal  jurisdiction  cannot  be  sustained.^  Under  this  principle 
the  circuit  court  of  appeals  of  the  ninth  circuit  °  dismissed  a  bill 

1  Siler  V.  L.  &  N.  R.  Co.,  supra.      ^itemphis    v.    Cumberland    Tel,    & 

2  Ex  parte  Young,  supra.  Tel,  Co.,  218  U,  S.  624,  54  L.  Ed. 
8  This    original    jurisdiction    of      1185  (1910). 

the  circuit  court  is  vested  in  the  6  Hamilton    Gas    Light    Co.    v, 

district  court  of  the  United  States  Hamilton  City,  146  U.  S.  258,  36  L, 

under    the    revised    judiciary    act  Ed.  963   (1S92);   Barney  v.  City  of 

taking  effect  Jan.  1,  1912.  New  York,  193  U.  S.  430,  48  L.  Ed. 

4 Western     Union     Tel.     Co.     v.  737   fl904). 

Ann   Arbor   R.   R.  Co.,   178  U.   S.  e  Seattle   Electric  v,   Seattle   R. 

239,  44  L.  Ed.  1032  (1900);  City  of  &  S.  Co.,  185  Fed.  365  (1911). 


ISO         FEDERAL  CONTROL  OF  STATE  RAILROAD  REGULATION.       [§    11-1 

of  complaint  which  alleged  that  a  certain  municipal  ordinance 
would  take  property  and  privilege  without  due  process  of  law, 
and  in  contravention  of  the  laws  of  the  United  States,  and  that 
the  alleged  ordinance  is  without  authority  of  law,  null  and  void, 
and  of  no  force  or  effect,  as  it  appeared  that  under  the  provision 
of  the  state  constitution  the  ordinance  would  be  as  invalid  as 
under  the  federal  constitution,  and  the  court  would  presume  that 
the  state  court  would  not  deny  to  any  of  its  citizens  the  equal  pro- 
tection of  the  laws.  The  court  said  further  that  if  they  were 
mistaken  the  complainant  would  have  his  remedy  from  the  ap- 
peal of  the  highest  state  court  to  the  supreme  court  of  the  United 
States. 

§  114.  Jurisdiction  of  the  federal  courts  not  limited  by  state 
legislation. — This  power  of  the  federal  courts  cannot  be  limited 
by  state  legislation.  One  who  is  entitled  to  sue  in  the  federal 
circuit  court  may  invoke  its  jurisdiction  in  equity  whenever  the 
established  principles  and  rules  of  equity  permit  such  a  suit  in 
that  court ;  and  he  cannot  be  deprived  of  that  right  by  reason  of 
his  being  allowed  to  sue  at  law  in  a  state  court  on  the  same  cause 
of  action.  Thus  a  state  statute,  authorizing  any  railroad  com- 
pany in  a  proper  action  to  show  in  an  action  brought  in  the  su- 
preme court  of  the  state  that  the  rates  prescribed  by  a  statute 
were  unreasonable  and  unjust  and  to  obtain  relief  therefrom,  did 
not  deprive  the  railroad  company  of  its  right  to  invoke  the  equity 
jurisdiction  of  the  federal  court.^ 

This  right  to  resort  to  the  federal  courts  however  irrespective 
of  any  remedy  in  a  state  court  is  to  be  distinguished  from  a  case 
where  the  proceedings  in  the  state  court  are  not  judicial,  but  are 
legislative  or  administrative  in  character.  This  was  illustrated 
in  the  Virginia  rate  case,  where  the  constitution  of  the  state 
provided  that  the  state  corporation  commission,  which  was  styled 
a  court,  should  fix  rates  subject  to  the  right  of  appeal  by  the 
railroads  to  the  supreme  appellate  court  of  the  state,  who  should 
determine  the  case  upon  the  facts  certified  by  the  commission,  and 
if  it  reversed  the  order  of  the  commission,  should  substitute 
such  order  as,  in  its  opinion,  the  commission  should  have  made. 
The  court  said  that  these  were  proceedings  essentially  legislative 
in  character.    As  a  matter  of  comity  therefore  a  federal  circuit 

1  Smythe  v.  Ames,  supra. 


§    115]       FEDERAL  CONTROL  OF  STATE  RAILROAD  REGULATION.  181 

court  should  not  entertain  a  suit  to  enjoin  the  enforcement  of 
rates  fixed  by  the  state  corporation  commission  in  advance  of  tin- 
appeal  to  the  highest  state  court,  so  that  the  final  voice  of  th(i 
state  should  have  been  declared  before  the  federal  authority  was 
invoked.^ 

An  act  of  a  state  providing  that  the  rates  charged,  established 
by  a  commission,  shall  be  final  and  conclusive  as  to  what  are  rea- 
sonable charges,  and  which,  as  construed  by  the  supreme  court 
of  the  state,  precludes  any  judicial  inquiry  as  to  the  reasonable- 
ness of  the  rates,  deprives  the  company  of  its  property  without 
due  process  of  law  and  of  the  equal  protection  of  the  laws.^  The 
carrier  is  thus  secured  imder  the  fourteenth  amendment,  not 
only  in  a  judicial  hearing  upon  the  question  of  his  intrastate 
rates,  but  also  in  his  right  to  charge  reasonable  rates;  and  the 
reasonableness  or  unreasonableness  of  the  rates  established  under 
state  authority  will  be  reviewed  by  the  federal  courts  in  determ- 
ining whether  or  not  the  company  is  deprived  of  its  property 
without  due  process  of  law.' 

Due  process  of  law  does  not  require  that  a  railroad  should 
have  notice  of  specific  time  of  fixing  rates  if  dates  of  meeting 
of  the  commission  are  fixed  by  law,*  nor  is  it  essential  that  a 
judicial  review  of  the  order  of  the  commission  should  be  pro- 
vided in  the  statute.^ 

§  115.  Injunctions  against  state  officials  not  violative  of  the 
eleventh  amendment. — A  suit  against  a  state  commission  or  a 
state  attorney  general  or  any  other  state  officials,  acting  under 
the  authority  of  the  state  in  fixing  rates  or  enforcing  regula- 
tions   of   a   state,    to    enjoin    them    from    proceeding    in    such 

1  Prentiss  v.  Atlantic  Coast  Co.  supra;  Chicago,  Milwaukee  & 
Line,  211  U.  S.  210,  53  L.  Ed.  St.  Paul  R.  Co.  v.  Tompkins,  176 
150  (190S).  The  court  held  that  U.  S.  167,  44  L.  Ed.  417  (1900); 
the  suits  were  prematurely  Covington  &  Lexington  Turnpike 
brought;  Justice  Brewer  dissent-  Co.  v.  Sandford,  164  U.  S.  578 
ing.  and  Justices  Fuller  and  Har-  (1S96),  41  L.  Ed.  560. 

Ian  holding  that  the  suits  should  <  San    Diego    Land    Co.    v.    Na- 

be  dismissed.  tional   City,   174  U.   S.   739,   43   L. 

2  Chicago,  etc.  R.  Co.  v.  Minne-  Ed.  1154  (1S99) — a  water  rate 
sota,  134  U.  S.  41S   (1890),  33  L.  case. 

Ed.  970.  6  L.  &  N.  R.  R.  Co.  v.  Siler,  1S6 

3  Smythe      v.      Ames,      supra;      Fed.  176,  supra. 
Reagan  v.  Farmers  Loan  &  Trust 


182         FEDERAL  CONTROL  OF  STATE  RAILROAD  REGULATION.       [§    IIG 

enforcement  on  ground  of  the  invalidity  of  sneli  regulation,  is 
not  a  suit  against  the  state  within  the  meaning  of  the  eleventh 
amendment.^  This  principle  was  enforced  by  the  supreme  court 
in  a  case  where  the  attorney  general  of  a  state  was  held  properly 
cited  with  contempt  of  a  circuit  court  of  the  United  States,  when 
he  had  proceeded  in  his  official  capacity  by  suit  in  a  state  court 
in  enforcing  a  state  statute  regulating  state  rates,  after  he  had 
been  enjoined  by  the  circuit  court  from  taking  steps  towards  the 
enforcement  of  such  statute,  which  was  claimed  to  be  unconsti- 
tutional. The  court  said:  ''Individuals  who,  as  officers  of  the 
state,  are  clothed  with  some  duty  in  regard  to  the  enforcement 
of  the  laws  of  the  state,  and  who  threaten  and  are  about  to  com- 
mence proceedings,  either  of  a  constitutional  or  a  criminal  na- 
ture to  enforce  against  parties  affected  an  unconstitutional  act 
violating  the  federal  constitution,  may  be  enjoined  by  a  federal 
court  of  equity  from  such  action. ' '  While  the  power  of  the  fed- 
eral court  does  not  extend  to  enjoining  a  state  court  from  acting 
in  a  case  brought  before  it,  the  action  of  an  attorney  general  of 
a  state  in  attempting  to  enforce  an  enactment  void  under  the 
constitution  of  the  United  States  was  illegal,  as  in  conflict  with 
the  federal  constitution ;  and  the  prohibition  against  his  proceed- 
ing did  not  affect  the  state  in  its  governmental  capacity. 

§  116.  The  regulating  orders  of  state  commissions  are  legis- 
lative, not  judicial. — It  is  immaterial  that  the  state  commission 
or  other  authority  charged  with  the  duty  of  making  rates  is 
styled  a  court,  and  is  made  a  court  of  record  by  the  express 
terms  of  the  constitution  of  the  state.  A  suit  to  enjoin  the  mem- 
bers of  such  a  commission  is  not  a  suit  to  enjoin  a  state  court 
wdthin  the  meaning  of  Section  720,  E.  S.  U.  S.,  nor  does  the 
decision  of  such  a  commission  make  the  legality  of  the  rates  fixed 
or  affirmed  by  them  res  adjudicata.  The  establishment  of  a  rate 
is  the  making  of  a  rule  for  the  future,  and  therefore  is  an  act 

1  Ex    parte    Young,    209    U.    S.  overrule  or  limit  the  doctrine  of 

123,   52   L.   Ed.    714    (1908),   Har-  Smyth  v.  Ames,  supra;  Central  R. 

Ian,   .J.,   dissenting.     The   opinion  R.   of   Georgia  v.   McLendon,   157 

of  this  case  contains  an  exhaust-  Fed.  Rep.  961   (1907);   McNeill  v. 

ive  review  of  the  authorities,  and  Southern   Railway  Co.,   202   U.    S. 

distinguished  the  case  of  Fitts  v.  543  (1906),  50  L.  Ed.  1142,  modify- 

McGhee,  172  U.  S.  516,  43  L.  Ed.  ing  and  affirming  134  Fed.  Rep.  82. 
535   (1899),  which  was  claimed  to 


§    ]17]       FEDERAL  CONTROL  OF  STATE  RAILROAD  REGULATION.  183 

legislative,  not  jii'licial,  in  kind.  In  the  language  of  the  supreme 
court,  a  judicial  inquiry  investigates,  declares,  and  enforces  lia- 
bilities as  they  stand  on  present  or  past  facts  and  under  laws  sup- 
posed already  to  exist.  Legislation,  on  the  other  hand,  looks  to 
the  future,  and  changes  existing  conditions  by  making  a  new- 
rule  to  be  applied  thereafter  to  all  or  some  part  of  those  subject 
to  its  power.  It  follo-ws,  that  when  a  state  supreme  court  is 
vested  with  the  rate  making  power  on  appeal  from  such  a  com- 
mission, its  action  is  essentially  administrative  or  legislative, 
and  not  judicial,  and,  therefore,  is  not  constituted  an  adjudica- 
tion in  the  judicial  sense  of  the  word ;  *  and  the  enforcement  of 
a  rate  or  regulation  thus  made  and  affirmed,  may  be  enjoined  by 
the  federal  court,  if  found  to  be  violative  of  the  constitutional 
rights  of  the  railroad. 

It  is  immaterial  that  investigations  or  hearings  are  made  by 
the  commission  or  court,  on  appeal  therefrom  if  such  appeal 
is  provided,  as  such  matters  are  but  preliminary  and  inducive 
to  the  exercise  of  the  legislative  power  in  the  adoption  of  the 
new  rule  of  action  to  be  formulated  and  applied.^ 

§  117  (96).  Procedure  in  federal  review  of  state  legislation. 

The  question  of  the  validity  of  state  rates  or  other  regulation 
may  be  raised  by  carrier  in  defense  to  an  action  at  law  for  the 
penalties  imposed  by  the  law,^  but  preferably  by  bill  in  equity 
directly  challenging  the  validity  of  the  rates  or  regulation.  It 
was  said  by  the  supreme  court  in  the  Minnesota  rate  ease  *  that 
the  remedy  at  law  in  such  a  case  was  plainly  indequate,  particu- 
larly when  it  involved  a  great  risk  of  fines  and  imprisonment  if 
it  should  finally  be  determined  that  the  act  was  valid  and  that  a 
railroad  company  should  not  be  required  to  take  this  risk,  and 
that  all  these  objections  will  be  obviated  by  a  suit  in  equity, 
making  all  who  are  directly  interested  parties  to  the  suit. 

The  circuit  courts  of  the  United  States  have  jurisdiction  of 
an  action  by  non-resident  stockholders  of  such  companies  against 
the  companies   and  the  state   official   contesting  said  imposed 

1  See  the  Virginia  Rate  Case,  s  See  St.  Louis  &  S.  F.  R.  R. 
Prentiss  v.  Atlantic  Coast  Line,  Co.  v.  Gill,  156  U.  S.  6  (1895), 
supra.                                                           30  L.  Ed.  .^67. 

2  L.    &   N.    R.    R.    Co.   V.  Siler,  *  Ex  parte  Young,  supra, 
supra. 


184         FEDER.VL  CONTROL  OF  STATE  RAILROAD  REGULATION.       [§    117 

rates.^  As  the  federal  court  has  jurisdiction  irrespective 
of  citizenship  where  the  basis  of  complaint  is  that  the  state 
rates  or  regulation  are  violative  of  due  process  of  law  under  the 
fourteenth  amendment,  the  court  would  have  jurisdiction  irre- 
spective of  citizenship,  and  the  bringing  of  such  an  action  in  the 
name  of  the  non-resident  stockholders  is  therefore  unneces- 
sary.2 

The  federal  jurisdiction  may  also  be  invoked  through  a  writ 
of  error  from  the  supreme  court  to  the  highest  court  of  the  state 
where  the  federal  right  invoked  is  decided  adversely  to  the  claim- 
ant by  the  state  court,  or  the  jurisdiction  may  be  exercised  in  a 
direct  proceeding  in  the  assertion  of  the  federal  right  in  the  U. 
S.  circuit  court,  and  this  latter  procedure  is  ordinarily  the  only 
adequate  remedy.^ 

As  to  the  procedure  in  an  equity  eaiLse.  it  was  remarked  by 
the  supreme  court  *  that  it  was  a  better  practice  in  such  cases 
where  the  reasonableness  of  rates  was  involved,  to  refer  the  cause 
to  some  competent  master  to  make  all  needed  computations  and 
to  find  fully  the  facts,  and  that  in  view  of  the  difficulties  and 
importance  of  such  a  case  it  was  imperative  that  the  most  compe- 
tent and  reliable  master,  general  or  special,  should  be  selected ;  for 
it  is  not  a  light  matter,  said  the  court,  to  interfere  with  the  legis- 
lation of  the  state  in  respect  to  prescribing  rates,  nor  a  light 
matter  to  permit  such  state  regulation  to  wreck  large  property 
interests.^ 

The  supreme  court  has  declared  a  modification  of  the  ordinary 
procedure  in  equity  causes  in  a  case  involving  the  alleged  confis- 

1  Reagan  v.  Farmers  Loan  &  *  See  South  Dakota  Rate  Case, 
Trust  Co.,  supra.  176   U.    S.    167    (1900),  44    L.    Ed. 

2  As  to  the  compliance  with  417,  reversing  90  Fed.  Rep.  363. 
equity  rule  94  in  a  stockholder's  5  As  to  sufficiency  of  allega- 
suit,  see  Poor  v.  Iowa  Central  tions  in  the  bill  of  complaint  to 
R.  R.  Co.,  155  Fed.  Rep.  226  restrain  enforcement  of  an  order 
(1907),  where  the  court  held  that  of  the  commission  reducing  rates, 
such  a  suit  could  not  be  main-  see  Wilmington  &  W.  R.  Co.  v. 
tained  where  the  only  effort  of  Board  of  R.  R.  Commissions,  90 
the  plaintiff  to  secure  his  action  ped  Rep.  33  (1898).  See  also 
from  the  company  was  a  demand  Houston  &  T.  C.  R.  R.  v.  Story,  149 
on  the  stockholders,  and  that  the  Fed.  Rep.  p.  499  (1906);  Oregon 
manner  or  reason  for  the  refusal  R.  R.  &  Navigation  Co.  v.  Camp- 
of  the  directors  was  not  disclosed.  bell,  173  Fed.  957,  circuit  court  of 

3  See  Ex  parte  Young,  ,s!/pra.  Oregon   (1909),  also  177  Fed.  318. 


§    118]       FEDERAL  CONTROL  OP  STATE  EAILROAD  REGULATION.  ]>>J 

catory  rates  fixed  l)y  a  municipal  ordinance  of  a  local  public  ser- 
vice company,  in  that  the  general  rule  respecting  the  conclusive- 
ness of  a  master's  finding  of  fact  when  confirmed  by  the  court 
Avould  not  be  applied  by  the  supreme  court  on  appeal,  that  is, 
tlie  eoui't  would  not  fetter  its  discretion  or  judgment  by  any  arti- 
ficial rules  as  to  the  weight  of  the  master's  findings,  however  use- 
ful and  well  settled  these  rules  might  be  in  ordinary  litigation.* 

Where  tlie  order  of  the  commission,  sought  to  be  enjoined, 
commands  the  repayment  by  the  railroad  of  excessive  past  rates 
to  certain  shippers,  such  shippers  are  necessary  parties  to  a  bill 
seeking  to  set  aside  the  award.^ 

The  exceptional  character  of  this  litigation  is  also  peculiar  in 
the  provision  of  the  decree  which  the  supreme  court  said  in  the 
Nebraska  case  was  wisel}^  inserted,^  that  the  members  of  the 
state  board  had  the  right  to  show  at  any  time  that  the  conditions 
of  business  were  so  changed,  that  the  rates  enjoined  would  yield 
the  railroads  a  just  compensation ;  and  in  such  case  it  would  be 
the  duty  of  the  court  to  discharge  the  injunction.  This  precedent 
thus  approved  by  the  supreme  court,  has  been  usually  followed 
in  decrees  in  this  class  of  litigation.* 

§  118.  Temporary  injunctions  in  federal  control  of  state  legis- 
lation.— ^Where  a  federal  court  has  jurisdiction  to  permanently 
enjoin  the  enforcement  of  railroad  rates  or  other  regulations,  it 
also  has  power,  while  the  inquirA-  is  pending,  to  grant  a  tempor- 
ary injunction  to  the  same  effect."  Such  temporary  relief  is 
granted  upon  the  same  grounds  recognized  as  authorizing  such 
relief  in  other  cases,  that  is,  to  preserve  the  status  quo  and  pre- 
vent a  change  of  conditions  during  the  litigation  which  may  re- 
sult in  irremediable  injury  to  some  of  the  parties  before  their 
claims  can  be  investigated  and  adjudicated.' 

1  Knoxville   v.   Knoxville  Water  sion   of  the   Interstate   Commerce 

Co.,    212    U.    S.    1,    53    L.    Ed.    371  Act    limiting    the    orders    of    the 

(1909).  commission    for    periods    of    two 

2L.    &    N.    R.    R.    Co.    V.    Siler,  years. 

supra.  6  Ex  parte  Young,  supra. 

3  See  Smythe  v.  Ames,  supra.  e  City   of   Newton   v.   Lewis,   79 

*The  necessity  of  adjusting  Fed.  Rep.  715  (1897);  SteA-ens  v. 
orders  concerning  rates  to  the  M.  K.  &  T.  R.  R.,  106  Fed.  Rep.  771 
probability  of  changing  business  (1901),  C.  C.  A.  2nd  circuit;  Car- 
conditions,  is  shown  in  the  provi-  tersville   L.   &   N.   Co.   v.    Carters- 


1S6         FEDERAL  CONTROL  OF  STATE  RAILROAD  REGULATION.       [§    11^ 

This  principle  lias  been  applied  by  the  courts  in  determining- 
the  right  to  a  temporary  injunction  in  railroad  rate  cases.^  In 
what  is  known  as  the  Alabama  rate  ease,  the  circuit  court  of  ap- 
peals, fifth  circuit,  reversed  the  order  of  temporary  injunction 
granted  by  the  circuit  court  where  the  rates  had  not  gone  into 
effect.^  The  circuit  court  of  Minnesota  declined  to  issue  a  pre- 
liminary injunction  where  the  rates  had  been  accepted  and  put 
in  operation  by  the  railroad  companies,  but  allowed  a  temporary 
injunction  as  to  certain  rates  which  had  not  been  put  into  effect, 
for  the  reason  that  they  operated  so  as  to  preserve  the  status 
quo  as  to  whether  or  not  the  rates  were  confiscatory  until  the 
final  hearing.' 

Where  the  enforcement  of  rates  has  been  restrained  by  a  re- 
straining order  pending  the  hearing  of  application  for  temporary 
injunction,  the  court,  in  denying  the  injunction,  may  in  its  des- 
eretion  continue  the  restraining  order  upon  condition,  pending 
an  appeal.* 

§  119.  Temporary  injunction  under  act  of  1910. — ^TJnder  the 
act  establishing  the  circuit  court  of  appeals,  as  amended,  an  ap- 
peal lay  to  that  court  from  orders  granting  temporary  injunc- 
tions, whether  the  causes  were  appealable  on  final  hearing  to 
such  court  or  to  the  supreme  court.  Under  the  commerce  court 
act  of  1910,^  temporary  injunctions  against  the  enforcement  of 

ville,  114  Fed.  Rep.  699  (1901),  and  freight  rates  had  been  en- 
same  court;  Louisville  v.  Cum-  forced  for  two  years,  and,  on  the 
berland  Tel.  Co.,  Ill  Fed.  Rep.  663  affidavits,  were  held  to  be  confis- 
(1901),  C.  C.  A.  6th  circuit.  catory.    A.  T.  &  S.  F.  R.  R.  Co.  v. 

1  Central  of  Georgia  Ry.  Co.  v.  Love,  177  Fed.  493,  affirmed  by 
McLendon,  155  Fed.  Rep.  974  Circuit  Court  of  Appeals  (8th 
(1907),  and  157  Fed.  Rep.  961.  Cir.),  185  Fed.  321  (1911). 

2  170  Fed.  Rep.  225,  reversing  4  l.  &  N.  R.  R.  Co.  v.  Siler,  186 
161  Fed.  Rep.  925.  Fed.  Rep.  175,  supra. 

3  Perkins  v.  Northern  Pac,  155  s  See  Appendix.  On  hearing 
Fed.  Rep.  445  (1907).  See  also  St.  under  this  act  of  1910  before  Cir- 
L.  &  S.  F.  R.  R.  Co.  V.  Hadley  (a  cuit  Justice  and  two  District 
Missouri  rate  case),  155  Fed.  Rep.  judges,  where  application  for 
220,  where  the  temporary  injunc-  temporary  injunction  against 
tion  was  denied  because  the  rates  state  rates  of  Nevada  was  denied 
had  not  been  tested.  In  the  Okla-  on  ground  of  insufficiency  of 
homa  rate  cases  a  temporary  in-  proof.  See  Woodside  v.  Tonopola 
junction  was  granted  by  Hook,  X,  R.  R.,  184  Fed.  Rep.  358  (1911). 
on  the  ground  that  the  passenger, 


§    120]       FEDERAL  CONTROL  OF  STATE  RAILROAD  REGLLATlOX.  187 

state  authority  by  state  officials  cannot  be  granted  by  the  federal 
courts,  unless  the  application  shall  be  heard  and  determined  by 
three  judges,  one  oi"  wiioni  imist  be  a  justice  of  the  supreme  court 
or  a  circuit  judge,  and  at  least  five  days'  notice  of  the  hearing 
must  be  given  to  the  governor  or  attorney-general;  and  such 
orders  of  injunction  are  appealable  directly  to  the  supreme  court. 
Under  this  act,  an  acting  district  judge  cannot  sit  alone,  either 
in  granting  an  injunction  order,  or  in  vacating  one  which  has 
been  made,  but  he  must  call  to  his  assistance  two  other  judges, 
as  required  by  the  statute,  to  hear  an  application;  either  to  grant 
or  to  vacate  such  an  injunction.  ]\Iandamus  to  compel  the  judge 
to  comply  with  the  law  is  the  proper  remedy,  where  a  single 
judge  takes  any  action  on  sucli  an  injunction,  as  the  right  of 
appeal  is  not  otherwise  given  by  statute.^ 

§  120  (97).  Reasonableness  and  confiscation  in  regulation  of 
rates. — The  standard  of  reasonableness  in  rates  considered  by 
the  courts  when  the  carrier  complains  of  state  imposed  rates 
on  intrastate  traffic  as  confiscatory,  in  violation  of  the  fourteenth 
amendment,  is  not  the  same  as  that  involved  in  the  determination 
of  what  is  reasonable  between  a  carrier  and  his  patrons,  whether 
the  issue  is  raised  under  the  interstate  commerce  act  or  otherwise. 
It  is  not  what  the  carrier  can  exact  or  what  the  shipper  can  be 
forced  to  pay  under  the  common  law  rule  of  reasonableness,  but 
what  limit  the  state  can  lawfully  impose  upon  the  carrier  in 
making  rates  without  violating  the  federal  protection  against 
taking  of  property  without  due  process  of  law. 

The  burden  of  proof  necessarily  differs  in  the  different  classes 
of  cases.  When  the  federal  authority  is  invoked  against  state 
imposed  rates  the  presumption  is  that  the  state  rates,  whether 
made  by  the  legislature  or  a  commission,  are  presumed  to  be  rea- 
sonable, and  the  burden  is  therefore  upon  the  railroad  to  prove 
that  the  rates  are  unreasonable,  that  is  confiscatory,  in  that  they 
deprive  the  railroad  of  the  rightful  return  to  wdiich  it  is  entitled 

1  Ex   parte,   in   re   Metropolitan  tion  order,  and  directing  him   to 

Water  Co.   of  West  Virginia,   220  call    to   his   assistance    two    other 

U.    S.    539,    55    L.   Ed.   —    (1911),  judges,  as  provided  by  the  act,  for 

where    a    manadmus    was    issued,  hearing    and    determining   an    ap- 

directing  the  acting  district  judge  plication  for  an   interlocutory   in- 

of  the   district   of   Kansas  to   set  junction, 
aside  an  order  vacating  an  injunc- 


188  FEDERAL  CONTROL  OF  STATE  RAILROAD  REGULATION.       [§    120 

upon  its  property.  If  the  railroad  fails  to  prove  this  contention 
the  suit  must  fail.^  The  term  "reasonable"  in  this  class  of  ac- 
tions is  used  in  the  sense  of  being  non-confiscatory,  that  is, 
above  the  minimum  which  the  railroad  could  be  compelled  to  ac- 
cept; and  such  a  rate  may  be  well  within  the  maximum  rate 
which  a  railroad  could  exact  from  its  patrons  as  reasonable.^ 

On  this  issue  therefore  of  the  minimum  rate  which  the  carrier 
can  be  forced  to  charge  the  proof  is  necessarily  directed  to  show 
that  the  rates  will  not  permit  the  carrier  to  realize  the  adequate 
return  to  which  it  is  lawfully  entitled,  upon  its  property  de- 
voted to  the  public  use. 

On  the  other  hand  neither  the  statutes  nor  the  common  law 
nor  judicial  decisions  concerning  state  imposed  rates  furnish 
any  definite  standard  for  the  determination  of  what  is  reason- 
able as  between  a  carrier  and  its  patrons.  In  ordinary  business 
transactions  a  reasonable  charge  for  a  personal  service  is  the  re- 
sultant of  the  free  economic  forces  of  supply  and  demand.  It  is 
obvious  that  under  the  complicated  conditions  of  railway  trans- 
portation this  free  play  of  the  economic  forces  of  supply  and 
demand  does  not  ordinarily  exist.  When  competition  does  act 
in  determining  railway  rates,  it  is  only  at  certain  points,  as 
terminal  centers,  where  the  rate  may  be  made  unreasonable  from 
the  carrier's  point  of  view,  while  at  local  points  on  the  same  line 
it  may  not  exist  at  all.  The  standard  of  reasonableness  there- 
fore is  one  thing  for  the  railroad  manager  who  wishes  to  secure 
at  all  times  a  reasonable  profit  upon  the  cost  of  services,  and  a 

1  In   Northern   Pacific   R.  R.   v.  confiscatory  character  of  the  rate 

North  Dakota,  216  U.  S.  579,  54  L.  more  clearly. 

E.  624  (1910),  the  supreme  court,  2  "What   may    be    a    reasonablt 

in  affirming  the  judgment  of  the  rate  or  return  as  in  the  matter  of 

state  court  which  sustained  a  coal  legal  policy,  having  due  regard  to 

rate  which  was  alleged  to  be  con-  encourage  the  investment  of  capi- 

fiscatory,     said     that     while     the  tal  in  railroad  enterprises,  is  one 

argument  of  the  railroad  seemed  question;    but   when   the    inquiry 

to   have   considerable   probability,  becomes  a  judicial  problem  to  be 

the    evidence    left    the   matter   so  considered   as   involving   the   tak- 

much   in    doubt,    that   the   decree  ing   or  not  taking   the   railroads 

was  affirmed  without  prejudice  to  property,  it  is  essentially  a  differ- 

the  rights  of  the  company  to  rer  ent  question."     Opinion  of  circuit 

open   the   case,   if   after    adrjquate  court  in  L.  &  N.  R.  Co.  v.   Siler, 

trial,  it  thought  it  could  prove  the  supra. 


§    121]       FKDEKAL  CONTROL  OF  STATE  RAILROAD  REGULATION".  189 

very  different  thin^5  for  the  shipper  Avho  wishes  to  seeure  at  all 
times  a  reasonable  prf)fit  for  his  own  business  as  against  his  com- 
petitors in  other  communities.^ 

§  121  (98).  State  rates  determined  without  reference  to  in- 
terstate traffic. — Tlie  coni])U*xily  oi:"  our  sjrovcniincntal  system  is 
illustrated  in  the  regubition  of  the  intrastate  and  interstate  busi- 
ness of  our  railroads.  Though  the  railroad  may  extend  through 
several  stales,  it  is  an  entity  operated  as  an  entirety,  all  its  in- 
come coming  into  and  all  its  expenditures  going  out  of  a  common 
fund,  its  capitalization  includes  all  its  i)roperty  in  and  out 
of  the  state,  and  all  its  business,  state  or  interstate,  is  transacted 
by  the  same  employes  and  Avith  the  same  equipment.  All  this, 
says  the  supreme  court,  has  no  applieatidii  in  determining  the 
limits  of  the  state  power  of  regulation.-  The  reasonableness  of 
state  rates,  that  is.  whether  or  not  confiscatory,  must  therefore 
be  determined  by  the  revenue  from  and  the  cost  of  traffic  within 
the  state  without  reference  to  the  interstate  traffic  over  which 
the  state  has  no  control.  A  state  cannot  .iustify  unreasonably 
low  rates  on  the  ground  that  the  railroad  is  earning  large  profits 
in  its  interstate  business,  nor  can  the  railroad  justify  unreason- 
ably large  rates  to  domestic  business  in  order  to  make  up  losses 
on  its  interstate  business.  This  principle  precludes  the  state 
from  claiming  that  traffic  beginning  or  ending  in  the  state  should 
be  divided   upon   the   mileage   basis,   as   such  interstate   traffic 

1  The  supreme  court  said  in  ter  what  standard  is  adopted,  that 
the  Trans-Missouri  Freight  Assor  the  indiviual  shipper  would  be 
ciation  case,  supra.  "What  is  a  practically  remediless.  It  is  also 
proper  standard  by  which  to  judge  true  that  the  complexity  of  the 
the  fact  of  reasonable  rates?"  problem  requires  for  its  solution 
And  after  commenting  upon  the  the  largest  experience,  and  the 
dilTerent  factors  to  be  considered,  fullest  knowledge  of  the  details  of 
said:  "That  it  is  quite  apparent  the  cost  of  service,  and  all  the 
that  it  is  exceedingly  difficult  to  conditions  of  traffic."  The  ques- 
formulate  even  the  terms  of  the  tion  of  reasonableness  in  railroad 
rule  itself  which  should  govern  in  rates  and  the  different  factors  la- 
the matter  of  determining  what  solved  in  its  determination  is 
would  be  reasonable  rates  for  fully  discussed  in  the  opinions  of 
transportation,  and  that  there  was  the  Interstate  Commerce  Commis- 
such  an  infinite  variety  of  facts  sion,  see  infra,  §  246  et  scq. 
entering  into  the  question  of  2  Smyth  v,  Ames,  supm. 
what  is  a  reasonable  rate,  no  mat- 


190         FEDER.VL  CONTROL  OF  STATE  RAILROAD  REGULATION.       [§    122 

Tmder  the  decision  in  the  "Wabash  case/  is  subject  only  to  the 
regulation  of  congress.- 

The  judicial  investigation  of  the  validity  of  state  rates  there- 
fore requires  what  is  in  effect  a  statement  of  account  of  the 
state  business  of  the  railroad,  and  its  segregation  from  the  other 
business  of  the  railroad,  conducted  with  the  same  equipment. 
The  railroad  property  in  the  state  must  be  ascertained  and  ap- 
portioned to  the  state  and  interstate  business,  and  if  the  case  re- 
quires it,  separately  apportioned  to  the  freight  and  passenger 
business,  both  state  and  interstate.  It  was  said  by  the  supreme 
court  in  holding  that  in  such  a  case  the  cost  and  net  profits  of 
the  state  traffic  must  be  ascertained  *  that  few  eases  are  so  dif- 
ficult and  perplexing  as  those  which  involve  an  inquiry  whether 
the  rates  prescribed  by  the  state  legislature  for  the  carriage  of 
passengers  and  freight  are  unreasonable,  but  that  the  facts  could 
not  be  determined  with  mathematical  accuracy  afforded  no  ex- 
cuse for  a  failure  to  examine  and  solve  the  question  involved. 

§  122.  Th3  supreme  court  on  state  regulation. — The  regula- 
tion by  the  states  of  intrastate  rates  in  the  exercise  of  its  au- 
thority over  domestic  commerce  has  been  reviewed  by  the  su- 
preme court  in  this  jurisdiction  under  the  fourteenth  amend- 
ment in  cases  from  Texas,*.  Nebraska,^  South  Dakota,^  Ar- 
kansas,'^ Michigan,^  Minnesota,^  Florida,"  and  Virginia." 

The  principles  applied  in  determining  the  validity  of  railroad 
rate  regulation  have  also  been  discussed  in  connection  with  the 

iSee  §  37,  supra.  v.  Wellman,  143  U.  S.  339   (1892), 

2  See  Northern  Pacific  Railroad      36  L.  Ed.  176. 

Co.  V.   Keyes,   C.   C.   D.  of  North  »  Chicago,  etc.,  R.  Co.  v.  Minne- 

Dakota,  91  Fed.  47  (1898).  sota,  134  U.  S.  418,  33  L.  Ed.  970 

3  See  South  Dakota  Rate  Case,  (1890);  Minn.  &  St.  L.  R.  Co.  v. 
C  N.  &  St.  P.  R.  Co.  V.  Tompkins,  Minnesota,  186  U.  S.  257,  4G  L.  Ed. 
supra.  1151  (1902). 

4  Reagan  v.  Trust  Co.,  supra.  "  Atlantic  Coast  Line  R.  Co.  v. 

5  Smyth  V.  Ames,  supra.  Florida,  203  U.   S.  256,  51  L.  Ed. 

6  Chicago,  M.  &  St.  P.  R.  Co.  V.  174  (1906);  also  Seaboard  Air 
Thompkins.  supra.  Line  v.  Florida,  203  U.  S.  261,  51 

7  St.  L.   &  S.  F.  R.  Co.  V.  Gill,  L.  Ed.  176    (1906). 

supra;  Dow  v.  Bidelman,  125  U.  S.  "  Virginia    Rate    Case,    supra. 

680,  31  L.  Ed.  841   (1888).  §  114. 

8  Chicago   Grand   Trunk   R.   Co. 


§    123]       FEDERAL  CONTROL  OF  STATE  RAILROAD  REGULATION.  lOl 

rates  imposed  by  the  states  or  monicipalitios  under  state  au- 
thority upon  other  public  service  corporations.^ 

In  the  Texas  rate  case,  the  supreme  court  reversed  the  decision 
of  the  circuit  court  in  so  far  as  it  restrained  the  railroad  com- 
mission from  discharging  the  duties  imposed  by  the  legislative 
act  and  froin  proceeding  to  establish  reasonable  rates,  but  af- 
firmed the  decree  in  so  far  as  it  restrained  the  commission  from 
enforcing  the  rates  already  established,  as  it  was  found  upon 
the  admitted  facts  that  the  rates  failed  to  return  an  adequate 
compensation.  The  enforcement  of  the  state  rates  was  also  en- 
joined in  the  Nebraska  case  on  the  same  ground ;  and  in  the 
South  Dakota  case  the  decree  of  the  circuit  court  refusing  to 
enjoin  and  dismissing  the  bill  of  the  railroad  company  was  re- 
versed on  the  ground  that  the  circuit  court  had  failed  to  deter- 
mine the  reasonableness  of  the  rates,  and  the  case  was  remanded 
with  directions  for  such  determination  by  ascertaining  the  cost 
of  the  state  business.  In  the  other  railroad  cases,  where  the 
merits  of  the  appeals  were  considered,  it  was  ruled  that  the  rail- 
road companies  had  failed  to  ovecome  the  presumption  of  rea- 
sonableness of  the  rates  fixed  by  the  state  authority.- 

§  123.  Schedules  of  rates  and  special  rates. — The  federal  au- 
thority as  illustrated  in  the  cases  determined  by  the  supreme 
court  has  been  invoked  in  two  distinct  classes  of  cases.  That  is, 
where  the  entire  schedule  of  maximum  rates,  both  freight  and 
passenger,  is  fixed  by  state  authority,  and  where  there  is  not  an 
entire  schedule,  but  the  maximum  rates  are  fixed  upon  specific 

1  See  Kentucky  Turnpike  Case.  Kentucky  Rate  Case,  supra,  §  110, 
164  IT.  S.  578,  41  L.  Ed.  560  (1896);  have  all  been  appealed  to  the 
and  San  Diego  Water  Rate  Case,  supreme  court  and  are  set  for 
174  U.  S.  739,  43  L.  Ed.  1155  hearing  at  the  October  term,  1911. 
(1899);  The  Stockyards  Case,  183  These  cases  all  involve  general 
U.  S.  79,  46  L.  Ed.  92  (1902);  the  schedules  of  rates,  both  freight 
Knoxville  "Water  Case,  212  U.  S.  and  passenger.  Rate  cases  are 
12,  53  L.  Ed.  371  (1908);  the  Con-  also  pending  in  the  supreme  court 
solidated  Gas  Case,  212  U.  S.  19,  from  Nevada,  170  Fed.  Rep.  752; 
53  L.  Ed.  382   (1908).  from  Kentucky,  supra,  §  110,  and 

2  The  Minnesota  Rate  Case,  Oregon,  supra,  §  110.  Other  cases 
Shepard  v.  Northern  Pac.  R.  Co.,  are  pending  in  the  circuit  courts, 
supra,  §  110;  the  Missouri  Rate  not  yet  passed  to  final  decree,  In 
Case,  supra,  §  110;  the  Arkan-  Oklahoma,  Iowa,  Kansas  and 
Bas  Rate  Case,  supra,  §  110;    the  North  Dakota. 


192         FEDERAL  CONTROL  OF  STATE  RAILROAD  REGULATION.       [§    123 


classes  of  commodities.  In  cases  under  the  Interstate  Commerce 
Act,  as  will  be  hereafter  seen,  it  is  as  a  rule  the  latter  class  of 
cases  which  is  involved ;  that  is,  the  reasonableness  of  the  rates  on 
specific  commodities,  or  to  or  from  specific  localities,  or  more 
usually  the  relation  of  rates  as  between  competing  communities 
or  kinds  of  traffic  is  brought  under  review.^ 

When  the  state  authority  is  challenged  on  the  ground  that  the 
railroad  is  deprived  of  an  adequate  return  upon  its  property, 
the  difficulty  of  determining  this  issue  is  very  much  increased 
when  the  reduction  complained  of  is  only  upon  a  single  com- 
modity or  a  single  class  of  freight.  Such  a  reduction  cannot  be 
shown  to  be  unreasonable,  that  is  confiscatory,  simply  by  prov- 
ing that  if  the  same  reduction  were  applied  to  all  classes  of 
freight  the  railroad  would  fail  to  receive  a  proper  return;  and 
in  such  cases  the  railroad  must  show  that  this  reduction  would 
of  itself  pr&vent  its  securing  an  adequate  return  upon  its  prop- 
erty in  the  state.  The  supreme  court  said  ''in  such  a  ease  the 
great  difficulty  in  the  attempt  to  measure  the  reasonableness  of 
charges  with  reference  to  the  cost  of  transporting  a  particular 
class  of  freight  is  well  known  and  has  often  remarked.^ 


1  In  such  cases  as  in  the  recent 
proposed  general  advance  of  rates, 
general  schedules  are  of  course 
involved,  see  infra,  page  256. 

2  Northern  Pac,  R.  Co.  v.  North 
Dakota,  216  U.  S.  579,  54  L.  Ed. 
624  (1910).  This  was  a  case 
where  the  railroad  was  charged 
with  a  continuous  violation  of  the 
law  fixed  for  the  carriage  of  coal 
through  the  state.  The  supreme 
court  said  the  question  of  reason- 
ahleness  left  the  matter  in  so 
much  doubt  that  the  decree  of  the 
state  court  was  affirmed  without 
prejudice  to  the  right  of  the  rail- 
road company  thereafter  to  ren 
oi)en  the  case  for  a  trial  in  court 
proving  more  fairly  the  confis- 
catory character  of  the  rates  pro- 
posed. 

In  Minneapolis  &  St.  Paul  R.  R. 
Co.  V.  Railroad  Commission,  supra, 


the  court  sustained  a  rate  on  coal 
from  the  northern  corner  of  the 
state  to  the  southern  part  of  the 
state  requiring  a  transfer  from 
one  railroad  to  another.  The 
court  said  a  state  could  authorize 
its  railroad  commission  to  reduce 
an  unreasonable  joint  through 
rate  agreed  upon  between  two  or 
more  roads  and  apportion  the 
same  between  the  railroads  in- 
terested, and  added: 

"It  was  not  necessarily  entitled 
to  earn  the  same  percentage  of 
profit  on  all  classes  of  freight 
carried.  .  .  .  We  do  not  think 
it  beyond  the  power  of  the  state 
to  reduce  the  rate  upon  a  par- 
ticular article  provided  the  com- 
panies are  able  to  earn  a  fair 
profit  upon  their  entire  business, 
and  the  burden  is  upon  them  to 
impeach  the  action  of  the  commis; 


§    124]       FEDKKAl.  CONTKOL  OF  STATE  RArLROAD  REGULATION'.  193 


§  124.  The  valuation  of  railroad  property  in  state  regnlation. 

"Where  tlie  validity  of  a  reguhition  luidcr  slate  aiitliority  is  ([ues- 
tioned  and  a  railroad  or  any  public  service  corporation  is  in- 
volved, the  valuation  of  tlio  property  of  the  company  must  nec- 
essarily be  ascertained. 

In  some  cases  the  value  of  tlie  railroad  property  in  the  state 
has  been  ascertained  from  the  value  fixed  for  taxation  by  assess- 
ing? boards,  the  relation  of  the  a.ssossed  value  and  the  actual 
value  heing  duly  shown  or  agreed  upon.^  In  states — where  rail- 
roads are  not  taxed  through  property  valuation  but  through 
some  form  of  tax  upon  earuing.s,  this  means  of  valuation  is  not 
available,  and  the  value  therefore  must  be  separately  ascer- 
tained.^ 

The  supreme  court  has  laid  down  the  general  rule  that  in  de- 
termining value  m  cases  of  state  regulation,  it  is  not  the  original 
cost  of  the  properly,  but  the  value  at  the  time  of  regulation; 
that  is,  the  cost  of  reproduction,  which  is  the  test ;  that  is,  not  the 
expenditure  which  was  made  to  produce,  but  the  expenditure 


sion  in  this  particular 

The  commission  was  not  bound  to 
reduce  the  rate  upon  all  classes  of 
freight.  They  have  the  right  to 
reduce  it  upon  any  specific  arti- 
cle; and  if,  upon  examining  the 
tariffs  of  a  certain  road,  the  com- 
mission is  of  opinion  that  the 
rates  upon  a  particular  article  or 
class  of  freight  is  disproportion- 
ately or  unreasonably  high,  it 
may  reduce  such  rate,  notwith,- 
standing  that  it  may  be  impossi- 
ble for  the  company  to  determine 
with  mathematical  accuracy  the 
cost  of  transportation  of  that  par- 
ticular article  as  distinguished 
from  all  others.  Obviously,  such 
reduction  could  not  be  shown  to 
be  unreasonable  simply  by  prov- 
ing that  if  applied  to  all  classes  of 
freight  it  would  result  in  an  un- 
reasonably low  rate." 

lu  Atlantic  Coast  Line  R.  Co.  v. 
Fla.,  supra,  the  court,  affirming  48 
13 


Fla.  146,  in  refusing  to  disturb  a 
local  rate  on  phosphate,  said:  "We 
are  aware  of  the  difficulty  which 
attends  proof  of  the  cost  of  trans- 
porting a  single  article,  and  in 
order  to  determine  the  reasonable- 
ness of  a  rate  prescribed  it  may 
some  times  be  necessary  to  accept 
as  a  basis  the  average  rate  of  all 
transportation  per  ton  per  mile." 
It  appeared  in  another  case,  that 
of  the  Seaboard  A.  L.  Ry.  v.  Fla., 
supra,  that  the  maximum  phos- 
phate rate  fixed  by  the  commis- 
sion was  materially  larger  than 
the  average  freight  rate  per  ton 
per  mile.  See  also  Chicago  &  G. 
T.  R.  Co.  V.  Wellman,  supra;  St. 
Louis  &  S.  F.  R.  R.  Co.  v.  Gill, 
supra;  Southern  Ry.  Co.  v.  McNeil, 
C    Ct.  of  N.  C,  supra. 

1  See   Missouri    Rate   Case   and 
the  Arkansas  Kate  Case,  supra. 

2  See  the  Minnesota  Rate  Case, 
surira. 


1  94:         FEDERAL  COXTROL  OF  STATE  RAILROAD  REGULATION.        [  §    124 


that  Avill  be  nectssary  to  reproduce  the  property.^  This  prin- 
ciple that  it  is  the  present  value  of  property  that  must  be  con- 
sidered involves  the  further  question  of  the  right  of  the  railroad 
or  other  quasi  public  corporation  to  demand  a  return  upon  the 
increased  value  of  its  property,  including  what  is  termed  the 
' '  unearned  increment. ' '  - 

This  right,  however,  is  obviously  controlled  by  the  limitation 
of  the  carrier  to  reasonable  rates;  that  is,  no  increase  in  the  value 
of  property  can  justify  the  carrier  in  a  rate  which  is  unreason- 
able to  the  public.  This  qualification  was  distinctly  declared 
by  the  supreme  court  in  the  consolidated  gas  case.^ 

In  the  valuation  of  property  for  rate  regulation  the  ultimate 
fact  of  value  and  the  relevancy  of  evidence  to  prove  value 
must  be  distinguished.  Thus  in  the  Nebraska  rate  case.''  the 
court  said  that  in  determining  value  as  the  basis  for  making  rates, 
capitalization,^  the  original  cost  of  construction,  the  amount 
expended  in  permanent  improvements,  the  amount  and  market 


1  See  Smyth  v.  Ames,  supra. 

2  See  discussion  of  tliis  subject 
l3y  the  Interstate  Commerce  Com- 
mission with  reference  to  the 
recent  proposed  advance  of  freight 
rates,  infra,  §  169. 

s  From  opinion  of  supreme 
court  in  this  case,  212  U.  S.  52 
(1909):  "And  we  concur  with  the 
court  below  in  holding  that  the 
value  of  the  property  is  to  be  de- 
termined as  of  the  time  when  the 
inquiry  is  made  regarding  the 
rates.  If  the  property  which 
legally  enters  in  to  the  considera- 
tion of  the  question  of  rates  has 
increased  in  value  since  it  was 
acquired,  the  company  is  entitled 
to  the  benefit  of  such  increase. 
This  is,  at  any  rate,  the  general 
rule.  We  do  not  say  there  may 
not  possibly  be  an  exception  to  it 
where  the  property  may  have  in- 
creased so  enormously  in  value  as 
to  render  a  rate  permitting  a  rea- 
sonable return  upon  such  increased 


value  unjust  to  the  public.     How 
such  facts  should  be  treated  is  not 
a  question  now  before  us,  as  this 
case  does  not  present  it.     We  re- 
fer to  the  matter  only  for  the  ^nlr- 
pose  of  stating  that  the  decision 
herein  does  not  prevent  an  inquiry 
into  the  question  when,  if  ever,  it 
should  be  necessarily  presented. 
4  Smyth  V.  Ames,  supra. 
0  In  the  Knoxville  Water  Case, 
supra,    involving    the    validity    of 
the  rates  imposed  upon  a  munici- 
pal water  company,  the  court  said 
that     capitalization     afforded     no 
guide  to  the  present  value  of  the 
property,    where   substantially    all 
the  common  and  preferred  stock 
was     issued     under     construction 
contracts   entered   into   with   per- 
sons who  controlled  the  corporate 
action,  and  was  generally  in  ex- 
cess of  the  true  value  of  the  prop- 
erty   furnished     under    the    con- 
tracts. 


§    125J       P^EDERAI.  CUXTKOL  OF  STATE  KAJLUOAD  HEGLLATIO.V.  100 

value  of  bonds  and  stocks,  the  present  as  compared  with  the 
original  cost  of  construction,  the  probable  earning  capacity  under 
the  rates,  the  sum  icfiuired  to  operate  the  business,  are  all  mat- 
ters to  be  considered  and  must  be  given  such  weight  as  may  be 
just  and  right  in  eaeli  ease,  and  the  court  concluded  by  saying: 
"We  do  not  say  tliat  there  will  not  be  other  matters  to  be  re- 
garded in  estimating  values." 

The  decisions  of  the  supreme  court  and  other  tribunals  on 
questions  of  valuation  in  the  rate  cases,  where  the  question  at 
issue  is  as  to  the  reasonable  return  a  corporation  is  entitled  to 
receive  under  a  public  regulation  of  rates,  must  be  distinguished 
from  eminent  domain  and  analogous  cases,  Avhere  a  right  of 
purchase  of  the  property  of  public  utility  companies  is  exercised 
by  numicipalities  under  reserved  contract  rights ;  ^  and  also 
from  cases  of  valuation  for  taxation,  where  the  ascertainment 
of  relative  value  under  construction  of  statutory  standards  is 
involved. 

§  125.  The  apportionment  of  railroad  property  in  state  reg- 
ulation.— In  the  case  of  an  interstate  railroad  where  the  lines 
may  extend  over  several  states,  the  problem  is  complicated  as  the 
value  of  that  part  of  the  property  which  is  located  in  the  state 
must  be  ascertained,  and  when  ascertained,  must  be  apportioned 
as  between  the  state  and  federal  business  which  is  conducted 
with  the  same  tracks  and  the  same  equipment. 

The  most  direct  and  simple  method  of  apportioning  to  a  state 
the  value  of  the  interstate  railroad  located  therein  is  on  a  basis 
of  mileage,  and  this  method  has  been  approved  as  a  prima  facie 
basis  for  taxation,  both  as  to  tangible  and  intangible  property.- 
P>nt  this  basis  has  obvious  limitations  both  in  rate  regulation 

1  See    Omaha   v.    Omaha   Water  (1894),  8th  Circuit;  San  Diego  Co. 

Co.,  218  U.  S.  180,  54  L.  Ed.  991  v.  Jasper,  189  U.  S.  439   (1903),  47 

(1910),  where  the  court  said  that  L.    Ed.    892,    affirming    110    Fed. 

an    option    to    purchase    excluded  Rep.  702,  as  to  municipal  regula- 

any  value  on  account  of  unexpired  tion  of  irrigation  rates, 

franchise,  but  did  not  include  the  2  West,  Union  Tel.  Co.  v.  Massa- 

value   as  a  going  concern;    Knox-  chusetts,  125  U.  S.  530   (1888),  31 

ville  Water  Co.  Case,  supra;  Wil-  L.  Ed.  790;   Adams  Express  Co.  v. 

cox  V.  Consolidated  Gas  Co.,  SHp?a;  Ohio,  165  U.  S.  194   (1897).  41  L. 

The     Kansas     City     Waterworks  Ed.  683. 
Case,    62   Fed   Rep.   853,   C.   C.   A. 


196         FEDERAL  CONTROL  OP  STATE  RAILROAD  REGULATION.       [§    126 

and  in  taxation,  and  its  application  may  do  grave  injustice. 
Thus  where  the  railroad  extends  through  a  state  where 
it  has  very  valuable  terminal  property  and  runs  through  a 
rich  populous  section,  while  in  another  state  it  has  no  such  prop- 
erty and  runs  through  a  poorly  developed  country,  the  apportion- 
ment on  a  mileage  basis  would  be  clearly  inapplicable.^  Other 
methods  therefore  are  suggested,  such  as  the  apportionment  basis 
upon  the  gross  or  net  revenues. 

Not  only  must  there  be  an  apportionment  in  determining  the 
state  value,  if  it  is  based  upon  the  general  value  of  the  railroad 
system,  but  on  the  issue  of  an  alleged  confiscatory  state  regula- 
tion there  must  be  an  apportionment  of  that  state  value  to  the 
state  and  interstate  business  carried  on  with  the  same  property 
and  equipment.  This  has  been  done  on  what  is  loiown  as  the 
revenue  basis;  that  is,  the  value  of  the  property  is  apportioned 
according  to  the  state  and  interstate  business.  Where  the  regu- 
lation complained  of  affects  only  the  passenger  or  freight  busi- 
ness, there  must  be  a  still  further  apportionment  of  this  state 
and  interstate  value  of  the  state  property  as  between  the  pas- 
senger and  the  freight  business,  both  state  and  interstate.- 

§  126.  Confiscation  in  state  regulation ;  how  proved. — Assum- 
ing that  the  proportionate  property  in  the  state  has  been  ap- 
proximately ascertained  and  apportioned  to  the  different  classes 
of  traffic,  state  and  interstate,  the  determination  of  a  claim  of 
confiscation  then  requires  that  the  net  revenues  of  the  state  as 
distinguished  from  the  interstate  business,  must  be  ascertained. 
The  sources  of  the  different  classes  of  revenue,  whether  state  or 
interstate,  passenger  or  freight,  can  be  determined  with  accuracy 
from  the  records  of  the  railroad  company. 

In  order  to  ascertain  the  net  revenues  derived  from  the  intra- 
state business  the  cost  of  conducting  the  intrastate  as  distin- 
guished from  the  state  business  must  still  be  ascertained.^ 

1  See    an    interesting    and    able  21  Census  Bureau  (1905)   Govern- 

discussion  of  ttiis  subject  by  Prof.  ment  Printing  Office." 

B.  H.  Meyer,  now  of  tbe  Interstate  2  See      Arkansas      Rate      Case 

Commerce  Commission  and  form-  supra;  Missouri  Rate  Case,  supra; 

erly    of    the    Wisconsin    Railroad  Minnesota  Rate  Case,  supra. 

Commission,  in  "The  Methods  for  3  In    the    South    Dakota    Rate 

the  Distribution   of  Railway  Val-  Case,   supra,   where  the   court  re- 

ues   Among    States,    Bulletin    No.  versed  the  judgment  of  the  circuit 


§    120]       FEDERAL  CONTROL  OP  STATE  RAH^ROAD  REGULATION.  ]97 


As  the  property  and  equipment  are  used  for  all  classes  of 
traffic,  there  is  no  separate  record  in  the  company's  books  of  the 
cost  of  doing  anj'  spocitic  class  of  basincss;  and  such  separate 
cost,  therefore,  can  only  be  ascertained  by  what  is  known  as  the 
revenue  theory,  wherein  the  cost  of  each  class  of  traiific  is  esti- 
mated by  apportioning  the  total  cost  in  proportion  to  the  revenue 
derived  from  each  class  of  traiTic,  or  the  cost  of  each  class  of 
traffic  is  estimated  by  "allocating"  such  expenses  as  can  properly 
be  charged  to  any  class  of  traffic  and  distributing  the  re- 
maining cost  upon  such  determined  units  as  the  cost  per  ton 
mile  and  the  cost  per  passenger  mile.^ 


court,  90  Fed.  Rep.  636,  the  fail- 
ure to  ascertain  the  cost  of  doing 
a  local  business,  the  court  said 
that  the  inability  to  ascertain  the 
cost  with  mathematical  accuracy 
v.as  no  reason  for  not  determining 
the  cost  from  the  best  evidence 
obtainable. 

1  The  revenue  theory  and  ton 
mile  theory.  See  a  very  thorough 
discussion  of  these  different  meth- 
ods of  estimating  the  cost  of  dif- 
ferent classes  of  traffic  by  the  Wis- 
consin State  Commission  in  Buell 
V.  C.  M.  &  St.  P.  R.  R.,  1  "Wis. 
Commission  R.  R.  Report,  324. 

See  also  McPherson,  J.,  in  St 
Louis  &  S.  F.  R.  Co.  v.  Hadley, 
Missouri  Rate  Case,  supra;  Far- 
rington,  J.,  in  the  Nevada  Rate 
Case,  supra;  Vandeventer,  J.,  in 
Arkansas  Rate  Cases,  163  Fed. 
Rep.  141;  Sanborn,  J.,  in  Minne- 
sota Rate  Case,  184  Fed.  Rep.  765. 
See  also  report  of  Master  in  this 
case. 

In  the  Oklahoma  Rate  Case  the 
circuit  court  of  appeals,  8th  cir- 
cuit (1911),  185  Fed.  329,  approved 
the  revenue  theory  as  the  more 
reasonable  and  equitable.  It  was 
conceded  that  cases  could  be  imag- 
ined as  suggested  by  the  supreme 
court  in  the  South  Dakota  Case, 


176  U,  S.  167,  wherein  the  results 
did  not  seem  to  be  perfect,  but  the 
ton  mile  theory  was  open  to  ob- 
jections, and  the  revenue  basis  ap- 
pealed more  persuasively  to  the 
reason  than  any  other. 

See  Hook,  J.,  in  same  case,  in 
circuit  court,  177  Fed.  1.  c.  p.  498. 

In  the  Arkansas  Rate  Case,  187 
Fed.  Rep.  292,  1.  c.  320  (1911),  the 
court,  Trieber,  J.,  said  that  a  care- 
ful consideration  of  the  facts 
showed  that '  neither  of  these 
theories  would  produce  approxi- 
mately correct  results  if  no  other 
factors  were  taken  into  considera- 
tion. The  straight  revenue  theory 
did  not  take  into  consideration  the 
increased  rates  charged  for  intra- 
state traffic.  The  ton  mile  theory 
did  not  consider  the  additional  ex- 
pense of  the  local  business.  'The 
court  concluded  that  the  fairest 
method  was  to  apportion  the  cost 
of  maintaining  the  way  and 
structures  of  the  railroad  between 
the  intrastate  and  interstate  busi- 
ness on  the  earnings  from  the  two 
classes  of  business,  while  the  cost 
of  locomotive  and  car  maintenance 
which  should  be  charged  to  each 
class  of  business,  could  be  more 
nearly  approximated  by  using  the 
car  mile  basis.    Such  expenditures 


19S         FEDERAL  CONTROL  OF  STATE  RAILROAD  REGULATION.       [§    126 

If  it  appears  that  the  cost  of  conducting  the  intrastate  busi- 
ness is  greater  proportionately  than  the  interstate  business,  al- 
lowance may  be  made  for  such  extra  cost  from  the  best  evidence 
obtainable.^ 


as  could  be  definitely  assigned  to 
the  intrastate  and  interstate  busi- 
ness, were  allocated"  accordingly. 
1  The  comparative  cost  of  intra- 
state and  interstate  business.  The 
contention  is  made  and  recognized 
with  approval  in  several  cases,  see 
South  Dakota  Rate  Cases,  supra, 
and  the  Nebraska  Rate  Case,  supra, 
and  by  Vendeventer,  J.,  in  the  Ar- 
kansas Rate  Case,  163  Fed.  Rep. 
141,  that  the  production  of  a  given 
amount  of  revenue  is  attended 
with  greater  cost  in  intrastate 
business  than  in  interstate  busi- 
ness. In  the  Minnesota  Rate  Case, 
snpra,  the  court  said  that  there 
was  an  increased  cost  in  the  addi- 
tional fuel  consumed  and  increased 
wear  and  tear  of  machinery  on  each 
train  involved  in  the  stopping  at 
every  station.  As  to  the  rulings 
of  the  commission  on  through  and 
local  rates  under  the  Interstate 
Commerce  Act,  see  infra,  §  180. 
While  local  rates  are  usually  in- 
trastate rates,  and  through  rates 
Interstate  rates,  this  is  not  always 
the  case,  particularly  in  respect  to 
passenger  traffic.  Where  a  large 
city  is  located  at  or  near  a  state 
boundary  extensive  suburban  local 
business  may  be  interstate  busi- 
ness, while  through  express  trains 
from  one  end  of  the  state  to  the 
other  will  be  intrastate.  The  es- 
timates of  experts  as  to  the  in- 
creased cost  of  intrastate  business 
in  reported  cases  differ  widely, 
dependent  in  some  cases  largely 
upon  local  conditions. 


In  the  Minnesota  Rate  Case, 
184  Fed.  Rep.  765,  the  court  af- 
firmed the  report  .of  the  master 
that  the  cost  of  doing  inti-astate 
business,  was  two  and  one-half 
times  more  than  the  cost  of  doing 
interstate  business,  and  that  the 
cost  of  doing  intrastate  passenger 
business  was  fifteen  percent  more 
than  the  cast  of  doing  interstate 
passenger  business. 

In  the  Oklahoma  case  it  was 
said  by  Hook,  J.,  177  Fed.  Rep.  1. 
c.  499,  that  it  was  claimed  by  the 
railroad  men  that  the  cost  of  local 
freight  traffic  was  from  two  to 
eight  times  as  much  as  that  of  In.- 
terstate  traffic,  and  of  local  pass- 
enger traffic  from  twenty-five  per- 
cent to  fifty  percent  more,  but  it 
was  probable  that  the  difference 
mentioned  in  the  freight  traffic 
should  not  be  fully  applied  in  a 
division  of  cost  on  the  revenue 
basis,  for  there  the  difference 
found  expression  in  a  measure  in 
the  relative  revenue  proportions. 

In  the  Arkansas  Rate  Case, 
supra,  the  court  found  that  the 
total  difference  in  cost  between 
intrastate  and  interstate  freight 
was  two  hundred  and  ten  percent 
in  favor  of  the  intrastate.  This 
was  after  deducting  the  increased 
revenue;  and  on  the  same  basis 
the  increased  cost  of  the  intrastate 
passenger  service  was  ten  percent 
net  greater  than  that  of  the  inter- 
state passenger. 


§    3  2/ j       FKl'KKAL  CONTROL  OF  STATE  RAILROAD  REGULATIOX.  ]!).) 

§  127.  Rate  of  profit  necessary  to  avoid  charge  of  confisca- 
tion.— Wlit'U  the  value  of  the  investment  in  the  state  and  tlie 
net  revenue  reahzcd  thereon  under  tlie  established  rates  liave 
been  ascertained,  this  net  revenue  must  1)0  compaj-ed  with  the 
rate  of  profit  which  the  raili-oad  is  entitled  to  realize  upon  such 
an  investment.  The  rule  is  laid  down  by  the  supreme  court  in 
the  New  York  City  gas  case/  that  there  is  no  particular  rate 
of  compensjition  wliich  mnst  in  all  cases  and  in  all  parts  of  the 
country  be  regarded  as  sufficient  for  capital  invested  in  business 
enterprises.  Such  compensation  must  depend  greatly  upon  cir- 
cumstances and  locality  and  above  all  upon  the  amount  of  hazard 
in  the  enterprise.  Under  the  facts  of  that  case  in  view  of  the 
absence  of  competition  the  court  lield  that  a  rate  which  would 
permit  a  return  of  6  per  cent,  would  be  enough  to  avoid  a  charge 
of  confiscation. 

In  the  California  water  rate  case-  the  supreme  court  held 
that  a  reduction  of  water  rates  by  a  board  of  supervisors  so  as  to 
give  an  annual  income  of  6  per  cent,  of  the  then  value  of  the 
property  of  the  water  company  actually  used  to  supply  water 
to  the  public,  did  not  necessarily  amount  to  a  taking  of  property 
without  due  process  of  law. 

In  Minnesota  rate  ease  ^  where  the  state  legal  rate  of  interest 
was  6  per  cent,  in  the  absence  of  contract  and  10  per  cent,  under 
contract,  the  court,  Sanborn,  J.,  affirmed  the  report  of  the  master 
holding  that  the  railroad  companies  were  entitled  to  a  net  re- 
turn of  7  per  cent,  per  annum  upon  their  respective  properties. 
The  court  said  that  in  view  of  the  fact  that  the  business  was 
subject  to  public  regulation  a  railroad  should  be  permitted  to 
receive  a  return  sufficient  to  accumulate  a  reasonable  surplus 
for  times  of  depression  and  to  maintain  the  character  of  their 
service.  The  court,  therefore,  held  that  7  per  cent,  upon  the 
values  of  the  property  in  ]\Iinnesota  was  no  more  than  the  rail- 
roads were  entitled  to  under  the  constitution  of  the  United 
States. 

In  the  Arkansas  rate  case  *  the  court  based  its  conclusion 
that  the  railroads  were  entitled  to  a  return  of  G  per  cent,  upon 

1  Wilcox  V.  Consolidated  Gas  s  See  Shepard  v.  Xorthern  Pac. 
Co.,  supra.                                                 R    Co.,  supro. 

2  Stanislaus  v.  Joaquin,   192  U.         *  See  187  Fed.  Rep.  290  (1911). 
S.   204,  48  L.  Ed.  406    (1904),  re- 
versing 113  Fed.  Rep.  390. 


200         FEDER.\X,  CONTROL  OF  STATE  RAILROAD  REGULATION.       [§    128 

the  actual  value  of  the  investment  in  that  state,  regardless  of  cap- 
italization^ upon  the  llnding  that  the  roads  were  efficiently  and 
honestly  managed  and  traversed  a  fertile  agricultural  section 
.  with  natural  resources  sufficient  to  justify  their  construction  and 
that  the  cost  of  building  was  not  greater  than  the  average  cost  of 
roads  in  the  southwest.  In  this  case,  in  addition  to  the  6  per 
cent.,  an  allowance  of  1%  percent,  additional  in  prosperous  times 
where  there  were  no  extraordinary  losses  by  casualty  was  made.^ 

In  the  circuit  court  of  Kentucky  ^  a  telephone  company  was 
lield  entitled  to  set  aside  as  a  reserve  a  sum  equal  to  7  per  cent, 
of  the  value  of  its  property  devoted  to  public  use,  exclusive  of 
real  estate,  working  cash  capitals,  supplies  on  hand,  and  to  enjoy 
a  net  revenue  equal  to  7  per  cent,  on  all  its  property.  This  was 
the  case  wherein  there  was  serious  opposition  and  the  rates  were 
so  reduced  by  ordinance  that  it  could  not  make  such  earnings, 
and  the  enforcement  of  the  ordinance  was  enjoined. 

The  principle  announced  in  all  these  cases  is  that  no  uniform 
rule  as  to  rate  of  profit  can  be  declared,  but  that  each  case  must 
be  judged  upon  its  own  facts.  In  the  words  of  the  supreme  court, 
the  public  service  corporation,  which  owes  duties  to  the  public 
as  well  as  to  the  stockholders,  has  no  right  to  any  specific  rate  of 
dividend  upon  its  capital  stock,^  without  reference  to  the  rights 
of  the  public,  and  that  the  public  could  not  properly  be  subjected 
to  unreasonable  rates  in  order  simply  that  stockholders  may  earn 
dividends. 

§  128  (100).  Protection  of  the  carrier  against  discriminating 
state  regulation. — The  fourteenth  amendment  protects  the  car- 
rier not  only  against  unreasonable  state  limitation  of  rates,  but 
also  against  any  state  legislation,  which  unreasonably  interferes 

1  See    also    discussion    of    this  of   fixed    charges    including   as    a 

subject  in  the  investigation  of  ad-  fixed  charge  the  dividend  upon  the 

vances  in  rates  by  the  Interstate  preferred  stock  should  be  equiva- 

Commerce  Commission   (1911),  20  lent  to  between  seven  and  eight 

I.  C.  C.  R.  307,  336  as  to  the  West-  percent  on  the  common  stock  in- 

em  cases,  and  20  I.  C.  C.  R.  243  eluding  amount  carried  to  surplus 

as  to  the  Eastern   cases.     In  the  fund. 

latter  case  it  was  said  on  the  as-  2  Cumberland  v.  City  of  Louis- 
sumption  that  the  capital  did  not  ville,  C.  C,  N.  D.  of  Ky.  (1911). 
exceed  its  actual  value,  that  the  s  Turnpike    Road    Co.    v.    San- 
sum    remaining    after    permitting  ford,  1G4  U.  S.  578,  41  L.  Ed.  560. 


§    128]       FEDERAL  CONTROL  OP  STATE  RAILROAD  REGULATION.  201 

with  the  carrier's  right  to  carry  on  and  manage  its  concerns. 
This  federal  guaranty  may  be  invoked,  irrespective  of  whether 
there  is  any  contract  between  the  state  and  the  company  exempt- 
ing it  in  any  measure  from  state  control.  While  the  carrier  is 
subject  to  the  general  police  power  of  the  state  in  the  general 
conduct  of  its  affairs,  the  running  of  its  trains  and  providing  for 
the  proper  accommodation  of' the  public,  it  cannot  be  subjected  to 
discriminating  or  class  legislation.  Thus,  a  statute  of  ^Michigan 
whicli  provided  that  the  railroads  should  keep  for  sale  one- 
thousand  mile  tickets  good  for  two  years  at  a  reduced  rate,  such 
tickets  to  be  issued  in  the  name  of  the  purchaser's  wife  an3' 
children  when  desired,  and  redeemable  by  the  company  if  not 
used,  was  held  violative  of  due  process  of  law  and  the  equal  pro- 
tection of  the  laws.  The  court  said  that  such  legislation  was  not 
included  in  the  power  to  fix  maximum  rates,  and  that  the  com- 
pany had  the  right  to  insist  that  all  persons  should  be  compelled 
to  pay  alike  and  that  no  discrimination  against  it  in  favor  of  cer- 
tain classes  of  married  men  with  families,  excursonists  or  others 
should  be  made  b}^  the  legislature.^ 

The  same  principle  has  been  applied  in  holding  invalid  a 
statute  requiring  a  railroad  company  to  deliver  its  ears  to  an- 
other company  from  and  to  any  point,  where  there  was  a  physical 
connection  between  the  tracks,  wdthuot  adequate  protection  of  the 
law  or  undue  detention  and  without  securing  due  compensation. 
It  was  held  that  adequate  provision  for  compensation  should  be 
made  in  the  law  itself,  and  the  defect  could  not  be  cured  by  in- 
serting such  provisions  in  judgments  in  the  discretion  of  the 
court.^ 

A  railroad  company  cannot  be  compelled,  at  its  own  expense 
and  without  preliminary  hearing,   to  construct  side  tracks  or 

1  Lake  Shore  &  M.  So.  R.  Co.  v.  vhere  it  sustained  the  statute  of 

Smith,   173   U.    S.   684    (1899),   43  Ohio    requiring    a    railroad    com- 

L.    Ed.    858.    Three    justices    dis-  pany  to  cause  three  of  its  regular 

senting.     The   court   in    this   case  passenger  trains  to  stop  at  a  sta- 

distinguished  the  lawful  exercise  tion  containing  over  3,000  inhabi- 

of  the  state   power   in  the  enact-  tants.     See  supra,  §  31. 

ment   of   reasonable   state   regula-  2  L.    &    N.    R.    Co.    v.    Central 

tions  for  the  public  Interest  in  a  Stock   Yards   Co.,    212   U.    S.    133 

case  of  the  same  company,  at  the  (1908),   53   L.   Ed.   441,   reversing 

game  term.     R.  R.  Co.  v.  Ohio,  173  30  Ky.  L.  R.  18. 
U.   S.   285,  43  L.   Ed.  702    (1899), 


202         FEDERAL  CONTROL  OF  STATE  RAILRO-VD  REGULATION.       [§    129 

switclies  necessary  to  reach  grain  elevators  wliicli  may  be  erected 
adjacent  to  the  right  of  way,  even  if  the  statute  was  construed 
as  only  providing  for  cases  where  the  demand  for  the  facility 
was  reasonable.  The  court  based  its  opinion  however,  upon  the 
absence  of  preliminary  hearing  and  compensation.^  The  court 
said  in  its  opinion  that  it  did  not  intend  to  prejudice  a  later 
amendment  providing  for  a  preliminary  hearing  and  compensa- 
tion, whicli  was  said  to  have  been  passed. 

§  129  (101).  The  state  power  of  regulation  not  limited  to 
rates. — The  power  of  the  state,  in  its  control  of  domestic  com- 
merce, to  fix  maximum  rates  subject  to  the  judicial  determination 
of  their  reasonableness  also  includes  the  power  to  make  any 
reasonable  regulations  for  the  conduct  of  the  carriers'  business, 
subject  to  the  judicial  determination  of  what  is  reasonable.  Thus 
discriminations  may  be  prohibited,  the  requirement  of  facilities 
for  the  transfer  of  freight  by  direct  connection  at  the  intersec- 
tion of  railroads  may  be  rf^quired,^  and  the  reasonableness  of 
contracts  of  the  carriers,  whether  such  contracts  be  made  directly 
with  the  patrons  of  the  road  or  for  a  general  arrangement  be- 
tween railroads  in  the  transportation  of  persons  and  property, 
are  prope-rly  subject  to  state  control.^  The  consolidation  of 
parallel  or  competing  lines  of  railway  may  be  prohibited.* 

AYhile  a  charter  contract  not  containing  a  reservation  on  the 
part  of  the  state  of  the  right  to  alter  or  amend  is  protected  by 
tbe  federal  constitution  against  impairment  by  subsequent  legis- 
lation, the  right  may  be  reserved  by  the  state  to  alter,  amend  or 
repeal  the  charter  contract.  In  such  cases  the  rights  vested  in 
the  corporation  by  the  tenns  of  the  charter  contract  may  be 
modified  by  subsequent  legislation,  though  this  right  of  impair- 
ment or  annulment  does  not  extend  to  vested  rights  in  property 
or  contract  acquired  by  user  of  corporate  powers  and  franchises. 
Thus  where  by  a  railroad  charter  the  general  power  is  given  to- 

1  Missouri  Pacific  Ry.  Co.  v.  Ne-  etc.,  R.  Co.  v.  Jacobson,  179  U.  S. 
braska,   217   U.   S.   196,   54  L.  Ed.       287  (1900),  45  L.  Ed.  194. 

727    (1910),   reversing  81  Neb.   p.  3  Minneapolis    &    St.    Louis    R 

5;l  Co.    v.   Minnesota,    186    U.    S.    257 

2  Atchison,  etc.,  R.  Co.  v.  Den-       (1902),  46  L.  Ed.  1151. 

ver,    etc.,   R.    Co.,    110   U.    S.    667  *  Louisville  &  Nashville  R.   Co. 

(1884),  28  L.  Ed.  291;   Wisconsin,      v.  Kentucky,  161  U.  S.  677  (1896), 

40  L.  Ed.  849. 


§    12DJ       FEDERAL  CONTROL  OK  Sl\li;  K.MLKOAD  KK(;LLAT10X.  203 

consolidate  with,  purcliase,  lta.se  or  acquire  the  stock  of  other 
roads,  wliieli  had  remained  unexecuted,  the  legislature  may  de- 
clare by  subsequent  acts  that  this  power  shall  not  extend  to  the 
purchase,  lease  or  consolidation  with  parallel  or  competing 
lines.^ 

AVherc  a  railroad  corporation  is  organized  under  state  law  by 
the  purchasers  of  the  property  of  a  railroad  corporation  at  fore- 
closure sale,  there  is  no  contract  right  created  protected  by  the 
federal  constitution  against  the  enforcement  of  subsequent  statu- 
tory regulations  respecting  railroad  rates  existing  when  the  new 
company  was  incorporated,  though  not  in  force  when  the  mort- 
gage was  executed,  and  the  railroad  company,  by  incorporating 
under  a  general  law  of  the  state,  is  estopped  to  contest  the 
validity  under  the  federal  constitution  of  the  provisions  of  an 
act  regulating  railroad  rates,  which  form  one  of  the  burdens  im- 
posed by  the  state  as  a  condition  of  becoming  an  incorporated 
body.^ 

It  is  the  proper  duty  of  a  railroad  company  to  establish  sta- 
tions at  proper  places  on  its  lines,  and  it  is  therefore  within  the 
power  of  a  state  to  make  it  the  prima  facie  duty  of  the  company 
to  establish  stations  at  all  villages  and  boroughs  on  their  re- 
spective lines.  A  state  statute  requiring  such  erection  of  sta- 
tions by  railroad  companies  on  the  order  of  the  state  railway 
and  warehouse  commission,  the  burden  being  imposed  upon  the 
company  of  meeting  the  presumption  that  the  order  of  the  com- 
mission is  correct,  does  not  amount  to  an  invasion  of  the  rights 
of  private  property  and  is  not  repugnant  to  the  constitution  of 
the  United  States.^ 

The  subject  of  the  state  power  of  railroad  regulation  where 
affecting  interstate  commerce  has  been  considered  in  chapter  2  in 
connection  with  the  conciu'rent  and  exclusive  powers.  In  such 
cases  the  power  of  the  state  is  sustained  as  a  lawful  regulation 
of  interstate  comuierce  in  the  absence  of  legislation  by  congress. 
In  the  class  of  cases  now  under  consideration  the  state  legisla- 
tion   is    assailed,    not    on    the    ground    of    interference    with 

1  Piersall  v.  Great  Northern   R  of  New   York   v.   Cook,   148   U.    S. 

Ck).,  161  U.  S.  646  (1896),  40  L.  Ed.  397,  37  L.  Ed.  498    (1892). 

838.  3  :\Iinneapolis,    etc.,    R.    Co.    v. 

« Grand    Rapids    &    Indiana    R.  Minnesota,    193   U.    S.    53    (1904), 

Co.  V.  Osborne,  193  U.  S.  17.  48  L.  48  L.  Ed.  614. 
Ed.    .^98    (1904'*.     See  also  People 


204         FEDERAL  CONTROL  OF  STATE  RAILROAD  REGULATION.       [§    129 

interstate  commerce,  but  as  an  impairment  of  the  property- 
rights  of  tlie  railroad  violative  of  due  process  of  law  and  the 
equal  protection  of  the  laws  as  secured  by  the  constitution  of 
the  United  States. 

State  reg-ulatioDS  have  been  sustained  requiring  railroads  to 
adjust  and  pay  claiins  on  intrastate  shipments  within  forty  days 
after  the  filing  of  the  claim  under  the  penalty  of  $50.00  for  each 
failure,  where  there  could  be  no  award  of  penalty  unless  there 
was  a  recovery  for  the  full  amount  of  the  claim.^  The  order  of 
a  state  commission,  requiring  a  railroad  to  restore  a  connection 
at  a  given  point  with  the  train  of  another  road,  was  within  the 
power  of  the  state,  if  other  connections  were  inadequate  for 
public  convenience,  although  compliance  with  the  order  might 
necessitate  the  running  of  an  extra  train  or  the  extent  of  the 
run  of  the  local  train,  as  long  as  the  income  of  the  railroad 
from  its  business  in  the  state  afforded  adequate  remuneration.^ 

A  railroad  company  in  Kansas  was  compelled  by  peremptory 
mandamus  by  the  supeme  court  of  the  state  to  operate  a  pas- 
senger train  between  a  given  point  and  the  state  line ;  and  this 
was  held  within  the  lawful  power  of  the  state.^  The  state  also 
has  the  right  to  insist  upon  equality  between  all  its  citizens  and 
to  require  a  rate  for  all  where  the  railroad,  under  the  guise  of  a 
rebilling  rate,  gives  anyone  such  rate,*  and  may  require  a  rail- 
way to  operate  a  particular  line,  although  compliance  may  entail 
expense  and  require  the  exercise  of  eminent  domain,  and  may  re- 
quire a  railway  company  to  broaden  and  standardize  a  narrow 
guage  railroad  throughout  its  length.^ 

A  state  may  also  lawfully  legislate  for  the  safety  of  those 
engaged  in  railroad  business  within  its  limits,  and  may  enact 

1  Seaboard  Air  Line  v.  Seeders,  Public  Service  Commission  of  New 
207  U.  S.  73,  52  L.  Ed.  108,  affirm-  Yorlc  could  compel  an  Interstate 
ing  73  N.  C.  71  (1907).  railroad     to     put     on     additional 

2  Atlantic  Coast  Line  R.  R.  v.  trains  when  required  for  local 
Corporation  Commission,  206  U.  S.  purposes. 

1,  51  L.  Ed.  933   (1906),  affirming  4  Alabama    &    Vicksburg   R.    R. 

137  N.  C.  18,  citing  Wisconsin  R.  Co.  v.  Commission  of  Mississippi, 

Co.  V.  Jacobson,  supra.  203  U.  S.  496,  51  L.  Ed.  289  (1906). 

3  Missouri  Pacific  R.  R.  v.  Kan-  ^  Mobile  J.  &  K.  C.  R.  R.  Co.  v. 
sas,  216  U.  S.  p.  262,  54  L.  Ed.  472  Mississippi,   210   U.    S.   187,   52  L. 
(1910).     In  D.  &  W.  R.  Co.  v.  Ste-  Ed.     1016     (1908),     affirming     86 
vans,  172  Fed.  595,  N.  D.  of  N.  Y.  Miss.  172  and  89  Miss.  724. 
(1909),  it  was  held  that  the  State 


§    130]       FEDERAL  CONTROL  OP  STATE  RAILROAD  REGULATION.  205 

reasonable  regulations  to  that  end  which  Avill  be  valid  as  to  all 
Avilhin  its  juiisdietion  in  the  absence  of  legislation  by  congress.^ 

§  130  (102).  The  state  Anti-Trust  Laws  and  the  fourteenth 
amendment. — The  power  of  the  state  in  the  eii;i<-tiiient  of  so- 
called  anti-trust  legislation,  prohibiting  contracts  and  combina- 
tions in  restraint  of  trade,  had  been  discu.ssed  by  the  federal 
courts  in  connection  with  the  regulation  and  control  of  railroads 
and  other  public  service  corporations;  and  it  has  been  held  that 
such  statutes  are  witliin  the  constitutional  power  of  the  state 
when  not  violative  of  the  federal  guarantees  of  the  due  process 
of  law  and  the  equal  protection  of  the  laws  or  otlier  constitu- 
tional guarantees. 

The  extent  of  the  state  power  in  the  enactment  of  such  statutes 
is  illustrated  in  the  decision  of  the  supreme  court,'-  holding  that 
a  statute  of  Wisconsin  Avhich  punished  combining  for  the  pur- 
pose of  wilfully  or  maliciously  injuring  another  in  his  business, 
and  construed  by  the  supreme  court  of  the  state  as  requiring 
malicious,  as  distinguished  from  mere  wilfull  injury,  was  not 
violative  of  the  lawful  right  to  contract  protected  by  the  four- 
teenth amendment.  The  court  said  that  malicious  mischief  was 
a  proper  subject  for  legislative  repression,  and  still  more  were 
combinations  for  the  purpose  of  inflicting  it,  and  that  it  would 
be  impossible  to  hold  that  the  liberty  to  combine  to  inflict  such 
mischief,  even  upon  such  intangibles  as  business  or  reputation, 
was  among  the  rights  which  the  fourteenth  amendment  was  in- 
tended to  preserve.^  The  court  did  not  decide  what  would  be 
the  force  of  the  constitutional  objection  if  the  statute  was  con- 
strued to  embrace  combining  to  effect  wilful,  as  distinguished 

1  Chicago,  R.  I.  &  P.  v.  Arkan-  3  The  conviction  affirmed  in  this 
sas,  219  U.  S.  453,  55  L.  Ed.  275,  case  was  that  of  certain  newspa- 
affirming  SG  Ark.  412  (1910),  sus-  per  managers  who,  it  was  alleged, 
taining  a  statute  prescribing  a  had  combined  to  maliciously  in- 
minimum  of  three  brakemen  for  jure  a  rival  paper  by  agreeing  to 
freight  trains  of  more  than  refuse  space  to  advertisers  who 
twenty-five  cars,  regardless  of  any  should  pay  the  increased  rates 
equipment  with  automatic  coup-  fixed  by  such  rival,  except  at  a 
lers  and  air  brakes.  corresponding     increase,     but     to 

2  Aikens  v.  Wisconsin,  195  U.  S.  pemiit  those  to  advertise  in  their 
194,  49  L.  Ed.  154  (1904);  Smiley  papers  at  the  old  rate  who  should 
V.  Kansas,  196  U.  S.  447,  49  L.  Ed.  refuse  to  pay  their  rival  the  new 
546    (1905).  rate. 


2Uli         FEDERAL  CONTROL  OF  STATE  RAILROAD  REGULATION.       [  §    130 

from  malicious,  injur}'.  The  Texas  Anti-Trust  Law  had  been  ad- 
judged defective  on  account  of  discriminatory  features  ^  and  it 
was  held  by  tlie  supreme  court,^  in  affirming  the  judgment  of 
the  Texas  court,  forfeiting  the  license  of  a  foreign  corpora- 
tion to  do  business  in  the  state  because  of  its  violation  of 
the  anti-trust  laws  in  entering  into  an  agreement  to  fix  the 
price  of  cotton  seeds,  that  it  was  bound  by  the  construction 
of  the  Texas  statutes,  made  by  the  Texas  courts,  which  held 
that  the  discriminator}^  features  of  the  act  had  been  repealed. 

Such  a  law  is  invalid  when  it  attempts  to  exempt  a  certain 
class  of  the  comnuinity,  such  exemption  being  on  no  reasonable 
•basis  of  classification.  Thus,  the  Anti-Trust  Law  of  Illinois  was 
held  invalid  on  the  ground  tliat  agricultural  products  or  live 
stock  in  the  hands  of  the  producer  or  raiser  are  exempted  from 
the  operation  of  the  statute,  which  prohibited  the  recovery  of 
the  price  of  the  article  sold  by  any  trust  or  combination  if  in 
restraint  of  trade  or  commerce  in  violation  of  the  act.  The  su- 
preme court  said  that  this  discrimination  was  a  denial  of  the 
equal  protection  of  the  laws.^  The  court  said  that  such  a  statute 
was  not  a  legitimate  exertion  of  the  power  of  taxation,  rested 
upon  no  reasonable  basis,  was  plainly  arbitrary  and  clearly  de- 
nied the  equal  protection  of  the  laws  to  those  against  whom  it 
discriminated ;  as  this  exemption  was  such  a  material  feature  of 
the  law,  that  presumably  it  would  not  have  been  enacted  without 
it,  the  whole  law  was  held  void. 

The  Tennessee  Anti-Trust  Act,  which  provided  that  corporate 
violators  should  be  proceeded  against  by  bill  in  equity  on  rela- 
tion of  the  attorney  general,  while  any  persons  offending  its 
provisions  could  not  be  tried  without  a  grand  jury  investigation 
and  indictment  or  presentment  and  a  trial  by  jury  with  the  re- 
quirement of  establishing  guilt  beyond  a  reasonable  doubt  and 
to  the  benefit  of  the  statute  of  limitations  of  one  year,  did  not 
deny  the  equal  protection  of  the  laws.  The  supreme  court  said 
that  the  fourteenth  amendment  did  not  introduce  a  factitious 
equality  without  regard  to  practical  difference,  that  are  best  met 

1  In  re  Grice  (No.  Dist.  of  s  Connolly  v.  Union  Sewer  Pipe 
Texas),  79  Fed.  627   (1897).                  Co.,   184  U.   S.   540    (1902),   46   L. 

2  National  Oil  Co.  v.  Texas,  197      Ed.  679. 
U.   S.  115,   49  L.   Ed.   689    (1905), 
affirming  72  S.  W.  C15. 


§    13]]       FEDERAL  CONTROL  OF  STATE  RAILROAD  REGULATIOX.  2U/ 

by  corresponding  differences  of  treatment.  The  use  of  fine  and 
imprisonment  was  likely  to  be  efficient  for  men,  while  the  latter 
was  impossible,  and  the  former  less  serious  to  corporations.^ 

The  Arkansas  Anti-Trust  Act  of  1905  was  also  held 
valid  as  to  foreign  corporations,  and  the  possible  invalidity 
of  the  act  as  to  individuals  did  not  make  the  provisions  invalid 
as  to  corporations,  and  no  contract  rights  of  domestic  cor- 
porations were  impaired  by  the  impo.sition  of  a  penalty  on  cor- 
porations doing  business  in  the  state  while  members  of  a  trust 
or  combination  to  control  prices,  where  the  legislature  was  em- 
powered to  repeal,  alter  or  amend  corporate  charters,  provided 
no  injiLstice  was  done  to  the  incorporators.  Neither  was  due  pro- 
cess of  law  denied  by  an  order  under  this  statute  directing  the 
production  of  books  and  papers  by  a  foreign  corporation,  nor 
by  striking  from  the  files  an  answer  of  a  foreign  corporation  on 
a  refusal  to  produce  such  books  and  papers,  nor  did  such  order 
amount  to  an  unreasonable  search  or  seizure.^ 

§  131  (103).  Classification   in   state   railroad   legislation. — 

Where  classification  is  reasonable,  that  is,  based  upou  legitimate 
considerations  of  public  policy,  it  is  valid,  as  legislation  must 
necessarily  be  specialized  in  its  adaption  to  the  subjects  of  legis- 
lation. The  question  is  thus  left  open  for  determination  in  every 
case  of  classification  for  legislation,  whether  the  discrimination  is 
natural  and  reasonable  or  arbitrary  and  oppressive,  and  there- 
fore a  denial  of  the  equal  protection  of  the  laws  guaranteed  by 
the  fourteenth  amendment.^ 

The  difficulty  of  determining  these  questions  of  classification 
was  illustrated  in  the  division  of  the  supreme  court  in  two  re- 
cent cases.     Tn  one  ■*  the  court  held  invalid  a  statute  of  Texas 

1  Standard  Oil  Co.  of  Ky.  v.  sociations  of  working  men  and  re- 
Tenn.,  217  U.  S.  413,  54  L.  Ed.  817  serving  to  them  all  their  rights 
(1910).  and    privileges    now    accorded    to 

2  Hammond  Packing  Co.  v.  them  by  law.  This  case  also  held 
Ark.,  212  U.  S.  322.  53  L.  Ed.  530  that  foreign  insurance  companies 
(1909),  affirming  81  Ark.  519,  doing  business  in  the  state  by  per- 

8  In    Niagara    Falls    Fire     Ins.  mission    were   entitled    to    invoke 

Co.     V.     Cornell,     110     Fed.     816  the  protection  of  the  federal  law 

(1901),   the   circuit   court   of   Ne-  and  challenge  the  validity  of  stat- 

braska  held  the  anti-trust  law  of  utes  which  affected  their  business 

that  state  void  on  account  of  its  equally  with  state  companies, 

exemption   of  assemblies   and   as-  <  Railroad   Co.  v.   Ellis,   165   U. 


2(18       feder.Uj  control  of  state  railroad  regulation,     [§  131 

which  required  railroad  companies  in  all  cases  of  claims  "under 
$50.00  to  pay  an  attorney 's  fee  not  exceeding  $10.00  to  the  party 
successfully  suing,  provided  the  suit  was  brought  thirty  days 
after  the  refusal  of  the  company  to  pay  the  claim.  The  court 
said  that  this  was  an  arbitrary  selection  which  could  not  be  justi- 
fied by  calling  it  classification.  In  the  other  case  ^  a  Kansas 
statute  providing  that  in  all  actions  brought  for  damages  caused 
by  fire  from  the  operation  of  the  railroad  the  court  should  allow 
the  plaintiff  on  recovery  a  reasonable  attorney's  fee,  which 
should  become  a  part  of  the  judgment,  was  sustained,  the  opinion 
of  the  court  being  rendered  by  the  same  judge,  Justice  Brewer, 
in  both  cases.  It  was  said  in  the  latter  case  that  while  the  prin- 
ciples of  separation  between  tlie  classes  were  not  difficult,  yet 
their  application  often  became  very  troublesome,  especially  when 
the  case  was  near  the  dividing  line.  "  It  is  easy  to  distinguish, ' ' 
said  the  court,  ''between  the  full  light  of  day  and  the  darkness 
of  midnight,  but  often  very  difficult  to  determine  w^hether  the 
given  moment  in  the  twilight  hour  is  before  or  after  that  in 
which  the  light  predominates  over  the  darkness." 

The  statute  of  Kansas  regulating  charges  in  public  stockyards, 
and  applying  only  to  one  corporation  and  not  to  other  companies 
or  corporations  engaged  in  like  business,  was  held  to  deny  the 
equal  protection  of  the  laws.- 

A  law  of  Texas  directed  solely  against  railroad  companies 
and  imposing  a  penalty  for  permitting  Johnson  grass  or  Russian 
thistle  upon  their  roadway  was  sustained,^  the  court  saying: 
"Great  constitutional  provisions  must  be  administered  with  cau- 
tion. Some  play  must  be  allowed  for  the  joints  of  the  machine, 
and  it  must  be  remembered  that  the  legislatures  are  the  ultimate 
guardians  of  the  liberties  of  the  people  in  quite  as  great  a  degree 
as  the  courts. ' ' 

A  law  of  Iowa  excepting  ''sales  by  jobbers  and  wholesalers  in 
doing  an  interstate  business  with  customers  outside  of  the  state" 

S   150   41  L  Ed   667  (1897),  three  s  Missouri,   Kansas   &  Texas   R. 

judges  dissenting.  Co.  v.  May,  194  U.  S.  267   (1904), 

lA.  T.  &  S.  R.  R.  Co.  V.  Mat-  48  L.  Ed.  971,  two  judges  dissent- 
thews',  174  U.  S.  96,  43  L.  Ed.  909  ing.  See  decisions  of  supreme 
(1899),  four  judges  dissenting.  court  of  United  States  on  Wiscon- 

zCot'ting  V.  Kansas  City  Stock-  sin  Anti-Trust  Law,  November  4, 

yards  Co.,  183  U.  S.  79,  46  L.  Ed.  1904,  195  U.  S.  194,  49  L.  Ed.  154. 
92    (1901). 


§    131]       FEDERAL  CONTROL  OF  STATE  RAILROAD  REGULATION.  209 

from  a  license  tax  imposed  upon  dealers  in  cigarettes  was  sus- 
tained/ the  court  saying  that  there  was  a  clear  distinction  in 
occupations  warranting  the  classification. 

The  modification  of  the  fcUow-iservant  rule  as  to  railway  em- 
ployes by  a  state  statute  does  not  violate  the  equal  protection 
of  the  law;  and  a  general  classification  of  railroad  employes 
as  subject  to  such  statute  is  a  proper  exorcise  of  the 
police  power  of  the  state.  Neither  does  a  statute  prohibiting 
drumming  and  soliciting  of  business  upon  railroad  trains  and 
premises  violate  the  equal  protection  of  the  laws,  though  it 
singles  out  certain  business  and  professions  for  which  soliciting 
of  patronage  is  prohibited.^ 

1  Cook   V.    County    of   Marshall,  elusion  of  railroads  less  than  fifty 

196  U.  S.  261,  49  L.  Ed.  471  (1905).  miles  in  length  from  a  statute  pre- 

*  Williams  v.  Arkansas,  217  U.  scribing   the  minimum   of   brake- 

S.  79,  54  L.  Ed.  673   (1910).     See  men  for  certain  freight  trains,  did 

also  Chicago,  R.  I.  &  Pac.  Ry.  Co.  not  deny  the  equal  protection  of 

V.  Arkansas,  supra,  where  the  ex-  the  laws,  affirming  86  Ark.  412. 

14 


PART  II. 


INTERSTATE  COMMERCE  ACT. 

Section  1. 

132.  Section  1  of  the  Act  of  1887. 

133.  Section  1  as  amended  by  Act  of  June  18,  1910. 

134.  Amendments  to  the  section. 

135.  All  of  interstate  commerce  not  included. 

136.  Parties  subject  to  the  act. 

137.  Common  carriers  under  the  act. 

138.  Express  companies  under  the  act. 

139.  Sleeping  car  companies. 

140.  Under  common  control,  management,  or  arrangement  for  a  con- 

tinuous carriage. 

141.  Transportation  through  a  state. 

142.  Territorial  transportation. 

143.  Interstate  electric  railroads. 

144.  Receivers,  lessees,  and  purchasers  pendente  lite. 

145.  Foreign  commerce. 

146.  Place  of  incorporation  of  carrier  immaterial. 

147.  The  intention  of  interstate  shipment  not  sufficient. 

148.  All  instrumentalities  of  shipment  or  carriage. 

149.  Delivery,  cartage,  storage,  and  demurrage  charges. 

150.  Commerce  court  on  terminal  facilities  and  plant  facilities. 

151.  Bulk  grain  storage  as  part  of  transportation. 

152.  The  amendments  of  section  as  to  accessory  charges. 

153.  Carriage  of  live  stock  and  perishable  property. 

154.  Refrigeration   in  transit. 

155.  Private  cars. 

156.  Prohibition  of  passes. 

157.  The  commodities  clause. 

158.  Switch  connections. 

159.  The  establishment  of  through  routes. 

160.  Classifications,  regulations,  and  practices. 

161.  Charges   must  be  reasonable   and   just. 

162.  Practical   difficulties   in   the   enforcement   of   reasonableness   In 

rates. 

163.  Standard  of  reasonableness  under  state  statutes. 

164.  Standard  of  reasonableness  under  the  act. 

165.  The  power  of  the  commission  in  fixing  rates. 


212  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    1 

166.  No  power  in  the  court"  to  fix  rates. 

167.  The  federal  courts  on  reasonableness  of  railroad  rates. 

168.  The  value  of  railroad  property  as  a  basis  for  rate. regulation. 

169.  The   unearned   increment  in   valuation  of   railroad  property  in 

rate  regulation. 

170.  The  relation  of  railroad  rate  to  investment  of  earnings  in  prop- 

erty. 

171.  Reasonableness  under  sections  1  and  3. 

172.  Consideration  of  reasonableness  in  the  courts. 

173.  Rulings  of  the  commission  upon  the  reasonableness  of  rates. 

174.  Limitation  of  the  commission's  power  in  fixing  rates. 

175.  Presumptions  of  reasonableness  from  established  rates. 

176.  Burden  of  proof. 

177.  Considerations  in  the  determination  of  reasonableness. 

178.  What  is  a  reasonable  rate. 

179.  Res  judicata  with  respect  to  rates. 

180.  Through  rates  and  local  rates. 

181.  Reasonableness  in  commutation  rates. 

182.  Relation  of  interstate  to  state  rates. 

183.  Rates  as  affected  by  development  of  country. 

184.  Commission  on  the  interdependence  of  rates. 

185.  The  commerce  court  on  interdependence  of  rates. 

186.  Reasonableness  of  rates  as  dependent  on  character  of  traffic. 

187.  Distance  as  a  factor  in  rates. 

188.  The  commission  on  comparison  of  rates. 

189.  Reasonableness  of  rates  as  relating  to  cost  of  service  and  needs 

of  the  shipper. 

190.  Reasonableness  and  proportion. 

191.  The  commission  on  rate  wars  and  reasonableness  of  rates. 

§  132  (104).  Section  1  of  the  Act  of  1887.— B^  it  p,nactcd  by 
the  Senaie  and  House  of  Representatives  of  the  United  States  of 
America  in  Congress  assemhled,  That  the  provisions  of  this  act 

[Carriers  and  transportation  subject  to  the  act.] 

shall  apply  to  any  common  carrier  or  carriers  engaged  in  the 
transportation  of  passengers  or  property  wholly  by  railroad,  or 
partly  by  railroad  and  partly  by  water  when  both  are  used, 
under  a  common  control,  management,  or  arrangement,  for  a 
continuous  carriage  or  shipment,  from  one  State  or  Territory  of 
the  United  States,  or  the  District  of  Columbia,  to  any  other 
State  or  Territory  of  the  United  States  to  an  adjacent  foreign 
country,  or  from  any  place  in  the  United  States  through  a  for- 
eign country  to  any  other  place  in  the  United  States,  and  also  to 
the  transportation  in  like  manner  of  property  shipped  from  any 
place  in  the  United  States  to  a  foreign  country  and  carried  from 
such  place  to  a  port  of  transshipment,  or  shipped  from  a  foreign 
country  to  any  place  in  the  United  States  and  carried  to  such 
place  from  a  port  of  entry  either  in  the  Ignited  States  or  an  ad- 
jacent foreign  country;  Provided,  liowever,  That  the  provision 


§    133]  THE   INTERSTATE   COMMERCE   ACT.  213 

[Aci  floes  not  nppJy  *»  transportation  wholly  within  one 
Htatc.l 

of  this  act  sliall  not  apply  to  the  transportation  of  passen^^'ers  or 
property,  or  to  the  receiving,  delivering,  storage,  or  handling  of 
property,  wholly  within  one  State,  and  not  shipped  to  or  from  a 
foreign  conntry  from  or  to  any  State  or  Territory  as  aforesaid. 

iWhat    the    terms    "rMllroad"    and    "trantjiiortation"    In- 
clude.] 

The  term  "railroad"'  as  used  in  this  act  shall  include  all 
bridges  and  ferries  used  or  operated  in  connection  with  any  rail- 
road, and  also  all  the  road  in  use  by  any  corporation  operating  a 
railroad,  whether  owned  or  operated  under  a  contract,  agree- 
ment, or  lease;  and  the  term  "transportation"  shall  include  all 
instrumentalities  of  shipment  or  carriage. 

[Charges  niust  be  reasonable  and  just.l 

All  charges  made  for  any  service  rendered  or  to  be  rendered 
in  the  transportation  of  passengers  or  property  as  aforesaid,  or 
in  connection  therewith,  or  for  the  receiving,  delivering,  storage, 
or  handling  of  such  property,  shall  be  reasonable  and  just ;  and 
every  unjust  and  unreasonable  charge  for  such  service  is  pro- 
hibited and  declared  to  be  unlawful. 

§  133.  Section  1  as  amended  and  in  force  (1911). — Section  1. 
(As  amended  June  29,  J906,  April  13,  1903.  and  June  18,  1901.) 
That  the  provisions  of  this  Act  shall  apply  to  any  corporation  or 
any  person  or  persons  engaged  in  the  transportation  of  oil  or 
other  commodity  except  water  and  except  natural  or  artificial 
gas,  by  means  of  pipe  lines,  or  partly  by  pipe  lines  and  partly 
by  railroad,  or  partly  by  pipe  lines  and  partly  by  water,  and  to 

[Carriers,     telegraph,     telephone,    and     cable    companies, 
and  transportation   subject  to  the  act.] 

telegraph,  telephone,  and  cable  companies  {whether  wire  or  wire- 
less) "engaged  in  sending  messages  from  one  State,  Territory,  or 
District  of  the  United  States,  or  to  any  other  State,  Territory,  or 
District  of  the  United  States,  or  to  any  foreign  country,  who 
shall  be  considered  and  held  to  be  common  carriers  within  the 
meaning  and  purpose  of  this  Act,  and  to  any  common  carrier  or 
carriers  engaged  in  the  transportation  of  passengers  or  property 
wholly  by  railroad  (or  partly  by  railroad  and  partly  by  water 
when' both  are  used  under  a  common  control,  management,  or 
arrangement  for  a  continuous  carriage  or  shipment),  from  one 
State  or  Territory  of  the  United  States  or  the  District  of  Colum- 
bia, to  any  other  State  or  Territory  of  the  United  States  or  the 
District  of  Columbia,  or  from  one  place  in  a  Territory  to  an- 
other place  in  the  same  Territory,  or  from  any  place  m  the 
United  States  to  an  adjacent  foreign  country,  or  from  any  place 
in  the  United  States  through  a  foreign  countiy  to  any  other  place 
in  the  United  States,  and  also  to  the  transportation  in  like  man- 
ner of  property  shipped  from  any  place  in  the  United  States  to 
a  foreign  countiy  and  carried  from  such  place  to  a  port  of  trans- 
shipment, or  shipped  from  a  foreign  country  to  any  place  in  the 


21-4  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    1 

United  States  and  carried  to  such  place  from  a  port  of  entry 
either  in  the  United  States  or  an  adjacent  foreign  country:  Pro- 

[Act  does  not  apply  to  trniisportation  or  to  transmission 
of    messages    T*holly    v\ltliin    one    state] 

vided,  however,  That  the  provisions  of  this  Act  shall  not  apply 
to  the  transportation  of  passengers  or  property,  or  to  the  re- 
ceiving, delivering,  storage,  or  handling  of  property  wholly 
within  one  State  and  not  shipped  to  or  from  a  foreign  country 
from  or  to  any  State  or  Territory  as  aforesaid,  no7'  shall  they 
apply  to  the  transmission  of  messages  by  telephone,  telegraph, 
or  cable  ivholly  u'ithin  one  State  aoul  not  transmitted  to  or  from 
a  foreign  country  from  or  to  any  SU''e  or  Territory  as  aforesaid. 

[Express     companies     and     sleeping     car     companies     in- 
cluded.] 
UWhat  the  term  "railroad"  includes.] 

The  term  ' '  common  carrier ' '  as  used  in  this  Act  shall  include 
express  companies  and  sleeping  car  companies.  The  term  "rail- 
road" as  used  in  this  Act  shall  include  all  bridges  and  ferries 
used  or  operated  in  connection  with  any  railroad,  and  also  all  the 
road  in  use  by  any  corporation  operating  a  railroad,  whether 
owned  or  operated  under  a  contract,  agreement,  or  lease,  and 
shall  also  include  all  switches,  spurs,  tracks,  and  terminal  facili- 
ties of  every  land  used  or  necessary  in  the  transportation  of  the 
persons  or  property  designated  herein,  and  also  all  freight 
depots,  yards,  and  grounds  used  or  necessary  in  the  transporta- 

[WTiat   the  term  "transportation"  includes.] 

tion  or  delivery  of  any  of  said  property;  and  the  term  ''trans- 
portation" shall  include  cars  and  other  vehicles  and  all  instru- 
mentalities and  facilities  of  shipment  or  carriage,  irrespective  of 
ownership  or  of  any  contract,  express  or  implied,  for  the  use 
thereof  and  all  services  in  connection  with  the  receipt,  delivery, 
elevation,  and  transfer  in  transit,  ventilation,  refrigeration  or 
icing,  storage,  and  handling  of  property  transported ;  and  it  shall 

[Duty   o£   carrier.] 

be  the  duty  of  every  carrier  subject  to  the  provisions  of  this  Act 
to  provide  and  furnish  such  transportation  upon  reasonable  re- 
quest therefor,  and  to  establish  through  routes  and  just  and  rea- 
sonable rates  applicable  thereto,  a7id  to  provide  reasonable  facili- 
ties for  operating  such  through  routes  and  to  mnke  reasonable 
rides  and  regulations  with  respect  to  the  exchange,  interchange, 
and  return  of  cars  used  therein,  and  for  the  operation  of  such 
through  routes,  and  pi^oviding  for  reasonable  compensation  to 
those  entitled  thereto. 

[Charges   must  be   just   and   reasonable.] 

All  charges  made  for  any  service  rendered  or  to  be  rendered 
in  the  transportation  of  passengers  or  property  and  for  the  trans- 
mission of  messages  by  telegraph,  telephone,  or  cable,  as  afore- 
said, or  in  connection  therewith,  shall  be  just  and  reasonable; 
and  every  unjust  and  unreasonable  charge  for  such  service  or 


§    133]  THE  INTERSTATE   COMMERCE   ACT.  215 

any  part  thereof  is  prohibited  and  declared  to  be  unlawful: 
Provided,  That  messages  by  telegraph,  telcplwne,  or  cable,  sub- 
ject to  the  provisions  of  this  Act,  may  be  classified  into  day, 
night,  repeated,  unrepeated,  letter,  commercial,  press,  Govern- 
ment, and  such  other  classes  as  are  just  and  reasonable,  and  dif- 
ferent rates  may  be  charged  for  the  different  classes  of  messages: 

[Excliauge    of    wervlces.] 

And  provided  further,  Tlia.t  nothing  in  this  Act  sJiall  he  con-t 
sirned  to  prevent  telephone,  telegraph,  and  cable  companies  from 
entering  into  contracts  xvith  common  carriers,  for  the  exchange 
of  services. 

[Further   duty  of   carrier."] 

And  it  is  hereby  made  the  duty  of  all  common  carriers  subject 
to  the  provisions  of  this  Act  to  establish,  observe,  and  enforce 
just  and  reasonable  classifications  of  property  for  transporta- 
tion, iviih  reference  to  ivliich  rates,  tariffs,  regulations,  or  prac- 
tices are  or  may  be  made  or  prescribed,  and  just  and  reasonable 
regulations  and  practices  affecting  classifications,  rates,  or  tar- 
iffs,  the  issiiance,  form,  and  substance  of  tickets,  receipts,  and 
hills  of  lading,  the  manner  and  method  of  presenting,  marking, 
packing,  and  delivering  property  for  transportation,  the  facili- 
ties for  transportation,  the  carrying  of  personal,  sample,  and  ex- 
cess baggage,  and  all  other  matters  relating  to  or  connected  with 
the  receiving,  handling,  transporting,  storing,  and  delivery  of 
property  subject  to  the  provisions  of  this  Act  which  maij  be  nec- 
essary or  proper  to  secure  the  safe  and  prompt  receipt,  handling 
transportation,  and  delivery  of  property  subject  to  the  provisions 
of  this  Act  upon  just  end  reasonable  terms,  and  every  such  un- 
just and  unreasonable  classification,  regulation,  and  practice 
ivith  reference  to  commerce  between  the  States  and  luith  foreign 
countries  is  prohibited  and  declared  to  be  unlawful. 

[Free  passes   and  free  transportation   prohibited.] 

No  common  carrier  subject  to  the  provisions  of  this  Act  shall, 
after  January  first,  nineteen  hundred  and  seven,  directly  or  indi- 
rectly, issue  or  give  any  interstate  free  ticket,  free  pass,  or  free 

[Fxcer'ed  classes.] 

transportation  for  passengers,  except  to  its  employees  and  their 
families,  its  officers,  agents,  surgeons,  physicians,  and  attorneys 
at  \siW,  to  ministers  of  religion,  traveling  secretaries  of  railroad 
Young  Men's  Christian  Associations,  inmates  of  hospitals  and 
charitable  and  eleemosynary  institutions,  and  persons  exclusively 
engaged  in  charitable  and  eleemosynary  work;  to  indigent,  des- 
titute, and  homeless  persons,  and  to  such  persons  when  trans- 
ported by  charitable  societies  or  hospitals,  and  the  necessary 
agents  employed  in  such  transportation;  to  inmates  of  the  Na- 
tional Homes*^  or  State  Homes  for  Disabled  Volunteer  Soldiers, 
and  of  Soldiers'  and  Sailors'  Homes,  including  those  about  to 
enter  and  those  returning  home  after  discharge;  to  necessary 


216  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    1 

care  takers  of  live  stock,  poultry,  milk,  and  fruit;  to  employees 
on  sleeping-  cars,  express  cars,  and  to  linemen  of  telegraph  and 
telephone  companies;  to  Railway  Mail  Service  employees,  post- 
office  inspectors,  customs  inspectors,  and  immigration  inspectors ; 
to  newsboys  on  trains,  baggage  agents,  witnesses  attending  any 
legal  investigation  in  which  the  common  carrier  is  interested, 
persons  injured  in  wrecks  and  physicians  and  nurses  attending 

[InterchanKC  of  authorized  passes  and  franks.] 

such  persons:  Provided,  That  this  provision  shall  not  be  con- 
strued to  prohibit  the  interchange  of  passes  for  the  officers, 
agents,  and  employees  of  common  carriers,  and  their  families; 
nor  to  prohibit  any  common  carrier  from  carrying  passengers 
free  with  the  object  of  providing  relief  in  cases  of  general  epi- 
demic, pestilence,  or  other  calamitous  visitation :  A7id  pi^ovided 
further,  That  this  provision  shall  not  he  construed  to  prohibit 
the  privilege  of  passes  or  franks,  or  the  exchange  thereof  with' 
each  other,  for  the  officers,  agents,  employees,  and  their  families 
of  svA^h  telegraph,  telephone  and  cable  lines,  and  the  officers^ 
agents,  em.ployees  and  their  fa^nilies  of  other  common  carriers 
subject  to  the  provisions  of  this  Act:  Provided  further,  That  the 

[Amendment  of  April   IS,   lOOS,   and   June   IS,   1910.] 
[Extension  of  meaning  of  term  "employees"   and  "fami- 
lies."] 

term  ''employees"  as  used  in  this  paragraph  shall  include  fur- 
loughed,  pensioned,  and  superannuated  employees,  persons  who 
have  become  disabled  or  infirm  in  the  service  of  any  such  com- 
mon carrier,  and  the  remains  of  a  person  killed  in  the  employ- 
ment of  a  carrier,  and  ex-employees  traveling  for  the  purpose 
of  entering  the  service  of  any  such  common  carrier;  and  the 
term  "families"  as  used  in  this  paragraph  shall  include  the 
families  of  those  persons  named  in  this  proviso,  also  the  families 
of  persons  killed,  and  the  widows  during  widoivhood  and  minor 
children  during  minority  of  persons  who  died,  while  in  the  serv- 
ice of  any  such  common  carrier.     Any  common  carrier  violat- 

[Jurisdiction  and  penalty  for  violation.! 

ing  this  provision  shall  be  deemed  guilty  of  a  misdeameanor,  and 
for  each  offense,  on  conviction,  shall  pay  to  the  United  States  a 
penalty  of  not  less  than  one  hundred  dollars  nor  more  than  two 
thousand  dollars,  and  any  person,  other  than  the  persons  ex- 
cepted in  the  provision,  who  uses  any  such  interstate  free  ticket, 
free  pass,  or  free  transportation  shall  be  subject  to  a  like  penalty. 
Jurisdiction  of  offenses  under  this  provision  shall  be  the  same  as 
that  provided  for  offenses  in  an  Act  entitled  "An  Act  to  further 
regulate  commerce  with  foreign  nations  and  among  the  States," 
approved  February  nineteenth,  nineteen  hundred  and  three,  and 
any  amendment  thereof. 

From  and  after  May  first,  nineteen  hundred  and  eight,  it 
shall  be  unlawful  for  any  railroad  company  to  transport  from 


§    134]  TUE   INTERSTATE    COMMERCE   ACT.  217 

[Rnilrnnd  coni|innloM  proliiliHod  from  tranxpordncr  com- 
iiio<lili<'M  in  whleli  (Im-v  «re  iiitercNted.  Timlior  and 
Itrodut'lN    llHTCot   e-vcc'iited.] 

any  State,  Territory,  or  the  District  of  Columbia,  to  any  other 
State,  Territory,  or  the  District  of  Columbia,  or  to  any  foreign 
country,  any  article  or  commodity,  other  than  timber  and  the 
manufactured  products  thereof,  manufactured,  mined,  or  pro- 
duced by  it,  or  under  its  authorfty.  or  whirji  it  may  own  in  whole 
or  in  part,  or  in  wliicli  it  may  liave  any  interest,  direct  or  in- 
direct, except  such  articles  or  coiiuiiodities  as  may  be  necessary 
and  intended  for  its  use  in  the  conduct  of  its  business  as  a  com- 
mon carrier. 

Any  common  carrier  siibject  to  the  provisions  of  this  Act,  upon 
application  of  any  lateral,  branch  line  of  railroad,  or  of  any 
shipper  tendering  intei-stale  traffic  for  transportation,  shall  con- 

[ST\'Itch   conuections.] 

struct,  maintain,  and  operate  upon  reasonable  terms  a  switch 
connection  with  any  such  lateral,  branch  line  of  railroad,  or 
private  side  track  which  may  be  construced  to  connect  with  its 
railroad,  where  such  connection  is  reasonably  practicable  and 
can  be  put  in  with  safety  and  will  furnish  sufficient  business  to 
justify  the  construction  and  maintenance  of  the  same ;  and  shall 
furnish  ears  for  the  movement  of  such  traffic  to  the  best  of  its 
ability  without  discrimination  in  favor  of  or  against  any  such 

[STilteh  connections  niny  be  ordered  by  the  commis- 
sion.] 

shipper.  If  any  common  carrier  shall  fail  to  install  and  operate 
any  such  switch  or  connection  as  aforesaid  on  application  there- 
for in  writing  by  any  shipper  or  oivner  of  such  lateral,  branch 
line  of  railroad,  such  shipper  or  owner  of  such  lateral,  hranch 
line  of  railroad  may  make  complaint  to  the  Commission,  as  pro- 
vided in  section  thirteen  of  this  Act,  and  the  Commission  shall 
hear  and  investigate  the  same  and  shall  determine  as  to  the 
safety  and  praticability  thereof  and  justification  and  reasonable 
compensation  therefor,  and  the  Commission  may  make  an  order, 
as  provided  in  section  fifteen  of  this  Act,  directing  the  common 
carrier  to  comply  with  the  provisions  of  this  section  in  accord- 
ance with  such  order,  and  such  order  shall  be  enforced  as  here- 
inafter provided  for  the  enforcement  of  all  other  orders  by  the 
Commission,  other  than  orders  for  the  payment  of  money. 

§  134.  Amendments  to  the  section. — For  convenience  of  ref- 
erence section  1  is  given  above  as  it  appeared  in  the  original  act 
of  1887  and  as  amended  June  18,  1910.  No  change  was  made  in 
this  section,  as  first  enacted,  until  the  passage  of  the  Hepbui*n 
act  in  1906,  the.  text  of  which  can  be  followed  substantially  by 
reading  the  roman  type  of  the  print  of  the  act  of  1910  as  above 
given.  The  amendment  of  11908  with  respect  to  passes  is  noted 
in  the  margin  and  the  additions  of  1910  are  printed  in  italics. 


218  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    1 

It  will  be  seen  that  the  scope  of  the  act  was  greatly  enlarged 
in  3906  and  further  materially  extended  in  1910.  From  1887 
to  1906  the  purview  of  the  act  was  limited  to  connnerce  between 
the  states  in  wliich  rail  carriers  participated  in  the  through 
transportation.  By  the  Plepburn  act  of  1906  oil  pipe-lines,  ex- 
press companies  and  sleeping  car  companies  were  brought  within 
its  scope;  the  terms  "railroad"  and  ''transportation"  were 
more  elaborately  defined;  the  obligation  to  establish  through 
routes  imposed;  a  specific  prohibition  of  free  passes  was  de- 
clared, provision  being  made  for  certain  exceptions  therefrom; 
the  "commodities  clause"  inserted;  and,  under  certain  condi- 
tions, switch-connections  made  imperative.  The  act  of  1910, 
coimnonly  called  the  ]Mann-Elldns  act,  added  telegraph,  tele- 
phone and  cable  companies  to  those  subject  to  this  regulation, 
making  the  necessary  changes  in  the  succeeding  portions  of  the 
section.  There  is  a  striking  addition  also  in  the  inclusion,  among 
matters  subject  to  the  jurisdiction  of  the  commission,  of  classi- 
fications, regulations  and  practices  of  the  carriers  with  respect 
to  various  forms  of  transportation  and  of  the  evidences  of  con- 
tracts haAdng  relation  thereto. 

§  135  (105).  All  of  interstate  commerce  not  included. — As 

defined  in  this  section  all  carriers  engaged  in  interstate  com- 
merce are  not  subject  to  the  act;  nor  is  all  "transportation,"  or 
"transmission,"  between  the  states  included.  Clearly  the  in- 
tention of  the  act  is  to  regulate  all  carriers  engaged  in  the  trans- 
portation of  passengers  or  property  by  railroad,  or  by  rail  and 
water  when  said  rail  and  water  transportation  is  under  a  common 
control,  management,  or  arrangement  for  a  continuous  carriage. 
The  amendment  of  1906  subjects  pipe  lines  transporting  "oil  or 
other  commodity"  to  regulation;  but  the  inclusion  of  "express 
companies  and  sleeping  car  companies"  in  the  term  common  car- 
rier and  the  further  elaboration  of  the  definition  of  the  term 
"transportation"  merely  show  the  determination  of  congress  to 
embrace  all  transportation  by  rail  between  the  states.  This  sec- 
tion as  it  now  stands,  shows  the  growing  purpose  of  the  act  to  be 
federal  regiilation  of  all  means  of  interstate  commerce  that  by 
nature  are  subject  to  monoply  or  combination. 

Interstate  transportation  wholly  by  water  is  not  included  nor 
is  that  moving  by  team  or  wagon.  7  I.  C.  C.  Eep.  286.  Congress 
had  repeatedly  legislated  with  respect  to  water  transportation. 


§    135]  THE   INTERSTATE    COMMERCE   ACT.  219 

but  in  tliis  enactinent  its  atteiilion  was  clircftcd  mainly  to  tlie 
abuses  in  railroad  transportation.  The  pooling  of  traffic  by- 
water  carriers  is  a  matter  over  which  the  commission  has  no 
jurisdiction  (13  I.  C.  C.  Rep.  206)  ;  and  an  oocan  carrier  estab- 
lished under  the  laws  of  Cuba  and  transporting  traffic  between 
Havana  and  Galveston,  is  not  subject  to  the  act.  13  I.  C.  C.  Rep. 
310,  Carriers  of  interstate  commerce  by  water  are  subject  to 
the  act  to  regulate  commerce  only  in  respect  to  traffic  trans- 
ported under  a  common  control,  management  or  arrangement 
with  the  rail  carrier  for  a  continuous  carriage  or  shipment ;  and 
in  respect  to  traffic  not  so  transported  they  are  exempt  from  its 
provisions.    15  I.  C.  C.  Rep.  205  and  21  I.  C.  C.  Rep.  207. 

This  limitation  of  the  scope  of  the  act  extends  to  the  power  of 
the  commission  in  requiring  reports.    See  inft^a,  sees.  15  and  20  of 

act.    It  was  held  by  the  commerce  court  (Oct.  5,  1911)  

Fed. ,  in  the  cases  of  the  Goodrich  Transit  Company  and 

other  companies  operating  steamers  in  the  Great  Lakes  from 
Chicago,  that  the  commission  had  authority  to  require  reports 
with  respect  to  their  interstate  business  in  connection  with  rail- 
roads, but  that  it  had  no  authority  to  call  for  reports  of  their 
transactions  relating  exclusively  to  "port-to-port"  interstate 
business  or  to  intrastate  traffic  or  affairs. 

A  steamboat  on  a  navigable  river  can  only  demand  of  a  rail- 
road connecting  with  river  points  that  it  receive  and  deliver 
freight  at  the  published  locate  rates,  as  an  independent  water 
line  is  not  included  in  the  act.  4  I.  C.  C.  Rep.  265,  3  I.  C.  Rep. 
278.  A  carrier  by  water,  which  has  not  joined  in  a  traffic  and  di- 
vision sheet  filed  and  published  by  connecting  railroad  carriers 
between  two  points,  does  not  become  a  party  to  a  common  ar- 
rangement for  the  carriage  of  such  a  shipment.  ^Mutual  Transit 
V.  U.  S.,  C.  C.  A.  second  circuit,  1910,  178  Fed.  6Qi.  Under  the 
amendment  of  1906  the  commission  is  empowered  to  establish 
a  through  rate  Avhen  one  of  the  connecting  carriers  is  a  water 
line.    See  section  15,  infra. 

The  decisions  of  the  courts  on  this  question  have  been  in  ac- 
cord with  the  rulings  of  the  commission.  A  railroad  lying 
wholly  within  the  state  which  transports  freight,  whether  com- 
ing from  within  or  without  the  state,  solely  on  local  bills  of 
lading  on  a  special  contract  limited  to  its  own  lines,  and  without 
dividing  charges  with  any  other  carriers  or  assuming  any  obli- 


220  THE    INTERSTATE    COMMERCE    ACT.  [SECTION   1 

gations  to  or  for  tliem,  does  not  come  within  the  provisions  of 
the  act,  and  is  not  bound  to  make  any  reports  of  its  business  to 
the  commission.  United  States  v.  Eailroad  Co.,  81  Fed.  783 
(1897),  following.  C.  N.  0.  &  T.  P.  R.  Co.  v.  Commission,  162  U. 
S.  184,  40  L.  Ed.  935  (1896),  and  Commission  v.  B.  Z.  &  C.  R.  Co.. 
77  Fed.  942  (1897).  See  also  U.  S.  v.  Geddes  (6th  Cir.  C.  C.  A.) 
131  Fed.  452  (1904),  where  the  same  ruling  was  made  as  to  rail- 
roads subject  to  the  Safety  Act. 

§  136  (106).  Parties  subject  to  the  act. — Before  the  amend- 
ments of  1906,  enlarging  the  scope  of  the  act,  it  had  been  held 
that  the  jurisdiction  of  the  commission  only  extended  to  the 
common  carriers  described  in  the  section.  Section  2  of  the  act 
of  February  19,  1903,  infra,  §  422,  specifically  provided 
that  in  any  proceeding  instituted  before  the  commission  or  in 
the  courts  it  should  be  lawful  to  include  as  parties  in  addition  to 
the  carrier  all  who  are  interested  in  or  affected  by  the  rule,  regu- 
lation, or  practice  under  consideration.  This  is  the  warrant  for 
the  occasional  inclusion  among  parties  defendant  in  proceedings 
before  the  commission  of  natural  persons  acting  as  agents  of  the 
various  carriers  in  the  publication  of  rates. 

The  application  of  the  provisions  of  the  act  to  pipe  lines  was 
made  by  the  amendment  of  1906.  Owners  of  pipe  lines  had  been 
held  to  be  common  carriers  when  doing  business  for  the  public 
as  such.  Griffin  v.  Pipe  Lines,  172  Pa.  580.  As  the  act  now 
stands  some  of  its  provisions  are  made  specifically  applicable  to 
railroads  and  others  are  clearly  intended  for  railroads  only.  As 
to  the  owners  of  pipe  lines  who  are  not  common  carriers,  and 
who  use  their  pipe  lines  solely  for  the  transportation  of  their 
own  products,  it  would  seem  that  they  are  not  included  in  the 
act.  Shipments  from  one  place  to  another  in  the  same  territory 
Avere  first  included  by  the  amendment  of  1906.  This  extension 
of  the  scope  of  the  act  follows  the  precedent  made  in  the  Anti- 
Trust  Act,  infra,  §  464. 

§  137.  Common  carriers  under  the  act. — This  act  limits  its 
application  with  respect  to  transportation  by  rail  of  persons  and 
projieity  to  carriers  by  rail  or  partly  by  rail  and  partly  by 
water,  which  are  "common  carriers."  The  act  does  not  define 
what  will  necessarily  constitute  a  person  or  a  corporation  a  com- 
mon carrier,  nor  does  it  empower  the  commission  to  lay  down 


§    137]  THE   INTERSTATE    COMMERCE   ACT.  221 

the  tests.  It  follows  that  the  expression  "common  carriers" 
used  by  congress  means  those  carriers  which  arc  common  car- 
riers at  common  law,  and  which  have  complied  with  such  require- 
ments as  may  have  been  imposed  by  constitutional  or  legislative 
authority. 

This  principle  was  declared  and  applied  by  the  commission  in 
the  ease  of  iManufacturers  Railway  of  St.  Louis,  21  I.  C.  C.  R. 
304.  It  was  claimed  that  this  company  w^as  not  in  fact  a  com- 
mon carrier  but  a  plant  facility  of  a  brewing  association  which 
latter  owned  the  stock,  and  a  very  large  proportion  of  the  busi- 
ness of  the  railway  company  was  that  of  the  brewing  associa- 
tion, and  the  rtaffic  of  the  latter  constituted  one-thirtieth  of  the 
total  traiific  of  the  city  of  St.  Louis.  The  case  was  presented  on 
the  application  of  the  company  that  through  routes  be  estab- 
lished to  and  from  points  on  its  lines  in  St.  Louis  and  from  and 
to  points  on  its  lines  of  each  of  the  defendants  railway  company 
and  points  beyond,  also  for  the  fixing  of  reasonable  divisions  or 
absorptions  out  of  the  St.  Louis  rates  to  be  paid  to  the  manu- 
facturer's railway  for  terminal  services  rendered  by  it.  The 
company  operated  about  twenty  miles  of  track  of  which  two  and 
one-half  miles  were  claimed  as  main  track  and  the  remainder  as 
side  tracks,  switches  and  yard  tracks.  Of  the  total  twenty  miles 
six  miles  were  lines  from  the  brewing  association  and  used  in 
part  both  for  the  services  of  tlie  brewery  and  the  public.  It 
owned  and  operated  four  locomotives,  and  no  passenger  business 
or  less  than  car  load  business  originated  on  its  lines.  Out  of  the 
total  of  some  42,000  cars  handled  in  the  yard  some  5,000  were 
handled  by  other  industries  or  patrons  and  all  of  the  remainder 
for  the  brewery  association.  It  claimed,  and  the  commission 
found  that  it  was  performing  a  business  of  a  common  carrier  for 
the  public,  and  the  commission  said  that  it  "svas  not  witliin  its 
authority  to  pronounce  any  carrier  by  rail  not  to  be  in  fact  or  in 
law  a  common  carrier,  if  it  would  have  been  held  as  such  at  com- 
mon law.  It  was  therefore  ruled  that  the  company  w^as  within 
the  provision  of  the  first  section  of  the  act,  and  that  the  payment 
to  it  of  a  reasonable  and  just  proportion  of  the  St.  Louis  rate 
for  terminal  services  was  not  unlawful. 

"While  the  company  was  doing  business  as  a  common  carrier 
it  was  also  a  plant  facility.  There  was  nothing  in  the  act  how- 
ever or  in  any  of  its  amendments,  which  affected  the  right  of 


222  THE    INTERSTATE    COMMERCE    ACT.  [SECTION   1 

ownersliip  of  a  railroad  by  a  shipper  or  shippers  over  the  lines. 
That  fact,  however,  did  have  a  bearing  on  the  determination  of 
the  amount  of  allowance  of  services  under  the  principles  de- 
clared by  the  commission  in  the  investigation  of  ''tap  lines"  and 
industrial  lines  (see  infra,  §  212)  and  the  duty  and  responsibil- 
ity, therefore,  involved  upon  the  carriers  to  guard  closely 
these  features  so  as  not  to  make  themselves  liable  under  the 
statute  for  unjust  discrimination  or  undue  preference  or  ad- 
vantages. 

§  138  (107).  Express  companies  under  the  act. — Express 
companies  were  not  included  in  the  act  prior  to  the  amendment 
of  1906.  U.  S.  V.  IMoreman,  42  Fed.  488  (1890)  ;  Southern  Indi- 
ana Express  Co.,  31  C.  C.  A.  172,  92  Fed.  1022  (1899)  affirming 
88  Fed.-  659. 

Before  the  passage  of  the  Interstate  Commerce  Act  of  1886, 
the  supreme  court  in  the  Express  Company  Cases,  lil7  U.  S.  1, 
29  L.  Ed.  791  (1886),  had  decided  that  railroad  companies  were 
not  required  by  usage  or  the  common  law  to  transport  express 
traffic  for  the  independent  companies  over  their  lines,  and  that 
they  were  not  obliged  to  do  more  as  express  carriers  than  to  pro- 
vide the  public  at  large  with  reasonable  accommodations,  and  in 
the  absence  of  a  statute  they  were  not  obliged  to  furnish  equal 
facilities  to  all  express  companies. 

The  commission  has  considered,  in  several  cases,  the  regulation 
of  express  companies  under  the  act.  Thus,  it  is  ruled  that  while 
express  companies  must  serve  their  patrons  under  similar  con- 
ditions without  discrimination  (12  I.  C.  C.  R.  196,  and  15  I.  C. 
C.  R.  15),  it  is  also  held  (13  I.  C.  C.  R.  475),  that  the  main  ob- 
ject of  an  express  service  is  expedition ;  and  express  rates  should 
not  be  so  low  as  to  attract  business  which  might  properly  go  by 
freight,  and  thereby  congest  and  interfere  with  the  service  by 
express,  and  that  the  fact  that  express  rates  in  and  out  of  a  par- 
ticular business  locality  are  higher  than  those  in  and  out  of  a 
competing  locality  from  a  common  source  of  supply  is  not  of  the 
same  importance  as  in  the  case  of  freight  rates,  since  the  whole- 
saler ordinarily  brings  his  merchandise  in  by  freight  and  dis- 
tributes it  by  freight;  and  that  a  comparison  of  express  rates 
in  one  locality  with  those  in  another  is  of  much  greater  value 
than  a  similar  comparison  between  freight  rates  since  the  char- 
acter of  the  business  and  the  conditions  under  which  it  is  trans- 


§    139 J  THE   INTERSTATE    COMMEKCE   ACT.  223 

acted  are  more  nearly  the  same.  As  to  tlie  conditions  under 
which  Pacific  rates  were  fovind  iin reasonable,  see  16  I.  C.  C.  R 
32. 

It  is  also  ruled  that  the  rates  made  by  express  companies  upon 
small  packages  in  competition  witli  the  United  States  mail  are 
not  to  be  taken  as  standards  by  which  to  determine  the  reason- 
ableness of  their  rates  upon  larger  packages.  13  I.  C.  C.  R.  475, 
16  I.  C.  C.  R.  32.  The  relation  of  the  express  companies  to  the 
railroads  in  the  matter  of  free  transportation  to  their  men  and 
material,  Avas  discussed  in  16  I,  C.  C.  R.  246,  and  it  was  decided 
in  American  Express  Company  v.  U.  S.,  212  U.  S.  522,  53  L.  Ed. 
635  (J908),  affirming  161  Fed.  606,  that  the  express  companies 
are  prohibited  from  giving  free  transportation  of  personal  bag- 
gage to  their  officers  and  employes  and  members  of  their  fam- 
ilies, and  to  the  officers  of  other  transportation  companies  and 
members  of  their  families  in  exchange  for  passes  issued  by  the 
latter  to  the  officers  of  the  express  companies,  by  the  Elkins  Act 
of  1903  and  by  the  Hepburn  Act  of  1906,  which  forbid  all  trans- 
portation of  property  at  less  than  the  published  rates ;  and  that 
the  proviso  to  the  Hepburn  Act  relates  solely  to  the  carriage  of 
pas-j^ngers  and  does  not  embrace  free  transportation  by  express 
companies,  although  by  the  terms  of  the  act  express  companies 
are  deemed  common  carriers. 

In  cases  concerning  express  companies  the  commission  has  ap- 
plied the  same  rule  which  is  enforced  in  the  case  of  other  car- 
riers. Thus,  it  was  ruled  in  15  I.  C.  C.  R.  53,  that  it  had  no  juris- 
diction over  claims  for  damages  for  delaj'-  in  express  shipments, 
as  the  obligation  to  deliver  promptly  and  safely  was  enforced  by 
common  law  and  not  by  the  Interstate  Commerce  Act.  In  17  I. 
C.  C.  R.  115,  certain  express  rates  from  New  York  city  to  Boise 
City,  Idaho,  were  held  unreasonable;  and  it  was  ruled  that  ex- 
press companies  as  other  carriers  could  not  lawfully  make  a  dif- 
ference in  rate  based  upon  the  time  of  the  payment  of  the 
charges,  and  that  it  was  a  general  principle  that  a  through  rate 
should  not  exceed  the  lowest  combination  of  locals  between  the 
same  points.    16  I.  C.  C.  Rep.  394. 

§  139.  Sleeping  car  companies. — These  companies  were  in- 
cluded in  the  act  with  express  companies  in  the  amendment  of 
1906.  It  was  ruled,  in  16  I.  C.  C.  Rep.  410,  that  the  Pullman  com- 
pany operating  sleeping  cars  at  the  joint  expense  of  itself  and 


224  THE   INTERSTATE    COMMERCE    ACT.  [SECTION   1 

the  railroad  company  interested  was  a  common  carrier,  subject 
to  the  jurisdiction  of  the  commission;  that  it  was  required  to 
publish  its  rates  and  the  regulations  governing  the  application  of 
such  rates;  and  that  these,  when  published,  were  subject  to  the 
consideration  and  correction  of  the  commission.  In  this  case  the 
passenger  offered  a  local  ticket  to  an  intermediate  point  and  a 
mileage  book  beyond  for  transportation  to  his  destination ;  there- 
upon t)ie  Pullman  agent  refused  to  sell  sleeping-car  accommoda- 
tions on  the  ground  that  the  tariff  prohibited  selling  such  ac- 
conunodations  except  upon  a  through  ticket,  the  price  of  which 
in  this  case  was  greater  than  the  combination  of  the  locals.  The 
commission  ruled  that  the  Pullman  company  was  within  its  rights 
and  (Jfeclined  relief,  but  ^t  the  same  time  condemned  such  con- 
ditions, saying  it  was  the  almost  invariable  rule  of  the  commis- 
sion that  the  through  rate  should  not  exceed  the  combination  of 
the  locals. 

In  18  I.  C.  C.  Rep.  135,  March,  1910,  the  commission  considered 
the  reasonableness  of  the  rates  for  sleeping  cars  and  reduced  the 
price  of  the  upper  berth  fi'om  St.  Paul  to  Chicago  to  $1.50  as 
compared  with  $2.00  for  the  lower  berth;  while  the  lower  berth 
from  St.  Paul  to  Seattle  was  reduced  from  $12.00  to  $10.00 ;  the 
upper  to  $8.50.  Two  of  the  commissioners  dissented  on  the 
ground  that  existing  passenger  rates  were  in  favor  of  the  oc- 
cupant of  the  sleeping  car,  and  that  the  existing  discrimination 
was  really  against  the  day-coach  passenger  who  did  not  enjoy  the 
sleeping-car  privileges.  This  order  of  the  commission  was  modi- 
fied, 20  I.  C.  C.  Rep.  21,  upon  the  Pullman  company  offering  a 
general  reduction  in  the  rates  for  upper  berths  of  about  twenty 
per  cent  as  compared  with  the  rates  for  lower  berths  and  a  re- 
duction also  in  the  rates  on  long  hauls,  these  reductions  to  apply 
all  over  the  country. 

§  140  (108).  Under  common  control,  management  or  ar- 
rangement for  a  continuous  carriage. — The  rulings  of  the  com- 
mission as  to  what  constitutes  a  common  control,  management  or 
arrangement  for  a  continuous  carriage  have  been  affirmed  by  the 
courts.  The  test  of  subjection  to  the  act  is  through  routing  in  in- 
terstate commerce.  When  a  carrier  unites  with  one  or  others  in 
making  a  rate  for  interstate  traffic  and  a  through  bill  is  issued 
therefor,  it  is  subject  to  the  act.  In  C,  N.  0.  &  T.  P.  R.  Co.  v. 
Commission,  162  U.  S.  184,  40  L.  Ed.  935  (1896),  the  supreme 


§    140J  THE  INTERSTATE   COMMERCE   ACT.  225 

court  held  that  a  railroad  company  whose  road  was  wholly  within 
the  bounds  of  a  single  state  which  had  voluntarily  engaged  as  a 
common  carrier  in  interstate  commerce,  by  making  an  arrange- 
ment for  the  continuous  carriage  of  goods  through  another  state, 
was  subject  as  to  such  traffic  to  the  provisions  of  the  act.  An  ex- 
press agreement  for  a  through  rate  is  not  required,  but  the  suc- 
cessive receipt  and  forwarding  in  the  ordinary  course  of  business 
by  two  or  more  carriers  in  interstate  traffic  under  through  bills, 
or  any  arrangement  for  a  continuous  carriage  over  their  lines, 
constitutes  assent  to  such  common  arrangement  for  the  carriage 
within  the  meaning  of  the  act. 

"When  there  is  a  through  bill  of  lading  for  a  continuous  car- 
riage, it  is  immaterial  that  one  of  the  roads  party  to  the  through 
bill  received  the  sole  benefit  of  the  rate  on  its  own  line.  Such  a 
case  was  presented  to  the  supreme  court  in  L.  &  N.  R.  Co.  v. 
Behliner,  175  U.  S.  648,  44  L.  Ed.  309  (1900),  where  the  court  said 
that  the  contention  under  this  state  of  facts  that  the  carriers  did 
not  constitute  a  continuous  line  bringing  them  within  the  control 
of  the  act  to  regulate  commerce  was  no  longer  open  to  controversy 
in  that  coui-t.  See  also  United  States  v.  Seaboard  Railway  Co., 
82  Fed.  563  (1897). 

A  local  switching  company  is  not  subject  to  the  act  where  it 
makes  no  contracts  of  through  shipment,  but  imposes  a  separate 
trackage  charge  upon  the  other  companies  for  the  use  of  its 
tracks  in  local  transportation.  But  where  such  a  company  does 
become  a  party  to  such  a  contract  for  through  shipment,  it  be- 
comes as  to  such  business  subject  to  the  act.  See  C,  M.  &,  St.  P. 
R.  Co.  v.  Becker,  32  Fed.  849  (1897) .  As  to  the  evidencing  of  con- 
tracts for  through  shipments,  see  the  ruling  of  the  conunission 
in  2  1.  C.  C.  R.  553,  and  2  Int.  Com.  Rep.  393. 

A  railrojid  lying  wholly  within  a  state  which  transports 
freight,  whether  coming  from  within  or  without  the  state,  solely 
on  local  bills  of  lading  on  a  special  contract  limited  with  its  own 
lines,  and  without  dividing  charges  with  any  other  carrier  or  as- 
suming any  obligations  to  or  for  them,  does  not  come  within  the 
provisions  of  the  act  and  is  not  bound  to  make  any  report  of  its 
business  to  the  commission.  U.  S.  v.  Railroad  Co.,  81  Fed.  783, 
(1897),  following  162  U.  S.  184,  supra,  and  Commission  v.  B.  Z. 
&  C.  R.,  77  Fed.  942.  See  also  U.  S.  v.  Geddes,  sixth  circuit. 
C.  C.  A.,  S2(pra.  Through  routing  by  arrangement  for  con- 
15 


226  THE    INTERSTATE    COMMERCE    ACT.  [SECTION   1 

tinuous  interstnte  traffic,  is  a  matter  of  contract  between  tlie  car- 
riers, subject  to  the  power  of  the  commission  to  compel  a  through 
routing  under  the  act  as  amended  in  1906.     See  infra,  §  372. 

It  is  the  through  bill  of  lading  that  marks  the  continuous  in- 
terstate carriage;  neither  the  intention  of  the  shipper  nor  the 
actual  movement  of  the  goods  has  any  bearing  upon  the  matter. 
162  U.  S.  lS-1,  40  L.  Ed.  935  (1896)  ;  204  U.  S.  403,  51  L.  Ed.  540 
(1907)  ;  21  I.  C.  C.  E.  207. 

§  141  (109).  Transportation  throug-h  a  state. — Commerce  be- 
tween points  in  the  same  state,  which  is  carried  through  another 
state,  is  interstate  conunerce  and  subject  to  the  act.  This  was 
definitely  determined  by  the  supreme  court  in  Hanley  v.  Kansas 
City  Southern  Eailway  Co.,  187  U.  S.  617,  47  L.  Ed.  333  (1903), 
where  the  court  affirmed  the  judgment  of  the  circuit  court  of 
Arkansas  enjoining  the  railroad  commissioners  of  Arkansas  from 
fixing  and  enforcing  rates  upon  that  part  of  the  route  within  the 
state  of  Arkansas  of  a  shipment  beginning  and  ending  in  the 
state  of  Arkansas. 

The  court  held  that  there  could  be  but  one  rate  fixed  by  one 
authority,  and  that  the  case  was  analogous  to  that  of  naviga- 
tion on  the  high  seas  between  ports  of  the  same  state.  The  court 
distinguished  this  case  from  that  of  a  tax  which  was  sustained 
in  Lehigh  Valley  Ry.  Co.  v.  Pennsylvania,  145  U.  S.  192,  36  L.  Ed. 
672  (1892) ,  which  was  in  respect  of  the  receipts  of  the  proportion 
of  the  transportation  within  the  state.  A  tax  may  be  thus  appor- 
tioned according  to  mileage,  but  when  a  rate  is  established,  it  must 
be  established  as  a  whole.  This  was  the  view  that  had  been 
sustained  by  the  commission  in  several  cases,  7  I.  C.  C.  E-.  92,  and 
overrules  United  States  v.  Lehigh  Valley  R.  Co.,  115  Fed.  Rep. 
372,  and  several  state  decisions  which  had  been  based  upon  the 
decision  of  the  supreme  court  in  the  Lehigh  Valley  case. 

§  142  (106).  Territorial  transportation. — The  original  act 
provided  for  the  control  of  commerce  between  the  states  and 
territories.  The  power  of  congress  within  the  territories,  how- 
ever, is  general  and  plenary,  combining  the  powers  of  state  and 
federal  governments  under  the  express  power  to  make  all  need- 
ful rules  and  regulations  respecting  the  territory  of  the  United 
States.  Constitution,  art.  IV,  sec.  3.  See  IMormon  Church  v.  U. 
S.,  136  U.  S.  1,  34  L.  Ed.  481  (1890).    See  also  decision  of  the  su- 


§    143]  THE   INTERSTATE   COMMERCE   ACT.  227 

preme  court  holding  the  Employer's  Liability  Act  of  lOOG  valid 
in  the  territories  and  the  district  of  Columbia,  though  invalid  in 
the  states.  215  U.  S.  87,  54  L.  Ed.  p.  106  (1909).  The  inclusion 
of  transportation  within  a  territory  was  effected  by  the  amend- 
ment of  1906. 

Thus  the  act,  which  was  effective  intra-territorially  in  Okla- 
homa from  August  28,  1906,  expired  by  its  own  force  on  Novem- 
ber 16,  1907,  when  Oklahoma  was  admitted  as  a  state.  See  13  I. 
C.  C.  Rep.  366  and  473 ;  220  U.  S.  302,  55  L.  Ed. (1911) . 

The  commission  by  a  majority  report  has  ruled  (19  I.  C.  C. 
Rep.  105)  that  it  has  no  jurisdiction  over  the  railroads  of  Alaska, 
and  has  declined  to  entertain  a  complaint  for  that  reason.  A 
writ  of  mandamus  to  compel  the  commission  to  take  such  juris- 
diction was  refused  in  the  supreme  court  of  the  district  of  Co- 
lumbia, Avhich  refusal  was  reversed  upon  appeal  to  the  court  of 
appeals,  and  the  matter  is  now  (1911),  before  the  supreme  court 
of  the  United  States. 

§  143  (110).  Interstate  electric  railroads. — xVs  early  as  1897 
the  conunissiou,  by  a  majority  report,  held  that  the  terms  of  the 
act  are  broad  and  general  and  contain  no  exception  excluding 
from  its  scope  ''those  interstate  roads  which  are  constructed 
upon  public  highways,  to  provide  the  means  for  local  passenger 
transportation  in  the  streets  of  towns  and  cities  and  their  various 
suburbs."  7  I.  C.  C.  R.  83.  In  1907,  the  commission  said  that 
''the  act  makes  no  distinction  between  railroads  that  are  operated 
by  electricity  and  those  that  use  steam ;"  "both  are  subject  to  the 
act  when  engaged  in  interstate  transporation ; "  and  "we  may  be 
measurably  near  its  (electricity's)  general  use  as  the  chief  mo- 
tive power  in  transportation."  13  I.  C.  C.  R.  20.  In  1909,  the 
commission  ruled  that  an  interurban  road  connecting  Council 
Blutrs,  Iowa,  with  Omaha,  Neb.,  is  a  common  carrier  engaged  in 
the  interstate  transportation  of  persons,  and,  therefore,  amenable 
to  the  act.    17  I.  C.  C.  R.  239. 

This  ruling  was  sustained  by  the  commerce  court    (Oct.  5, 

1911),  Fed,  ,  in  an  injunction  brought  by  the  railroad 

company  to  restrain  the  enforcement  of  the  order.  The  court 
held  that  the  commission  had  jurisdiction  to  make  the  order,  over- 
ruling the  decision  of  the  circuit  judges  of  the  eighth  circuit 
(179  Fed.  243,  April,  1910)  in  granting  a  temporary  injunction 
against  the  order,  holding  that  the  act  did  not  apply  to  street 


228  THE    IXTERSTATE    COMMERCE    ACT.  [SECTION    1 

railroad  companies.  The  commerce  court  in  this  ease  also  held 
that  the  rate  fixed  by  the  commission,  ten  cents,  was  reasonable. 

The  commission  has  exercised  its  jurisdiction  over  electric 
street  railways  carrying  interstate  passengers  in  other  cases.  See 
20  I.  C.  C.  R.  232,  406,  -iSG. 

In  section  15  of  the  Act  of  June  18,  1910,  amending  the  In- 
terstate Commerce  Act,  congress  presumably  with  knowledge 
that  the  commission  was  exercising  jurisdiction  over  electric 
street  railways  carr^dng  interstate  passengers  enacted  the  fol- 
lowing, in  section  15,  concerning  through  routing : 

"The  commission  shall  not,  however,  establish  any  through 
route,  classification,  or  rate  between  street  electric  passenger  rail- 
ways not  engaged  in  the  general  business  of  transporting  freight 
in  addition  to  their  passenger  and  express  business  and  railroads 
of  a  different  character."  (For  construction  of  this  proviso  by 
the  commission,  see  infra,  §  374.) 

This  would  seem  to  recognize  the  existence  of  the  power  of  the 
commission  over  street  electric  railway  passengers;  otherwise 
there  would  have  been  no  reason  for  inserting  this  exception  in 
the  statue. 

§  144  (111).  Receivers,  lessees  and  purchasers  pendente  lite. 

When  railroad  corporations  are  subject  to  the  act,  their  re- 
ceivers are  also  subject  to  its  prohibitions,  requirements  and 
regulations.  6.  I.  C.  C.  R.  1  ;  6  I.  C.  C.  R.  378 ;  see  also  Erb  v. 
Morash,  177  U.  S.  584,  44  L.  Ed.  897  (1900) .  Lessees  of  such  cor- 
porations and  purchasers  at  foreclosure  sales  are  bound  by  the 
orders  of  the  commission  made  pending  such  foreclosure.  Inter- 
state Commerce  Commission  v.  W.,  N.  Y.  &  P.  R.  Co.,  W.  D.  of 
Pa.,  82  Fed.  Rep.  192  (1897). 

It  was  ruled  by  the  commission  in  6  I.  C.  C.  R.  378,  that  a  rail- 
road company  subject  to  the  act,  could  not  by  leasing  its  road, 
free  itself  from  liability  for  practices  made  illegal  by  the  act,  nor 
after  resuming  possession  of  its  property,  pending  proceedings 
against  it  to  enforce  such  statutory  provisions,  claim  exemption 
from  liability  during  the  time  of  the  lease.  See  Elkins  Act, 
infra,  §  422. 

§  145  (112).  Foreign  commerce. — The  act  includes  traffic 
"From  any  place  in  the  United  States  to  an  adjacent  foreign 
country,  or  from  any  place  in  the  United  States  through  a  for- 


§    145]  THE   INTERSTATE    COMMERCE   ACT.  229 

eign  country  to  any  other  place  in  tlie  United  States,  and  also  to 
the  transportation  in  like  manner  of  properly  shipped  from  any 
place  iu  the  United  States  to  a  foreign  country  and  carried  from 
such  place  to  a  port  of  transshipment,  or  *  *  *  from  a  foreign 
country  to  any  place  in  the  United  States  and  carried  to  such 
place  from  a  port  of  entry  either  in  the  United  States  or  an  ad- 
jacent foreign  country," 

The  supreme  court  said  in  the  Import  Rate  Case,  162  U.  S.  197, 
40  L.  Ed.  940  (1896),  after  quoting  this  part  of  the  section: 

"It  would  be  difficult  to  use  language  more  unmistakably 
signifying  that  congress  had  in  view  the  whole  field  of  commerce 
(excepting  commerce  Wholly  within  a  state)  as  well  that  between 
the  states  and  territories  as  that  going  to  or  coming  from  foreign 
countries." 

The  jurisdiction  of  the  commission  extends  to  only  that  part 
of  the  through  import  or  export  rate  which  applies  to  the  inland 
proportion  received  by  the  carrier.  As  to  effect  of  competition 
in  import  and  export  rates  making  disimilar  circumstances  and 
conditions  under  sections  3  and  4,  §§  233,  295;  infra.  As  to 
publications  of  import  and  export  rates,  see  8  I.  C.  C.  R.  214; 
10  I.  C.  C.  R.  55. 

The  commission  has  riiled  (13  I.  C.  C.  Rep.  266)  that  it  has 
no  jurisdiction  as  to  shipments  moving  from  ports  of  the  United 
States  to  a  foreign  country  not  adjacent,  when  such  shipments 
are  not  carried  by  rail,  or  by  rail  and  water,  from  an  inland 
point  of  origin  to  a  port  of  transshipment.  An  inland  move- 
ment, by  rail  or  by  rail  and  water  of  exports  or  import  traffic  is 
a  condition  precedent  to  the  jurisdiction. 

It  has  recently  (spring  of  1911)  been  held  by  Judge  McPher- 
son,  United  States  district  court,  at  Philadelphia,  that  a  carrier 
was  not  guilty  of  rebating  under  the  Elkins  Act,  who  transported 
sugar  by  rail  within  the  United  States  at  less  than  its  published 
rates,  the  through  bill  of  lading  reading  from  Hamburg,  Ger- 
many, "to  Philadelphia  for  transportation  in  bond  to  Raymond, 
Alberta."  Indeed  a  careful  reading  of  the  act  to  regulate  com- 
merce does  not  disclose  r.ny  intention  to  regulate  such  transpor- 
tation from  one  foreign  country  through  the  United  States  to 
another  foreign  country.  Since  this  decision  an  amendment  to 
the  act  has  been  introduced  in  congress  to  correct  the  oversight. 

In  13  I.  C.  C.  Rep.  310,  the  commission  interpreted  "adjacent 


230  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    1 

foreign  country"  as  meaning  one  between  •which  and  the  United 
States  there  is  the  possibility  of  substantial  continuity  of  rails. 

§  146  (113).  Place  of  incorporation  of  the  carrier  immaterial. 

The  conunission  has  ruled  that  a  foreign  railroad  corporation 
such  as  the  Grand  Trunk  Railroad  Company,  carrying  on  its 
traffic  between  the  United  States  and  Canada,  was  subject  as  to 
its  business  in  the  United  States  to  the  same  rules  and  conditions 
as  domestic  carriers.  3  I.  C.  C.  Eep.  89,  and  2  Int.  Com.  Rep. 
497 ;  4  I.  C.  C.  R.  447,  and  3  Int.  Com.  Rep.  417.  But  while  a 
corporation  engaged  in  interstate  traffic  in  the  states  is  subject  to 
the  act  as  to  such  traffic,  the  jurisdiction  of  the  commission  is 
necessarily  limited  to  the  United  States  and  does  not  extend  to  a 
question  of  alleged  local  discrimination  in  a  foreign  country  as 
Canada.    10  I.  C.  C.  R.  217. 

The  control  of  international  transportation  between  Canada 
and  the  United  States  by  a  joint  commission  is  now  (1911)  the 
subject  of  conference  between  these  countries.  A  treaty  is  to  be 
proposed  and  the  necessary  legislation  passed  in  both  countries. 

§  147  (114).  The  intention  of  interstate  shipment  not  suflB- 
cient. — Transportation  is  not  made  interstate  and  subject  to  the 
jurisdiction  of  the  commission  by  the  intention  of  the  shipper 
that  when  the  shipment  is  delivered  by  the  carrier  in  the  same 
state  it  shall  be  further  transported  by  another  carrier  into 
another  state.  1  I.  C.  C.  R.  30,  and  1  Inter.  607.  Thus,  fruit 
delivered  to  a  consignee  at  Jersey  City  under  rates  made  to 
Jersey  City  on  traffic  originating  in  New  Jersey,  though  destined 
for  the  state  of  New  York,  is  not  interstate  traffic  and  the  com- 
mission had  no  authority  over  such  freight;  2  I.  C.  C.  R.  142, 
and  2  Int.  Com.  Rep.  84. 

In  Gulf  C.  &  S.  F.  R.  Co.  v.  Texas,  204  U.  S.  403,  51  L.  Ed. 
540  (1907),  the  court  affirmed  97  Texas,  274,  in  holding  that  the 
regulations  of  the  state  railroad  commission  applied  to  a  shipment 
from  one  Texas  point  to  another,  although  the  shipment  origin- 
ally was  from  a  point  in  South  Dakota.  The  intention  of  the 
owner  to  forward  the  shipment  from  its  original  terminal  point 
to  another  point  in  the  same  state  did  not  make  the  shipment 
between  the  two  latter  points  by  a  connecting  carrier  an  inter- 
state shipment.  This  was  not  a  case  of  reconsignment,  but  the 
original  bill  of  lading  was  taken  up  and  a  new  bill  of  lading  is- 
sued from  Texarkana,  Tex.,  to  Goldthwaite,  Tex.    The  state  law, 


§    149]  THE   INTERSTATE   COMMERCE   ACT.  231 

therefore,  controlled.  See  also  C,  N.  0.  &  T.  P.  R.  Co.  y.  I.  C. 
C,  162  U.  S.  184,  40  L.  Ed.  935  (1896),  and  21  I.  C.  C.  R.  207. 

§  148  (115).  All  instrumentalities  of  shipment  or  carriage. — 

The  term  "railroad"  as  used  in  the  ori<riual  act  expressly  in- 
eluded  "all  bridges  and  ferries  used  or  operated  in  connection 
with  any  railroad,  and  also  all  the  road  in  use  by  any  corporation 
operating  a  railroad,  whether  owned  or  operated  under  a  con- 
tract, agreement  or  lease,"  and  the  term  "transportation,"  the 
act  declared,  "shall  include  all  instriunentalities  of  shipment  or 
carriage. ' '  It  was  held  in  the  first  important  ease  arising  under 
the  act  (Kentuelsy  &  Indiana  Bridge  Co.  v.  L.  &  N.  R.  Co.,  37 
Fed.  Rep.  567  (1889),  circuit  court,  Justice  Jackson,  afterwards 
of  the  supreme  bench),  that  this  inclusion  of  bridges  and  ferries 
as  subject  to  the  act  did  not  apply,  where  a  bridge  was  not  oper- 
ated by  the  bridge  company  but  by  the  railroad  companies  under 
contract  with  the  bridge  company.  In  such  cases  the  court  said 
the  bridge  company  was  not,  either  in  law  or  fact,  a  common  car- 
rier within  the  scope  and  meaning  of  the  section.  The  railroad 
company  using  the  bridge,  and  not  the  bridge  company  was  the 
common  carrier. 

It  was  ruled  by  the  commission  in  1  I.  C.  C.  R.  495.  and  1  Int. 
Com.  Rep.  775,  that  a  railroad  company  chartered  by  the  state 
of  Tennessee,  owning  a  short  road  wholly  in  that  state,  neither 
operating  its  road  nor  owning  any  rolling  stock,  but  used  and 
operated  as  a  means  of  conducting  interstate  traffic  in  coal  by 
the  companies  owning  a  connecting  interstate  road,  was  one  of 
the  instrumentalities  of  interstate  commerce  and  subject  to  the 
act.  These  definitions  of  what  is  included  by  the  terms  "rail- 
road" and  "transportation"  have  been  extended  by  the  amend- 
ments to  1906  and  1910,  and  a  reference  to  the  amended  section 
as  printed  above  will  show  what  is  meant. 

§  149  (116).  Delivery,  cartage,  storage  and  demurrage 
charges. — Under  the  original  act  the  inclusion  in  the  require- 
ment of  reasonableness  of  charges  for  the  services  rendered  in 
receiving,  delivering,  storing  and  handling  property  did  not  im- 
pose any  additional  duty  upon  the  carrier  in  regard  to  the  de- 
livery or  storage  of  property,  and  the  carrier  was  not  obliged 
under  this  section  to  deliver  or  store  otherwise  than  as  required 
by  its  coumion  law  duty  as  a  carrier.  These  services,  including 
any  charges  for  demurrage  and  other  terminal  expenses,  which 
have  been  included  under  the  general  term  of  accessorial  serv- 


232  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    1 

ices,  are  now  subject  to  the  act,  whenever  rendered  in  connec- 
tion with  interstate  traffic,  as  to  the  reasonableness  of  the  charges 
under  this  section.  It  also  follows  that  such  services  must  be 
rendered  without  discrimination  as  between  individuals  in  viola- 
tion of  section  2,  and  without  undue  preference  as  between  lo- 
calities or  kinds  of  traffic  under  section  3. 

It  was  said  by  the  supreme  court  in  the  Grand  Haven  Cartage 
Case,  Commission  v.  Railroad  Co.,  167  U.  S.  633,  1.  c.  645,  42  L. 
Ed.  306  (1897),  that  while  cartage  was  not  in  general  a  terminal 
expense  and  not  in  general  assumed  by  the  carrier,  the  transporta- 
tion as  a  rule  being  ended  when  the  freight  was  received  at  the 
warehouse,  that  it  was  a  reasonable  exercise  of  the  commission 's 
power  to  direct  in  a  general  order  that  the  railroad  companies 
should  thereafter  regard  cartage  as  one  of  the  terminal  charges 
to  be  published  in  their  schedules,  as  required  under  section  6 
(As  to  ruling  of  the  coimnission  thereunder,  see  infra,  sec.  6, 
and  note,  and  7  I.  C.  C.  R.  1.  c.  591). 

The  circuit  court  of  appeals,  in  the  same  Grand  Haven  Cart- 
age case,  in  their  opinion,  21  C.  C.  A.  103,  and  74  Fed.  803  (1896), 
which  was  approved  by  the  supreme  court,  called  attention  to 
the  distinction  between  the  American  and  English  customs  of 
delivery  of  goods  by  carriers.  Free  cartage  had  been  developed 
in  the  acts  of  the  English  railways  from  their  competition  with 
the  carrier  companies  who  used  their  lines,  but  that  no  such 
conditions  had  been  developed  in  the  growth  of  our  American 
system  of  transportation,  where  it  was  very  exceptional  for  rail- 
roads to  do  the  carting  required  for  delivering  and  collecting  the 
goods.  The  service  was  essentially  a  distinct  and  separate  serv- 
ice from  rail  carriage  and  purely  accessorial. 

The  fact  that  a  railroad  company  for  many  years  had  paid 
the  charge  for  hauling  freight  from,  wharves  to  its  station  did 
not  bind  it  to  continue  that  practice,  and,  if  not  bound  by  con- 
tract, it  might  stop  doing  so  at  any  time.  1  I.  C.  C.  R.  107,  1.  Int. 
Com.  Rep.  363. 

As  to  storage  charges,  it  was  ruled  by  the  commission  (10  I. 
C.  C.  R.  352),  that  a  railroad  freight  d.epot  and  a  public  ware- 
house are  not  used  for  the  same  purposes,  and  a  charge  for  stor- 
age in  a  railroad  depot  may  properly  be  made  higher  than  a 
public  warehouse  charge,  with  the  object  of  compelling  the  ex- 
peditions removal  of  freight,  without  violation  of  this  section. 

The   reasonableness  of  the  regulations   for   demurrage   and 


§    150]  THE   INTERSTATE    COMMERCE   ACT.  233 

other  accessory  services  as  well  as  the  reasonal)leness  of  the 
charges,  have  been  reviewed  by  the  commission.  In  ITite  v. 
Central  R.  R.  of  N.  J.,  C.  C.  A.  Srd  Circuit,  171  Fed.  370  (]909), 
reversing  the  judgment  in  IGG  Fed.  92G,  it  was  held  that  the 
circuit  court  had  jurisdiction  to  determine  the  indebtedness  of 
a  shipper  to  a  i-aili-oad  company  for  demurrage  under  the  rules 
adopted  by  the  company  where  it  depended  on  the  construction 
and  not  on  the  reasonableness  of  the  rules,  although  the  latter 
question,  tliat  of  reasonableness,  was  one  primarily  for  the  com- 
mission. 

In  Michie  v.  N.  Y.,  N.  IT.  &  R.  Co.,  151  Fed.  G94,  C.  C.  A.  of 
Mass.  (1907),  a  suit  brought  to  recover  the  amount  of  a  demur- 
rage charge  of  $1.00  per  day  for  hay  storage,  the  charge  was 
held  not  unreasonable.  It  wms  ruled  by  the  commission  in  8  I.  C. 
C.  R.  531,  that  the  making  of  demurrage  charges  to  commence 
before  the  expiration  of  a  reasonable  time  for  loading  or  unload- 
ing was  a  violation  of  this  section.  As  to  charges  of  demurrage 
upon  private  cars,  see  infra,  §  254. 

§  150.  Commerce  court  on  terminal  facilities  and  plant  facil- 
ities.—In  the  case  of  the  A.  T.  &  S.  F.  R.  Co.  et  al.  v.  The  Com- 
mission, the  commerce  court,  188  Fed.  229  (1911),  denied  a  motion 
to  dismiss  under  the  provisions  of  section  1  of  the  act  creating 
the  court  and  made  an  order  suspending  the  order  of  the  Inter- 
state Commerce  Commission  (18  I.  C.  C.  R.  310),  condemning 
the  charge  of  two  dollars  and  a  half  a  car  made  by  the  railroads 
for  delivering  and  receiving  interstate  carload  freight  in  Los 
Angeles  to  a  nmnber  of  industries  located  upon  spurs  or  side 
tracks  within  their  respective  switching  limits.  The  order  was 
not  based  upon  the  excessiveness  of  the  charge  for  the  service, 
but  upon  the  theory  that  the  carrier  had  already  been  paid  for 
the  service  by  the  payment  of  the  regular  tariff  rate  from  the 
point  in  Oregon  to  destination.  The  commission  found  that  the 
industrial  track  upon  which  the  service  was  rendered  was  a  ter- 
minal facility  of  the  railroad,  and  not  a  plant  facility  of  the  in- 
dustry, and  that  the  service  for  which  the  charge  Avas  made  was 
the  same  service  as  that  which  was  performed  by  the  carrier  in 
delivering  freight  at  its  depot  or  team  tracks.  The  court  held 
that  such  a  finding  of  the  commission  was  not  one  which  pre- 
cluded the  court  from  coming  to  a  different  conclusion  upon  the 
record.  That  if  there  was  a  substantial  conflict  in  the  evidence, 
the  court  would  feel  bound  bv  the  findinsr  of  the  commission. 


234:  THE    INTERSTATE    COMMERCE    ACT.  [SECTION   1 

unless  clearly  and  palpably  against  the  Aveiglit  of  the  testimony. 
But  that  the  court  was  not  concluded  by  the  finding  of  the  com- 
mission based  upon  admitted  facts  which  did  not  tend  to  sustain 
the  conclusion  reached.  The  court  said  that  the  contention  that 
the  transportation  of  cars  and  freight  to  and  from  industrial 
plants  located  from  one-fifth  of  a  mile  to  seven  miles  from  the 
main  track  of  the  carrier  was  the  same  service  which  the  carrier 
performed  and  for  which  it  is  paid  by  the  general  tariff  charge 
when  it  delivers  freight  at  its  depot  in  Los  Angeles,  or  at  the 
team  tracks,  was  so  contrary  to  the  admitted  physical  facts  as 
to  be  wholly  luitenable.  It  seemed  clear  that  in  the  absence  of 
statute  the  railroads  were  not  bound  to  perform  this  industrial 
track  service,  and  if  they  voluntarily  performed  it  under  an 
arrangement  with  the  owner  of  the  industrial  plant,  there  wa& 
no  reason  why  they  might  not  charge  a  reasonable  price  there- 
for, and  the  charge  in  question  was  conceded  to  be  reasonable. 
It  seems  that  the  railroads  filed  with  their  general  tariffs  with 
the  Interstate  Commerce  Commission  a  tariff  for  this  industrial 
track  service  and  there  was  no  evidence  that  the  railroads  had 
ever  waived  the  right  to  charge  for  this  service.  See  Interstate 
Commerce  Commission  v.  Stickney,  215  U.  S.  105.  The  court 
therefore  concluded  that  the  carrier  was  not  bound  by  law  to 
deliver  freight  at  the  industrial  plant  and  therefore  it  was  a 
special  service  for  which  it  was  entitled  to  charge.  There  was 
no  claim  that  the  charge  was  unreasonable  in  itself,  or  that  it 
involved  any  undue  preference,  or  was  discriminatory  in  any 
way.     The  order  of  the  commission  was  therefore  suspended. 

§  151.  Bulk  grain  storage  as  part  of  transportation. — The- 
"elevation,  and  transfer  in  transit,"  of  grain  with  such  ''stor- 
age" as  may  be  incidental  thereto  is  clearly  a  part  of  "transpor- 
tation ' '  both  under  the  common  law  and  as  defined  in  this  section. 
When  performed  by  the  carrier,  or  its  agents,  the  charges  must  be 
just  and  reasonable.  Such  services,  however,  are  not  those  which 
have  received  so  much  attention  from  the  commission.  The  ele- 
vator cases  considered  by  the  commission  have  arisen  by  reason  of 
the  carriers'  contracting  with  certain  large  shippers  to  perform 
these  services.  The  result  has  been  that  the  shippers  had  a  dual 
relationship  to  the  grain  they  handled:  (1)  with  respect  to  their 
personal  ownership  of  the  grain,  and  (2)  as  agents  of  the  car- 
riers for  its  transfer.  In  the  process  of  transfer  these  shippers 
cleaned,  sorted,  graded,  clipped,  mixed  and  otherwise  treated 


§    153]  THE  INTERSTATE   COMMERCE   ACT.  235 

the  grain  with  the  result  that  when  it  moved  forward  to  the 
various  markets  it  was  in  condition  for  immediate  inspection 
and  sale.  At  first  the  commission  ruled  that  the  allowances  made 
by  certain  of  the  carriers  for  such  elevation  and  transfer,  I14 
cents  per  100  pounds,  notwithstanding  the  important  advantages 
these  elevator  contractors  had  over  competitors,  did  not  consti- 
tute a  violation  of  the  act;  upon  reconsideration,  the  commission 
attempted  to  separate  elevation  as  a  part  of  "transportation" 
from  commercial  elevation  which  is  necessary  for  cleaning,  sort- 
ing, grading,  clipping  and  mixing  and  held  that  the  allowance 
for  elevation  or  transfer  in  transit  should  not  exceed  three- 
fourths  of  a  cent  per  100  pounds;  more  recently  however  the 
conmiission  has  ruled  that  the  commercial  advantages  derived 
from  elevation  in  transit  are  so  great,  and  the  service  of  tran- 
fer  in  transit  so  interwoven  with  purely  commercial  elevation, 
that  no  allowance  should  be  made  therefor  to  the  OAvners  of  the 
grain.  This  ruling  was  reversed  by  the  United  States  circuit 
court  (176  Fed.  409),  and  decision  was  affirmed  by  the  supreme 
court  in  32  Sup.  Ct.  2  (Nov.  1911),  on  the  ground  that  such 
order  was  beyond  the  power  of  the  commission.  The  court  sus- 
tained the  order  of  the  commission  reducing  the  allowance  to 
costs  of  service,  confining  the  allowance  to  grain  reshipped  with- 
in ten  days.    See  infra,  §  247. 

For  commission  rulings  see  10  I.  C.  C.  R.  309;  12  I.  C.  C.  R. 
85  and  111 ;  13  I.  C.  C.  R.  498 ;  14  I.  C.  C.  R.  315,  317  and  551 ; 
15  I.  C.  C.  R.  90  and  147;  16  I.  C.  C.  R.  337,  479  and  590;  17 
I.  C.  C.  R.  158 ;  and  18  I.  C.  C.  R.  364. 

§  152.  The  amendments  of  section  as  to  accessory  charges. — 
The  third  paragraph  of  this  section  was  amended  by  the  Hep- 
burn Act  by  the  omission  of  the  words  "or  for  receiving,  deliv- 
ering, storage,  or  handling  of  such  property,"  and  by  changing 
the  phrase  "reasonable  and  just"  to  "just  and  reasonable." 
The  latter  change  is  without  significance,  and  the  omission  noted 
was  due  to  the  fact  that  the  definition  of  "railroad"  and 
of  "transportation"  contained  in  the  second  paragraph,  as 
amended,  supplied  the  omission. 

§  153  (117) .  Carriage  of  live  stock  and  perishable  property. 
The  character  of  the  property  may  impose  upon  the  carrier  dis- 
tinct obligations  with  respect  to  the  manner  of  carriage  and  de- 


236  THE    INTERSTATE    COMMERCE    ACT.  [SECTION   1 

livery.  Tims  in  the  case  of  live-stock,  the  company  is  under  a 
legal  obligation  to  provide  suitable  and  necessary  means  and  fa- 
cilities for  receiving  live-stock  offered  for  shipment,  and  this 
duty  cannot  be  efficiently  discharged,  at  least  in  a  town  or  city, 
without  the  aid  of  enclosed  yards  in  which  the  stock  offered  for 
shipment  may  be  handled  with  convenience  and  safety  and  with- 
out inconvenience  to  the  public.  The  railroad  company  there- 
fore cannot,  in  addition  to  the  customary  and  legitimate  charges 
for  the  transportation,  make  a  special  charge  for  merely  re- 
ceiving and  delivering  stock  in  and  through  the  yards  provided 
for  the  purpose.  Covington  Stockyards  Co.  v.  Keith,  139  U.  S. 
128,  35  L.  Ed.  73.  The  court  in  this  case  applied  the  rule  laid 
down  in  Northern  Pennsylvania  Railroad  Co.  v.  Commercial 
National  Bank  of  Chicago,  123  U.  S.  727,  31  L.  Ed.  287,  that  the 
undertaking  of  a  carrier  to  transport  livestock  differed  in  some 
respect  from  the  responsibility  assumed  in  the  cartage  of  ordin- 
ary goods  and  included  the  delivery  of  such  live-stock,  the  dif- 
ference referred  to  growing  out  of  the  nature  of  the  particular 
property  transported. 

A  railroad  carrier  could  make  an  exclusive  contract  with  a 
stock  yards  for  delivery  of  livestock,  provided  no  charge  was 
made  for  delivering  when  taken  by  consignee  within  reasonable 
time.    Covington  Stock  Yards  v.  Keith,  snpra;  Butchers  &  Drov- 
ers' Stock  Yards  Co.  v.  L.  &  N.  E.  Co.,*  14  C.  C.  A.  290,  31 
U.  S.  App.  252,  67  Fed.  Rep.  85,  10  I.  C.  C.  R.  173;  Central 
Stock  Yards  v.  L.  &  N.  R.  Co.,  192  U  S.  568,  48  L.  Ed.  565. 
See,  wfra,  section  3.    In  the  case  of  the  Union  Stock  Yards  of 
Chicago  (Commission  v.  C.  B.  &  Q.  R.  Co.,  186  U.  S.  320,  46  L. 
Ed.  1182),  the  supreme  court  affirmed  the  circuit  court  of  ap- 
peals   (43   C.   C.   A.   209,   103   Fed.   249),  in  refusing  to   en- 
force  an   order   of  the   commission   holding   unreasonable   the 
charge  of  two  dollars  for  the  delivery  of  the  live-stock  to  the 
stockyards.     It  seems  that  prior  to  1894  no  separate  terminal, 
charge  was  made;  and  the  through  rate  existing  prior  to  1894 
was  presumed  to  have  provided  compensation  for  services  for 
making  deliveries  to  the  stockyards.     The  court  said  that  the 
defendants  had  the  right  to  divide  their  rates,  and  that  the  term- 
inal charge  must  be  separately  considered  as  a  distinct  charge, 
and  if  it  was  reasonable  as  a  separate  charge  it  did  not  follow 
that  it  should  be  reduced  when  the  through  rate  was  reduced. 


§    lo3J  TIJE   IKTEK.STATE    COMMEKCE    ACT.  237 

The  court  tlu'refore  affirmed  the  decree  of  tlie  court  of  appeals 
without  pj-ejudice  to  the  conuiiissiou's  i-ij,'ht  thereafter  to  com- 
mence proceedings  to  correct  any  unreasonal^lencss  in  the  rate 
resulting  from  the  additional  terminal  charge  as  1o  any  territory. 
As  to  reasonal)le  charges  for  extra  hazard  to  carrier  in  live-stock 
shii)ments,  see  10  I.  C.  C.  K.  327,  and  333. 

A  railroad  company  accustomed  to  deliver  cars  of  cattle  at 
stockyards  off  its  line  by  transporting  them  over  a  line  belong- 
ing to  a  stockyards  company,  for  which  it  pays  a  fixed  sum  per 
car,  was  held  in  Walker  v.  Keenan,  39  C.  C.  A.  6G8  and  73  Fed. 
755,  by  the  circuit  court  of  the  United  States,  seventh  cir- 
cuit, to  be  under  no  obligation  to  consignees  whose  business  was 
located  at  the  stockyards  to  supply  unloading  facilities  at  its 
own  stations  in  a  different  part  of  the  state,  and  hence  was  not 
bound  in  default  thereof  to  deliver  at  the  stockyards  without  a 
separate  charge.  It  could  on  posting  schedules  to  that  effect,  as 
required  by  section  6  of  the  Interstate  Commerce  Act,  make  a 
charge  for  the  freight  to  the  station  and  a  separate  terminal 
charge  of  a  fixed  sum  per  car  for  delivery  to  the  stockyards. 
Reversing  64  Fed.  922  (1896). 

The  subject  of  terminal  charges  for  delivering  car  loads  of 
live  stock  was  considered  by  the  supreme  court  in  Interstate 
Commerce  Commission  v.  Stickney,  215  U.  S.  98,  54  L.  Ed.  p. 
112  (1909),  where  the  court,  affirming  164  Fed.  638,  held  that 
a  terminal  charge  for  delivering  car  loads  of  live  stock  at  the 
Union  Stock  Yards,  at  Chicago,  a  point  beyond  the  carrier's 
line,  if  in  itself  just  and  reasonable  and  separately  stated  in  the 
tariff  schedules  as  required  by  the  act,  could  not  be  condemned 
on  the  ground  that  if  taken  wdth  the  prior  charges  of  transpor- 
tation of  the  carrier  or  connecting  carriers,  it  made  a  total 
charge  unreasonable.  The  carrier  was  entitled  to  have  a  finding 
that  any  particular  charge  was  unreasonable  and  unjust  before 
it  IS  required  to  make  a  change  and  that  for  any  services  that  it 
may  render  or  procure  to  be  rendered  off  its  own  line  or  outside 
the  mere  matter  of  transportation  of  its  own  line,  it  may  charge 
and  receive  compensation.  The  court,  therefore,  affirmed  the 
circuit  crurt  in  enjoining  the  enforcement  of  the  order  of  the 
Tnterstatf  Conmierce  Commission,  requiring  the  reduction  of  the 
terminal  charge  from  two  dollars  to  one  dollar  per  car. 


238  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    1 

§  154.  Refrigeration  in  transit. — Irrespective  of  the  require- 
ments of  the  Interstate  Commerce  Act,  it  is  the  duty  of  the  car- 
riers undertaking  the  transportation  of  perishable  traffic  re- 
quiring refrigeration  in  transit  to  provide  ice  and  facilities  for 
such  transportation  in  connection  with  tlie  traffic;  and  the 
charges  therefor  are  charges  in  connection  with  the  service  and 
are  subject  to  the  requirement  of  reasonableness  contained  in 
this  section  as  to  interstate  shipments.  Adequate  refrigeration 
was  held  to  be  an  incident  of  seaworthiness  under  a  biU  of  lading 
for  ocean  transportation  of  dressed  beef.  See  Martin  v.  South- 
wark,  191  U.  S.  1,  48  L.  Ed.  65  (1904).  See  also  the  ruling  of 
the  commission,  6  I.  C.  C.  R.  295. 

Under  the  amendment  of  1906  the  charges  for  "ventilation," 
' '  refrigeration, "  or  "  ice  "  must  be  separately  published  as  other 
charges  in  connection  with  transportation. 

In  Atlantic  Coast  Line  v.  Garaty,  166  Fed.  Rep.  10  (1908), 
it  was  held  by  the  circuit  court  of  appeals  of  the  fourth  circuit 
that  where  the  carrier  had  facilities  for  furnishing  shippers  of 
vegetables  refrigerating  cars  to  transport  the  same,  which  cars 
the  carrier  did  not  own  as  a  part  of  its  equipment  and  plant, 
and  the  shipper  in  reliance  thereon  had  raised  vegetables  which 
required  refrigerator  cars  for  transportation  to  the  market,  he 
was  entitled  to  recover  damages  sustained  by  the  carrier's  fail- 
ure to  furnish  such  cars  for  the  transportation  of  plaintiff's 
vegetables  on  reasonable  demand.  The  court  in  this  case  cited 
and  relied  on  the  ruling  of  the  supreme  court  in  Co^dngton 
Stock  Yards  Co.  v.  Keith,  139  U.  S.  129,  35  L.  Ed.  73  (1891)  where 
the  court  said  the  carrier  must  at  all  times  be  in  proper  condi- 
tion both  to  receive  from  the  shipper  and  deliver  to  the  con- 
signee according  to  the  nature  of  the  property  to  be  transported 
as  well  as  the  necessities  of  the  respective  localities  in  which  it 
is  received  and  delivered. 

It  was  held  by  the  court  of  appeals  of  the  eighth  circuit  in 
Knudson-Ferguson  Co.  v.  Michigan  Central  Railroad  Co.,  148 
Fed.  968  (1906),  that  a  shipper  could  not  recover  in  an  action 
under  section  8  an  extra  charge  for  icing  service  shown  by  the 
schedule,  but  separately,  which  had  been  collected  from  him, 
without  proving  that  the  charge  was  unreasonable. 

The  carrier  is  therefore  bound  to  furnish  refrigeration  cars 
by  reason  of  the  common-law  duty,  but  it  can  provide  such  cars 


§    154]  TOE   INTERSTATE    COMMERCE   ACT.  239 

by  purchase  or  lease,  and  if  by  lease,  the  lease  can  be  made  with 
one    company.     Charges    for    refrigeration    of    cars    furnislied 
should  be  published  and  adhered  to,  and  in  the  transportation 
of  the  freight,  the  carrier  must  either  furnish  the  ice  for  a  rea- 
sonable price,  or  permit  the  shipper  to  do  so.     The  exceptional 
conditions  of  refrigerator  car  service,  such  as  the  necessity  for 
rapid  transit,  the  expense  of  handling,  the  uncertainty  of  the 
crops,  the  frequent  absence  of  return  load,  etc.,  are  all  factors 
to  be  considered  in  determining  the  reasonableness  of  the  charges. 
The  subject  of  reasonable  charges  and  regulations  in  provid- 
ing refrigeration  has  been  considered  by  the   commission   in 
several  cases.    See  the  Georgia  Peach  Growers'  Case,  10  I.  C.  C. 
R.  255,  and  12  I.  C.  C.  R.  178.    In  20  I.  C.  C.  R.  lOG,  the  Ar- 
lington Heights  Fruit  Exchange  Case,  the  rates  for  icing  service 
from  California  points  were  considered  by  the  commission.    The 
subject  had  become  one  of  great  importance  through  the  enor- 
mous development  of  the  business  of  transporting  fruits  from 
California  and  the  southern  points.    In  this  case,  on  account  of 
the  difference  of  opinion  as  to  the  amount  of  ice  required  for 
refrigeration,  the  commission  conducted  a  series  of  experiments 
to  ascertain  the  fact.     The  commission  found  that  the  railroad 
charges  for  what   is  known   as   "standard   refrigeration"   of 
oranges  in  transit  from  California  points  east  were  not  unrea- 
sonable; but  that  the  pre-cooling  charges  made  by  the  railroads 
were  unreasonable,  as  those  shippers  who  had  devised  and  per- 
fected the  system  of  pre-cooling  for  shipment  should  not  be  com- 
pelled to  pay  for  the  privilege  of  using  it  more  than  a  fair  cost 
to  the  carrier  for  providing  the  additional  facilities,  which  were 
not  included  in  the  ventilated  car  rate,  with  a  fair  profit;  and 
it  was  therefore  reduced  from  thirty  dollars  per  car  to  not  ex- 
ceeding seven  dollars  and  a  half  per  car.    The  report  in  this  case 
discussed  in  detail  pre-cooling  as  done  by  the  shipper,  and  as  it 
may  be  by  the  carrier,   as  well  as  standard  refrigeration  in 
transit.    In  the  Georgia  Fruit  Exchange  Case,  20  I.  C.  C.  R.  623, 
the    commission    considered    the    actual    condition    of    Georgia 
peaches  as  offered  for  refrigerator  transportation,  and  ruled  that 
without  pre-cooling,  satisfactory  refrigeration  was  only  possible 
for  a  portion  of  the  carload  required  under  the  tariffs  of  the 
railroad. 

It  seems  from  the  investigations  of  the  commission  in  these 


240  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    1 

cases,  that  refrigeration  in  transit  can  properly  be  relied  upon  to 
keep  the  shipment  cool  during  the  journey,  providing  it  was  cool 
at  the  start  of  the  journey,  and  should  not  be  relied  upon  to 
reduce  high  temperature  in  the  article  as  offered  for  transpor- 
tation, and  that  the  shipper  should  therefore  prepare  commodi- 
ties offered  for  refrigeration  by  pre-cooling  in  order  that  the 
icing  provided  by  the  carriers  may  be  effective. 

It  seems  also  that  where  there  is  no  preparation  of  the  fruit 
by  pre-cooling,  the  connaiission  will  not  reduce  the  carload 
weight,  if  by  so  doing,  without  reducing  the  carload  rate,  the 
carrier's  net  earnings  would  be  unduly  reduced.  The  condition 
of  the  article  offered  for  refrigeration  should  be  such  that  proper 
refrigeration  is  a  possibility,  and  the  carrier  cannot  be  held  re- 
sponsible for  deterioration  due  to  inherent  vices,  hidden  defects, 
or  a  natural  development  of  the  article,  such  as  normal  ripening 
and  subsequent  rotting,  providing  the  carrier  itself  is  without 
negligence  in  prompt  transportation. 

§  155.  Private  cars. — The  amendment  of  1906  included  ''ears 
and  other  vehicles  and  all  instriunentalities  and  facilities  of 
shipment  or  carriage,  irrespective  of  ownership,  or  any  contract, 
expressed  or  implied,  for  the  use  thereof. ' ' 

It  would  seem  that  the  owners  of  equipment  would  have  been 
included  as  parties  subject  to  the  act  under  the  Elkins  Act  of 
1903.  Prior  to  this  enactment,  the  commission  had  considered 
the  general  subject  of  private  freight  cars  in  its  annual  report 
for  1904,  where  it  said  that  a  practical  raonoply  had  been  created 
in  the  use  of  private  cars  for  the  movement  of  certain  commodi- 
ties, which  has  enormously  increased  the  cost  of  transportation 
to  the  public. 

Prior  to  the  amendment  of  1906,  it  had  been  held  in  Inter- 
state Commerce  Commission  v.  Reichman,  145  Fed.  235,  C.  C. 
of  111.  1906,  that  a  private  car  company  which  has  delivered  cars 
to  railroad  companies  for  the  use  of  shippers,  receiving  pay  from 
the  railroad  companies  on  a  mileage  basis,  was  under  the  juris- 
diction of  the  commission  and  that  under  the  act  as  amended  in 
1903,  it  could  inquire  into  the  operation  and  tariffs  of  the  com- 
pany and  compel  the  necessary  testimony  concerning  the  conduct 
of  the  business. 


§    156]  THK   INTERSTATE    COMMERCE    ACT.  241 

For  rulinfif  of  the  commission  jsikI  the  coimiu'rce  court  sustain- 
ing the  exaction  hy  railroads  of  deiiiurrage  on  private  cars,  see 
infra,  §  2o4. 

§  156.  The  prohibition  of  passes. — The  anti-pass  provision  of 
tliis  act  was  first  inserted  In-  the  amendment  of  ]lJO(j  and  shouhl 
he  read  with  section  22  of  the  act,  see  infra,  section  22.  Under 
the  ori^rinal  act  there  was  no  express  proliiliition  of  passes,  but 
their  issuance  as  a  personal  favor  had  been  held  both  by  the  com- 
mission and  the  supreme  court  to  be  within  tiie  prohibition  of 
section  2.  Infra,  §  219.  Section  22  was  originally  adopted  as  an 
amendment  to  the  act  of  1889,  with  a  provisio  added  in  1895. 
The  supreme  court  said  in  the  Party  Rate  Case,  145  U.  S.  263, 
36  L.  Ed.  703  (1892),  that  its  purpose  settled  beyond  doubt  that 
discrimination  in  favor  of  the  persons  therein  named  was  not 
unjust.  The  provision  of  this  section  differs  from  section  22  in 
that  it  i-elates  only  to  passengers,  that  is,  there  is  no  authoriza- 
tion thereunder  for  the  free  carriage  of  property  belonging  to 
persons  of  the  excepted  classes. 

This  anti-pass  amendme/it  in  section  1  substitutes  an  express 
statutory  prohibition  of  interstate  passes  with  specific  excep- 
tions. It  is  in  effect  a  statutory  declaration  that  the  non-excepted 
passes  are  acts  of  unjust  discrimination,  as  the  recipient  of  a 
pass  is  subjected  to  a  penalty  as  well  as  the  carrier  who  gives 
one.    See  American  Express  Co.  v,  U.  S.,  supra. 

In  L.  &  N.  R.  R.  Co.  v.  Mottlej^  219  U.  S.  467,  55  L.  Ed. 

(1911),  reversing  133  Ky.  615,  it  was  held  by  the  Sl^preme  court 
that  this  section  prohibited  railroads  from  issuing  passes  for  in- 
terstate transportation  even  on  contracts  made  before  the  passage 
of  the  Hepburn  rate  law.*  In  this  case  the  parties  were  injured 
on  the  railroad  in  1871,  and  to  settle  their  claims  for  damages 
the  railroad  agreed  to  carry 'them  free  as  long  as  they  lived.  The 
court  said  that  the  purpose  of  the  statute  was  to  cut  up  by  the 
roots  every  form  of  discrimination,  favoritism,  and  inequality, 
except  in  certain  excepted  classes,  and  that  congress  had  not 
placed  therein  persons  who  had  contracts  for  the  issuance  of 


*  This  decision  also  in  effect  reversed  the  ruling  of  the  circuit  court 
of  Kentucky  in  17)0  Fed.  406,  which  was  reversed  and  case  dismissed 
for  want  of  jurisdiction  in  211  U.  S.  149,  53  L.  Ed.  126. 
16 


242  THE  INTERSTATE  COMMERCE  ACT.  [SECTION   1 

passes  and  that  the  court  could  not  add  an  exception  based  on 
equit-able  grounds  when  congress  had  forbore  to  make  such  an 
exception.  The  words  of  the  act,  therefore,  mean  that  the  car- 
rier cannot  charge,  collect,  or  receive  for  transportation  on  its 
road  auA'thing  but  money. 

This  ruling  was  followed  in  C.  I.  &  L.  E.  Co.  v.  United  States, 
219  U.  S.  486,  55  L.  Ed.  305  (1911),  affirming  163  Fed.  114, 
where  the  acceptance  of  advertising  in  payment  of  interstate 
transportation  under  contract,  though  authorized  by  the  state 
statute  incorporating  the  company,  was  adjudged  illegal. 

"Where  a  pass  is  issued  to  an  employe  and  the  employe  deliv- 
ers it  to  a  person  not  authorized  to  use  it,  and  such  party  does 
use  it  on  an  interstate  journey,  he  is  guilty  of  violation  of  the 
act,  and  the  employe  is  also  guilty  of  aiding  and  abetting  in  such 
violation.  United  States  v.  Williams,  159  Fed.  310,  D.  C.  of  Ala. 
1908.  Also  in  the  district  court  of  Iowa,  United  States  v.  Mar- 
tin, 176  Fed.  110,  the  court  held  that  one  who  had  in  his  posses- 
sion such  pass  and  sold  it  to  another  knowing  he  was  not  the 
person  named  therein,  with  the  intent  that  he  should,  use  it,  which 
he  does  by  riding  an  interstate  journey,  was  guilty  of  violating 
the  statute. 

The  commission  has  ruled  (12  I.  C.  C.  R.  15)  that  newspaper 
employes  on  special  newspaper  trains  are  not  included  in  the 
excepted  list  entitled  to  free  transportation.  Also  that  railroad 
companies  have  no  right  to  extend  free  transportation  to  the 
local  transfer  and  baggage  express  company  (12  I.  C.  C.  R.  39)  ; 
that  the  local  company  not  being  subject  to  the  regulating  stat- 
ute could  give  free  transportation  to  whomever  it  wished,  but 
that  a  carrier  subject  to  the  jurisdiction  of  the  act  could  not 
lawfully  grant  free  transportation  to  the  officers  of  the  local 
company.  This  was  subject  to  the  specific  exceptions  noted  in 
the  act  as  to  baggage  agents  entering  trains  near  a  large  terminal 
to  arrange  for  baggage  transfer.  Land  and  immigration,  agents, 
unless  they  are  bona  fide  and  actual  employes  of  carriers  sub- 
ject to  the  act,  are  not  within  the  excepted  classes.  12  I.  C.  C. 
R.   7. 

§  157.  The  commodities  clause. — The  4th  paragraph  of  the 
1st  section  of  the  act  was  inserted  in  the  amendment  of  1906. 


§    157 J  TIIK   INTERSTATE    COMMERCE   ACT, 


243 


and  is  known  as  the  "Commodities  Clause,"  because  it  declares 
that  after  May  1,  1908,  "it  shall  be  unlawful  for  any  railroad 
company  to  transport  "in  interstate  commerce"  any  article  or 
commodity  other  than  timber  and  the  manufactured  products 
thereof"  wherein  it  lias  an  interest  direct  or  indirect.  The  com- 
modities clause  was  held  vidid  by  the  supreme  court  in  United 
State  V.  Del.  &  Had.  Co.,  213  IT.  S.  366,  53  L.  Ed.  836,  in  1909; 
reversing  the  U.  S.  court  of  appeals  of  the  third  circuit,  164 
Fed.  215.  Tlie  court  decided  that  the  provision  was  a  lawful 
exercise  of  the  power  of  congress  and  that  the  exception  in  favor 
of  timber  and  the  products  thereof  did  not  invalidate  the  pro- 
vision. As  the  court  construed  the  clause,  however,  the  bona 
fide  ownership  by  a  carrier  of  stock  in  a  producing  company 
docs  not  constitute  a  direct  or  indirect  legal  interest  in  the  car- 
rier in  the  commodity  manufactured,  mined  or  produced  within 
the  meaning  of  the  act  (Harlan,  J.,  dissenting).  The  penalty 
clause  of  the  act  was  not  involved  in  the  decision,  but  the  court 
ruled  that  in  any  event  it  was  separable.  In  this  case  it  was  also 
decided  that  a  company  organized  as  a  canal  company  and  only 
operating  a  railroad  as  an  incident  to  mining,  was  subject  to  the 
act  as  to  its  interstate  business. 

Tliis  ruling  as  to  the  effect  of  stock  ownership  was  very  ma- 
terially qualified  in  the  case  of  U.  S.  v.  Lehigh  Valley  R.  R.  Co., 

220  U.  S.  p.  257,  55  L.  Ed.  (April,  1911),  which  was  in 

substance  but  a  sequel  to  the  commodity  cases  of  1909.  These 
cases  having  been  reversed  and  remanded  for  further  proceed- 
ings, application  was  made  by  the  United  States  in  one  of  them, 
the  Lehigh  Valley  case,  to  file  an  amended  bill,  charging  that 
the  railroad  company  was  not  only  the  owner  of  all  the  stock 
issued  by  the  coal  company,  but^that  the  railroad  company  so 
used  the  power  of  its  stock  ownership,  as  to  deprive  the  coal  com- 
pany of  all  real  independent  existence,  and  to  make  it  virtually 
but  an  agency  of  the  railroad  company, — and  that  the  coal  com- 
pany was  not  a  bona  fide  mining  company,  but  was  merely  an 
adjunct  or  instrumentality  of  the  defendant.  The  circuit  court 
declined  to  permit  tliis  amendment  to  be  filed,  and  entered  a  de- 
cree dismissing  the  bill.  The  supreme  court  held  that  this  was 
an  a])use  of  discretion,  that  the  proposed  amendment  was  ger- 
mane to  the  original  cause  of  action,  and  was  not  foreclosed  by 
the  previous  decision.     While  the  right  of  a  railroad  company 


24-1  THE    INTERSTATE    COMMERCE    ACT,  [SECTION   1 

as  a  stocldioldcr  to  use  its  stock  ownership  for  the  purpose  of  a 
bona  fide  separate  administration  of  the  affairs  of  a  corporation 
in  which  it  has  a  stock  interest  may  not  be  denied,  yet  the  use 
of  such  stock  ownership  in  substance  for  the  purpose  of  destroy- 
ing the  entity  of  a  producing  corporation,  and  of  commingling 
its  affairs  in  administration  with  the  affairs  of  the  railroad  com- 
pany so  as  to  make  the  two  corporations  virtually  one,  brings 
the  railroad  company  so  voluntarily  acting  as  to  such  producing 
corporation  within  the  prohibition  of  the  commodities  clause. 
The  decree  of  the  circuit  court  was,  therefore,  reversed  and  the 
cause  remanded  for  further  proceedings.  It  is,  perhaps,  a  fair 
inference  from  these  cases  that  while  a  railroad  company  may 
own  stock  in  a  mining  company,  it  cannot  use  such  ownership 
for  the  control  of  such  subsidiary  company  without  falling 
within  the  prohibition  of  the  act. 

For  rulings  of  the  commission  and  the  courts  as  to  the  rights 
and  duties  of  a  carrier  in  transporting  its  own  products  prior 
to  the  enactment  of  this  statute,  that  is,  as  to  a  discrimination  of 
a  carrier  in  favor  of  itself  as  a  shipper,  see  infra,  §  214.  And 
see  also  N.  Y.,  N.  H.  &  II.  II.  R.  Co.  v.  Commission,  200  U.  S. 
361,  50  L.  Ed.  515,  decided  February  19,  190G,  where  it  was 
held  that  a  railroad  could  not  give  a  rebate  on  its  own  coal  car- 
ried by  it,  and  a  contract  for  such  delivery  was  void,  and  it  was 
immaterial  that  the  contract  might  not  have  been  open  to  this 
objection  when  made,  and  that  the  inadequacy  of  the  price  was 
caused  by  strikes  and  other  reasons  beyond  the  control  of  the 
carrier.  The  carrier,  therefore,  could  not  lawfully  stipulate  to 
sell  and  transport  coal  at  a  rate  of  prices  insufficient  to  yield  the 
published  freight  rates,  after  deducting  the  cost  of  purchase  and 
delivery. 

§  158.  Switch  connections. — The  last  paragraph  of  section  1 
was  added  in  1906,  the  original  act  having  no  provision  with  re- 
spect to  switch  connections.  This  paragraph  has  been  strictly 
construed  by  the  com.mission,  not  only  because  of  its  terms  but 
by  reason  of  the  inadvisability  of  cutting  the  carriers'  rails  with- 
out grave  necessity.  It  is  to  be  noted  that  all  the  act  requires 
is  a  '' switch  connection  with  any  such  lateral,  branch  line  of 
railroad,  or  private  side  track."  The  act  does  not  require  the 
carrier  in  any  c^se  to  build  or  furnish  laterals,  or  branch  line? 


§    158]  THE   INTERSTATE   COMMERCE   ACT.  240 

of  railroad,  or  jiiivate  side  tracks,  but  it  does  require  the  carrier 
to  construct,  maintain  and  operate  a  switch  connection  witli 
private  sidetracks,  etc.,  Avliich  have  been  constructed  to  connect 
with  its  railroad,  provided  such  connection  is  reasonably  prac- 
ticable, can  be  put  in  with  safety  and  will  furnish  sufficient 
business  to  justify  construction  and  maintenance.  16  I.  C.  C.  R. 
587.  Safety,  practicability  and  an  offer  of  sufficient  business  are 
the  necessary  elements  to  a  demand  for  a  switch  connection,  but 
the  commission's  jurisdiction  can  only  arise  upon  a  complaint 
filed  after  a  demand  in  writing  upon  tlie  carrier  has  been  made. 

It  was  ruled  by  the  supreme  court  in  McNeill  v.  Southern  Ry. 
Co ,  202  U.  S.  543,  50  L.  Ed.  1142,  affirming  134  Fed.  82,  in  May. 
190G,  prior  to  this  amendment,  that  a  state  commission  had  no 
authority  to  compel  a  carrier  to  deliver  cars  containing  inter- 
state shipments  beyond  its  right  of  way  to  a  private  siding. 
Whether  such  an  order,  applicable  only  to  state  business,  would 
be  repugnant  to  due  process  of  law  under  the  constitution,  was 
not  decided.  This  amendment  as  enacted  in  3906,  made  no  pro- 
vision for  complaints  1)y  a  lateral  branch  line  railroad,  but  only 
by  a  shipper,  and  it  was  held  by  the  supreme  court  in  I.  C.  C.  v. 
D.  L.  &  AV.  E.  R.  Co.,  216  U.  S.  531,  54  L.  Ed.  605  (1910),  af- 
firming 166  Fed.  498,  tliat  a  complaint  by  a  lateral  branch  line 
was  not  within  tlie  statute.  The  paragraph  was  amended,  there- 
fore, in  1910,  so  lliat  it  now  provides  for  the  making  of  such 
complaint  by  any  shipper  or  owner  of  a  lateral  branch  railroad. 

The  commission  has  ruled,  14  I.  C.  C.  R.  191,  that  this  pro- 
vision of  the  statute  docs  not  grant  plenary'  discretion  to  the  com- 
mission as  to  the  advisability  of  switch  connections.  It  is  sub- 
ject to  three  conditions:  (1)  That  the  switch  connection  shall 
be  reasonably  practicable;  (2)  that  it  can  be  put  in  with  safety; 
and,  (3)  that  it  will  furnish  sufficient  business  to  justify  the 
construction  and  maintenance  of  such  switch  connection.  While 
retaining  the  right  to  control  the  location  of  the  switching  track 
of  private  industries  in  accordance  with  the  evidence,  the  com- 
mission has  said  that  it  is  disposed,  in  recognition  of  the  risk 
that  arises  from  such  interruption  of  through  rails,  to  leave  the 
location  of  such  tracks  largely  to  the  discretion  and  wisdom  of 
the  carrier.  12  I.  C.  C.  R.  503.  It  has  also  ruled  that  the  con- 
nection should  be  made  at  the  expense  of  the  party  asking  for 
the  same.    3  2  1.  C.  C.  R.  270.    For  historv  of  commission's  rul- 


246  THE    INTERSTATE    COilMERCE    ACT.  [SECTION    1 

ings,  see  12  I.  C.  C.  E.  pages  193,  202  and  54:5 ;  18  I.  C.  C.  K  310 ; 
20  I.  C.  C.  R.  pages  56  and  486;  21  I.  C.  C.  R.  183. 

§  159.  The  establishment  of  through  routes. — The  amend- 
ment of  1D06  made  it  the  duty  of  the  carrier  to  establish  through 
routes  and  just  and  reasonable  rates  applicable  thereto,  and  the 
amendment  of  1910,  added  thereto:  "and  to  provide  reasonable 
facilities  for  operating  such  through  routes  and  to  make  reason- 
able rules  and  regulations  with  respect  to  the  exchange,  inter- 
change and  return  of  ears  used  therein,  and  for  the  operation  of 
such  through  routes,  and  providing  for  reasonable  compensation 
to  those  entitled  thereto." 

This  duty  of  establishing  througli  routes  that  is  thus  imposed 
upon  the  carrier,  should  be  read  with  the  provision  of  section  15, 
as  amended,  infra,  §  372. 

§  160.  Classifications,  regulations  and  practices. — The  amend- 
ment of  1910  inserted  as  the  fourth  paragraph  of  section  1,  a 
new  legislative  declaration  of  the  law  with  respect  to  classifica- 
tions of  property  and  the  regulations  and  practices  of  the  car- 
riers concerning  tickets,  receipts,  bills  of  lading;  the  methods  of 
presenting,  marking,  packing  and  delivering  property  for  trans- 
portation ;  the  facilities  for  transportation ;  the  carrying  of 
baggage  of  various  kinds ;  and  all  other  matters  necessarily  con- 
nected therewith.  This  clear  announcement  of  the  legislative 
intent  has  rendered  obsolete  the  doubt  sometimes  expressed  Avith 
respect  to  the  jurisdiction  of  the  commission  over  these  matters. 
Prior  to  the  passage  of  the  Hepburn  Act  in  1906,  the  jurisdiction 
of  the  commission  over  these  matters  was  limited  bj^  the  fact  that 
the  commission  had  no  authority  to  make  rates,  or  what  would 
be  equivalent  thereto,  for  the  future.  But  wherever  a  classifica- 
tion resulted  in  an  unjust  or  unreasonable  charge  under  section 
1,  or  in  undue  prejudice  or  discrimination  under  sections  2  and 
3,  the  commission  has  always  had  jurisdiction  and  has  asserted 
such  power  from  the  ver^^  first. 

§  161  (119).  Charges  must  be  reasonable  and  just. — The  last 
paragi-aph  of  the  first  section  in  its  original  form  providing  that 
all  charges  for  any  service  rendered  in  the  transportation  of  per- 
sons and  property,  shall  be  reasonable  and  just,  and  proliibiting 


§    1G2]  THE    INTKICSIAIK    CU.MMhitCK    ACT,  247 

and  declaring  unlawful. every  nnrcnsonahle  eliarge  for  such  serv- 
ice, is  only  an  affirmance  of  the  common  law.  In  England,  a 
common  carrier  was  bound  to  carry  for  a  reasonable  remunera- 
tion as  he  was  bound  to  carry  all  persons  and  property  offered 
for  transportation  and  suitable  to  be  carried,  though  it  was  not 
uniformly  held  that  the  carrier  was  bound  to  carry  for  all  at  the 
same  rate.  In  the  j\Iaximum  Rate  case,  167  U.  S.  479,  42  L.  Ed. 
251  (1807),  the  supreme  court  said  that  this  section  was  a  simple 
enactment  of  the  common  law  requirement,  and  that  for  more  than 
a  hundred  years  it  had  been  the  afifirmative  duty  of  the  courts  to 
execute  and  enforce  the  common  law  requirement  that  all  charges 
should  be  reasonable  and  just.  This  requirement  of  reasonable- 
ness grew  out  of  the  relation  of  the  carriers'  occupation  to  the 
public  as  was  declared  in  the  Granger  cases,  94  U.  S,  113,  24  L. 
Ed.  77  (1877),  where  the  court  said  that  the  carrier  must  carry 
when  called  upon  to  do  so,  and  that  he  could  charge  only  a  reason- 
able sum  for  the  carriage,  and  in  the  absence  of  any  legislative 
regulation  upon  the  subject,  the  courts  must  decide,  as  they  did 
for  private  persons  wdien  controversies  arose,  what  is  reasonable. 

§  162  (120).  Practical  difficulties  in  the  enforcement  of  rea- 
sonableness in  rates. — There  are  few  if  any  cases  wherein  recov- 
ery has  been  had  at  law  upon  the  common  law  liability  of  the 
carrier  for  charging  excess  over  a  reasonable  rate.  As  said  by 
the  supreme  court,  in  the  Trans-Missouri  case  last  cited,  any  in- 
dividual shipper  would  in  most  cases  be  apt  to  abandon  the  ef- 
fort to  show  the  unreasonable  character  of  the  charge,  because 
of  the  necessary  expense  of  time  and  money  to  prove  the  fact, 
and  the  risk  of  incurring  the  ill-will  of  the  road  itself  in  all  its 
future  dealings  with  him. 

Furthermore,  the  question  of  what  is  reasonable  is  one  of 
fact,  dependent  upon  the  s])ecial  circumstances  of  each  case,  and 
as  these  cireumstanccs  are  changing  from  time  to  time,  a  rate 
which  is  unreasonable  when  paid,  may  become  reasonable, 
through  changed  conditions,  before  tlie  case  is  determined  in  the 
court  of  last  resort,  or  even  in  the  trial  court.  See  conclusion  of 
opinion  in  Smyth  v.  Ames,  1G9  U.  S.  1.  c.  549,  42  L.  Ed.  819 
(1898). 

Another  reason  for  the  practical  difficulty  in  the  way  of  en- 
forcement by  shippers  of  this  common  law  obligation  of  the  car- 
riers to  charge  only  a  "reasonable  rate,"  lies  not  only  in  the 


248  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    1 

delay  and  expense  of  litigation,  and  in  the  small  amount  involved 
in  the  payment  of  the  charge  for  any  one  shipment,  but  in  the 
fact  that  a  party  paying  the  unreasonable  charge  without  pro- 
test, in  the  absence  of  any  mistake  or  fraud,  was  denied  any  right 
of  action.  But  see  Cook  v.  C.  R.  I.  &  P.  R.  Co.,  81  Iowa,  551, 
and  9  L.  E.  A.  764  (1890),  where  held  that  payments  made  by 
shippers  in  ignorance  of  discrimination  and  after  the  assertion  of 
the  carrier  that  no  lower  rates  were  given,  are  not  voluntary  pay- 
ments within  the  rule  tliat  they  could  not  be  recovered  back. 

Even  assuming  tbat  recovery  was  had,  the  enforcement  by 
different  juries  of  their  own  standards  of  reasonableness, — for  it 
must  be  in  each  case  a  question  of  fact  at  last, — would  be  neces- 
sarily destructive  of  the  uniformity  which  is  essential  in  any 
permanent  regulation  of  transportation  for  both  shippers  and 
carrier.  See  remarks  of  Phillips,  J.,  in  Windsor  Coal  Co.  v.  C. 
&  A.  R.  Co.,  52  Fed.  716  (1892).  It  was  suggested,  however,  by 
the  United  States  court  of  appeals  in  Southern  Pacific  R.  Co.  v. 
Colorado  Fuel  &  Iron  Co.,  42  C.  C.  A.  12,  101  Fed.  779  (1900), 
that  it  Avas  impossible  that  a  jury  verdict  would  lead  to  a  with- 
drawal of  the  rate  adjudged  unreasonable. 

The  above  discussion  as  to  the  practical  difficulties  in  the  en- 
forcement of  reasonableness  in  rates  has  been  rendered  histori- 
cal and  academic  by  the  amendments  of  1906  and  1910,  and  by 
the  construction  placed  upon  the  law  by  the  supreme  court  in 
the  Abilene  Cotton  Oil  Case,  204  U.  S.  426,  infra,  sec.  9  of  act. 
This  case  involved : 

The  scope  and  effect  of  tJie  act  to  regulate  commerce  upon  the 
right  of  a  shipper  to  maintain  an  action  at  law  against  a  com- 
mon carrier  to  recover  damages  because  of  the  exaction  of  an 
alleged  unreasonable  rate,  although  the  rate  collected  and  com- 
plained of  was  the  rate  stated  in  the  schedule  filed  with  the  In- 
terstate Commerce  Commission  and  published  according  to  the 
requirements  of  the  act  to  regulate  commerce,  and  which  it  was 
the  duty  of  the  carrier  under  the  law  to  enforce  as  against  ship- 
pers. 

The  court  unanimously  held : 

That  a  shipper  seeking  reparation  predicated  upon  the  unrea- 
sonableness of  the  established  rate  must,  under  the  act  to  regu- 
late commerce,  primarily  invoke  redress  through  the  Interstate 
Commerce  Commission,  which  body  alone  is  vested  with  power 


§    IG-IJ  TJIK   INTERSTATE   COMMERCE   ACT.  219 

orij2rin;i]ly  to  eiiterlaiii  proceedings  for  the  alteration  of  an  es- 
tablished schedule,  because  the  rates  fixed  therein  are  unreason- 
able. 

In  discussing  the  reasons  why  concurrent  jurisdiction  as  to 
the  propriety  of  latos  under  the  act  could  not  be  had  between 
the  courts  and  the  connuission,  the  court  said : 

"For  if,  -without  previous  action  by  the  commission,  power 
might  be  exerted  by  courts  and  juries  generally  to  determine  the 
reasonableness  of  an  established  rate,  it  would  follow  that  unless 
all  courts  reached  an  identical  conclusion  a  uniform  standard 
of  rates  in  the  future  would  be  impossible,  as  the  standard  would 
fluctuate  and  vary,  dependent  upon  the  divergent  conclusions 
reached  as  to  reasonableness  by  the  various  courts  called  upon 
to  consider  the  subject  as  an  original  question.  Indeed  the 
recognition  of  such  a  right  is  wholly  inconsistent  with  the  ad- 
ministrative power  conferred  upon  the  commission  and  with  the 
■duty,  which  the  statute  casts  upon  that  body,  of  seeing  to  it 
that  the  statutory  requirement  as  to  uniformity  and  equality  of 
rates  is  observed.'^ 

§  163  (121).  Standard  of  reasonableness  under  state  statutes. 
Under  state  statutes  re-asserting  this  common  law  requirement 
of  reasonableness  and  providing  for  the  publication  of  tariffs 
and  charges  and  their  submission  to  and  approval  by  state  com- 
missions, it  has  been  held  that  the  common  law  right  is  super- 
seded by  the  statute  and  that  there  can  be  no  recovery  for  alleged 
unreasonableness  in  the  charges  thus  published  and  approved, 
as  the  published  rates  will  be  conclusively  presumed  to  be  rea- 
sonabl(>.  Young  v.  Kansas  City,  St.  J.  &  C.  B.  R.  Co.,  33  Mo. 
App.  509  (1889)  ;  Windsor  Coal  Co.  v.  C.  &  A.  R.  Co.,  supra;  Mc- 
Grew  v.  IMissouri  Pacific  R.  Co.,  114  Mo.  210  (1893)  ;  Railroad  Co. 
T.  People,  77  111.  443  ;  Sorrell  v.  Railroad  Co.,  75  Ga.  503  ;  Burling- 
ton, C.  R.  &  N.  R.  Co.  V.  Dey,  82  Iowa,  312.  In  the  latter  case,  in 
answer  to  the  claim  tliat  the  commissioners'  rate  would  not  se- 
cure the  accused  from  conviction,  if  it  was  excessive,  the  court 
said  that  tlie  state  would  be  precluded  from  denying  that  the 
rate  was  reasonable. 

§  164  (127).  Standard  of  reasonableness  under  the  act. — The 
4)rinciple  whereon  these  decisions  concerning  state  statutes  were 


250  THE    I^^^ERSTATE    COMMERCE    ACT.  [SECTION    1 

based  was  applied  to  the  act  to  regulate  commerce  in  the  case 
of  Van  Fatten  y.  C,  M.  &  St.  P.  R.  Co.,  81  Fed.  545,  decided  by 
Shiras,  J.,  iu  the  circuit  court  of  tlie  uorthern  district  of  Iowa,, 
and  in  Kennedy  v.  Terminal  Railroad  Ass'n,  81  Fed,  802,  by 
Adams,  J.,  in  the  circuit  court  of  eastern  district  o:|^issouri. 
These  eases  were  decided  in  1807  before  the  amendment  of  the 
act  in  1903,  wherein  the  published  schedule  was  made  conclusive 
against  the  carrier.  It  was  held  in  both  cases  that  in  order  to 
recover  it  must  be  shown  that  the  rate  was  unreasonable  accord- 
ing to  the  provision  of  the  acts,  and  that  it  was  a  good  defense  to 
an  action  for  damages  for  unreasonable  charges  that  the  carrier 
had  adopted  and  posted  a  properly  proportionate  schedule  of 
rates  under  section  6.  These  cases  were  both  brought  under  the 
assinned  election  given  by  sections  8' and  9,  without  appealing  to 
the  commission  to  adjudge  the  rate  unreasonable  and  for  repar- 
ation. Prior  to  these  cases  in  1893  in  Swift  v,  R.  R.  Co.,  64  Fed. 
59  (N.  Dist.  of  Illinois)  it  had  been  held  by  Grosscup,  J.,  that 
there  was  no  common  law  of  recovery  in  the  federal  court,  and 
that  under  the  act  plaintiff  could  not  recover  without  averring, 
that  no  rates  were  published  as  required  by  the  act. 

Since  the  amendment  of  1903,  infra,  §  422,  the  posted  rate  is 
the  definite  and  conclusive  standard  of  reasonableness  subject 
to  the  finding  of  the  commission  that  the  rate  so  scheduled  is  un- 
reasonable. As  to  the  power  to  allow  reparation  in  damages  for 
unreasonable  rates,  see  infra,  sections  of  act  14  and  16;  as  to 
limitation  of  right  of  action  under  sections  of  act  8  and  9,  see 
section  6  of  act,  infra. 

There  is  no  presumption,  however,  that  a  rate  is  reasonable  in 
law,  because  it  had  been  filed  and  published  by  the  railroad  witli 
the  commission,  Illinois  Central  R.  R.  Co.  v.  Commission,  206 
U.  S.  441,  51  L.  Ed.  1128  (1907.) 

§  165  (123).  The  power  of  the  commission  in  fixing  rates. — 
Dui-ing  the  first  ten  years  of  its  existence,  the  commission  claimed 
and  exercised  the  power  of  fixing  rates  in  fiiUiro;  that  is,  when 
a  rate  was  adjudged  unreasona])le,  to  determine  what  rate  was- 
reasonable,  and  to  direct  the  carrier  to  reduce  the  rate  to  the 
designated  maximum.  Illustrations  of  the  decisions  by  the  com- 
mission during  this  period  will  be  found  in  their  reports  from 
1887  to  1897.    In  1896,  it  was  decided  by  the  supreme  court,  in 


§    IGUj  THE   IXTEIJSTATE    COMMERCE   ACT,  251 

what  is  known  ;;.s  tin-  So.-inl  Circle  Case,  PC2  U.  S.  184,  40  L.  Ed. 
9;i5;  and  the  following  year  in  the  Cincinnati  Freight  Bureau 
Case,  167  U.  S.  479,  42  L.  Ed.  243,  that  congress  had  not  con- 
ferred upon  the  commission  the  power  to  prescribe  rates,  whether 
maximum,  minimum  or  absolute,  and  in  the  latter  case,  it  said 
that  congress  might  have  fixed  the  rate  itself,  or  committed  to 
some  subordinate  tribunal  the  duty,  but  that  it  had  not  done  so. 
For  statement  by  the  commission  of  its  powers  under  these  de- 
cisions, see  7  I.  C.  C.  K.  286,  and  report  of  the  commission  for 
3898,  pages  23  to  27. 

As  the  effect  of  these  decisions  was  to  give  the  carriers  the 
power  to  establish  rates  independent  of  the  judgment  of  the 
commission,  leaving  the  commission  only  the  power  to  pass  upon 
the  reasonableness  of  specific  rates,  the  amendatory  act  of  1906 
conferred  upon  the  commission  in  express  terms  the  power  to 
determine  and  prescribe  what  would  be  the  just  and  reasonable 
rate  or  rates,  charge  or  charges  to  be  thereafter  observed  in  such 
cases  as  the  maximum  to  be  charged.  See  sec.  15,  infra.  By 
the  act  of  1910,  the  power  of  the  commission  has  been  further 
enlarged  so  as  to  include  the  suspension  of  an  increase  of  rate 
announced  by  the  carrier  before  the  same  takes  effect.  See  sec. 
15,  infra. 

§  166.  No  power  in  the  courts  to  fix  rates. — The  fixing  of 
rates  for  the  future  is  a  legislative  or  administrative,  and  not  a 
judicial  duty.  This  distinction  and  the  limitations  of  judicial 
power  in  this  matter  were  pointed  out  by  the  supreme  court  in 
the  decision  in  the  Vir£;inia  Eate  Case,  211  U.  S.  210,  supra:  "A 
judicial  inc[uiry  investigates,  declares  and  enforces  liabilities  as 
they  stand  on  present  or  past  facts,  and  under  laws  supposed  to 
exist.  That  is  its  purpose  and  end.  Legislation,  on  the  other 
hand,  looks  to  the  future  and  changes  existing  conditions  by  mak- 
ing a  new  rule,  to  be  applied  thereafter  to  all  or  some  part  of 
those  subject  to  its  power.  The  establishment  of  a  rate  is  the 
making  of  a  rule  for  the  future,  and  therefore  is  an  act  legislative 
not  judicial  in  kind." 

It  was  ruled  in  this  case  that  a  corporation  commission  em- 
powered by  state  constitution  to  fix  rates  in  fuluro  was  not  a 
court  in  the  proper  sense  of  the  terra,  as  such  a  power  was  not 
a  judicial  power. 


252  THE    INTERSTATE    COMMERCE    ACT.  [SECTION   1 

See  also  Soatliern  Railway'  Co.  v.  Colorado  Fuel  &  Iron  Co., 
supra. 

Thus,  it  was  ruled  in  1897  (when  tlie  commission  was  not  em- 
powered to  fix  rates),  by  the  circuit  court  of  Washington,  in 
Farmers  Loan  &  Trust  Co.  v.  Northern  Pacific  Ry.  Co.,  83  Fed. 
249,  that  an  order  of  the  commission  (5  Interstate  Commerce 
Rep.  478),  tliat  commodity  rates  nnist  not  be  lower  than  neces- 
sary to  meet  competition  nor  to  be  applied  to  articles  not  subject 
thereto,  Avas  a  mere  general  statement  of  the  duty  of  the  railway 
company  as  defined  by  the  law,  and  was  too  indefinite  to  be  the 
basis  of  a  decree  by  the  court  to  enforce  obedience. 

§  167  (125).  The  federal  courts  on  reasonableness  of  railroad 

rates.— AYhile  it  is  not  wathin  the  judicial  power  to  fix  rates 
for  the  f  ature,  it  is  a  judicial  duty  to  pass  upon  the  reasonableness 
of  rates  when  they  are  presented  to  the  court.  The  question  of 
reasonableness  in  railroad  rates  has  been  construed  by  the  fed- 
eral courts  in  two  distinct  classes  of  cases.  Thus,  in  the  judicial 
review  of  state  imposed  rates  upon  intrastate  business,  suiJra, 
§§  95  to  97,  the  court  determined  whether  .carriers  have  been 
deprived  of  their  right  to  make  reasonable  charges,  that  is, 
whether  the  state  imposed  rates  are  in  any  sense  confiscatory, 
thus  depriving  them  of  their  property  without  compensation; 
while  in  questions  arising  under  the  commerce  act  the  question 
is  raised  whetlier  the  rates  charged  by  the  carrier  or  which  he 
seeks  to  impose  exceed  what  is  reasonable.  In  the  first  class  of 
cases  the  burden  of  proof  is  upon  the  carrier  to  show  that  the 
state  has  fixed  unreasonable  limitation  upon  his  rates;  while  in 
the  other  class  of  cases,  where  the  shipper  complains  of  an  ex- 
isting rate,  the  burden  is  upon  him  to  show  that  the  carrier  has 
exceeded  a  reasonable  standard.  Under  the  recent  amendment 
to  the  act  in  1910,  when  the  carrier  proposes  an  advance  over 
existing  rates  and  objection  is  made  thereto,  the  burden  is  upon 
the  carrier  to  show  the  reasonableness  of  the  advance. 

The  supreme  court  said  in  the  IMaximum  Rate  Case,  supra, 
that  a  rate  may  be  unreasonable  because  it  is  too  low 
as  well  as  because  it  is  too  high.  In  the  former  case  it  is 
unreasonable  and  unjust  to  the  stockholder,  and  in  the  latter 
to  the  shipper.  In  Turnpike  Road,  supra,  164  U.  S.  578,  1.  c. 
597,  41  L.  Ed.  560,  the  court  said,  in  determining  the  question 


§    1G7]  THE   INTERSTATE   COMMERCE   ACT.  253 

of  reasonableness,  its  duty  was  to  take  into  consideration  the  in- 
terest both  of  tlie  public  and  of  the  owner  of  tlie  property. 

In  the  Minnesota  Rate  Case,  1S6  U.  S.  237,  4G  L.  Ed.  1151,  in- 
volving a  specific  state  imposed  rate,  the  court  said  (p.  268) 
that  each  case  must  be  determined  by  its  own  considerations,  and 
while  railroads  were  entitled  to  a  fair  return  upon  the  capital 
invested  they  were  not  justified  in  charging  exorbitant  rates 
even  in  ortler  to  pay  operating  expenses  if  the  conditions  of  the 
country  do  not  permit  it.  It  sometimes  happens  that,  for  pur- 
poses of  ultimate  profit  and  for  building  up  a  future  trade,  rail- 
ways carry  both  freight  and  passengers  r.t  a  positive  loss;  and 
while  it  may  not  be  in  the  power  of  the  eonunission  to  compel 
such  a  taj-ill',  it  could  not  upon  the  other  hand  be  claimed  that 
the  railroads  could  in  all  cases  be  allowed  to  charge  grossly  ex- 
orbitant rates  as  compared  with  rates  paid  upon  other  roads,  in 
order  to  pay  dividends  to  stockholders. 

The  subject  of  valuation  of  property  for  rate  making  lias  been 
thoroughly  discussed  in  the  federal  courts  in  cases  concerning 
the  alleged  confiscatory  character  of  state  imposed  rates.  See 
supra,  Part  I.  Chapter  VII. 

In  the  Turnpike  Road  Case,  supra,  the  court  said  that  a  cor- 
poration performing  public  services  was  not  entitled  as  a  right 
and  without  reference  to  the  interests  of  the  public,  to  realize  a 
given  per  cent,  upon  its  capital  stock;  that  stockholders  were 
not  the  only  persons  whose  rights  or  interests  were  considered, 
and  that  the  rights  of  the  public  were  not  to  be  ignored. 

In  the  San  Diego  AVater  Rate  case,  174  U.  S.  739.  43  L.  Ed. 
1155  (1899),  the  court  said  it  was  "the  real  value  of  the  property 
which  should  be  taken  into  consideration.  What  the  company  is 
entitled  to  demand  in  oi-der  that  it  may  have  just  compensation, 
is  a  fair  return  upon  the  reasonable  value  of  tlie  property  at  the 
time  it  is  being  used  for  the  public.  The  property  may  have  cost 
more  than  it  ought  to  have  cost,  and  its  outstanding  bonds  for 
money  borrowed  and  which  went  into  the  plant  may  be  in  excess 
of  the  real  value  of  the  property." 

On  the  general  subject  see  also  Kansas  City  Stock  Yards  case, 
183  U.  S.  79,  46  L.  Ed.  p.  92  (1901),  involving  the  rates  in  the 
Kansas  City  Stock  Yards,  and  the  :\retropolitan  Trust  Co.  v.  R. 
R.  Co.,  90  Fed.  683  (1898),  United  States  circuit  court  of  Texas, 
on  Texas  state  rates. 


254  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    1 

§  168  (126).  The  value  of  railroad  property  as  a  basis  for 
rate  regulation. — The  value  of  the  property  devoted  to  the 
l)ublic  service  is  recognized  as  a  factor,  but  not  the  only  factor, 
in  rate  making.  It  has  been  uniformly  held,  both  by  the  com- 
mission and  the  courts,  that  it  is  the  present  cost  or,  as  it  is 
sometimes  phrased,  the  cost  of  reproduction  when  the  issue  of 
the  reasonableness  of  the  rates  is  investigated,  and  not  the  orig- 
inal cost  which  is  to  be  determined  as  a  factor  on  the  question 
of  the  reasonableness  of  rates.  Evidence  of  the  cost,  however, 
may  be  admissible  in  determining  the  ultimate  fact  of  present 
value ;  but  where  the  cost  is  shown  evidence  is  admissible  to  show 
the  depreciation  of  the  property  values.  It  is  for  the  purpose 
of  determining  this  actual  present  value  that  the  commission  has 
urged  a  physical  valuation  of  the  interstate  railroads. 

It  is  in  connection  with  this  determination  of  the  present  value 
of  the  property  that  the  matter  of  capitalization  has  been  con- 
tndered.  The  supreme  court  said,  in  the  Nebraska  Eate  Case, 
supra,  that  in  determining  value  as  a  basis  for  making  rates, 
capitalization  and  the  original  cost  of  construction,  the  amount 
expended  in  permanent  improvements,  the  market  value  of 
bonds  and  stocks,  the  probable  earning  capacity  under  the  rates, 
and  the  sum  required  to  operate  the  business,  were  all  matters 
for  consideration  and  should  be  given  such  weight  as  w^ould  be 
just  and  right  in  each  case.  The  court  concluded  by  saying  that 
there  may  be  other  matters  to  be  regarded  in  estimating  the 
value. 

In  the  Knoxville  Water  case,  212  U.  S.  p.  12,  53  L.  Ed.  371, 
which  was  a  case  involving  the  validity  of  maximum  rates  for  a 
local  water  company,  the  court  said  that  the  stock  of  the  com- 
pany which  appeared  to  have  been  issued  to  a  contractor  for 
construction  and  in  excess  of  the  true  value,  was  not  the  true 
measure  or  guide  in  determining  valuation.  The  cost  of  the 
tangible  property,  it  was  said,  must  be  diminished  by  deprecia- 
tion; and  it  was  intimated  that  the  company  should  have  the 
benefit  of  any  appreciation  of  the  tangible  property. 

In  the  Consolidated  Gas  case,  212  U.  S.  19,  53  L.  Ed.  382,  de- 
cided at  the  same  term  (0909),  involving  the  rates  of  gas  com- 
panies in  New  York,  the  court  said  that  the  value  of  the  prop- 
-erty  was  to  be  determined  as  of  the  time  when  the  inquiry  was 


I    160]  THE  INTERSTATE  COMMERCE  ACT.  255 

made  regarding  rates,  and  that  if  the  property  which  legally 
entered  into  the  consideration  of  the  question  of  rates  had  in- 
creased in  value  since  it  was  acquired  the  company  was  entitled 
to  the  benefit  of  such  increase.  It  added,  however,  that  while 
such  was  the  general  rule  there  might  be  an  exception  where  the 
property  may  have  increased  so  enormously  in  value  as  to  render 
a  rate  permitting  a  reasonable  return  upon  such  increased  valuo 
unjust  to  the  public. 

§  169.  The  unearned  increment  in  valuation  of  railroad  prop- 
erty in  rate  regulation. — In  the  Advance  Rate  Case  (February 
22,  lull)  it  was  contended  by  the  Biu'lington  railroad,  one  of 
the  applicants  for  the  increased  rate,  Western  Trunk  Line  Case, 
20  I.  C.  C.  R.  307,  that  it  was  entitled  as  a  matter  of  legal  right 
to  a  fair  return  upon  the  actual  value  of  its  property  used  for 
transportation,  which  value,  from  whatever  source  in  the  past 
created,  is  measured  in  its  ease  by  at  least  the  cost  of  presently 
reproducing  its  physical  plant.  To  obtain  such  fair  return,  it 
claimed  the  right  to  charge  ratio  of  transportation  which,  sub- 
ject to  the  one  limitation  that  the  particular  rates  are  themselves 
reasonable  and  just  to  the  shipper,  will  produce  such  reasonable 
return  upon  the  property  employed.  It  was  claimed  that  largely 
through  the  increased  value  of  its  real  estate  holdings  as  well  as 
through  the  putting  of  earnings  of  the  company  into  the  property 
the  actual  fair  value  of  the  railroad  far  exceeded  its  capitaliza- 
tion and  that  therefore  it  was  entitled  to  freight  increase  as  a 
reasonable  return  upon  the  actual  value  of  the  property. 

But  the  conunission  declined  to  admit  this  contention  and  said 
whatever  the  true  economic  or  legal  view  may  be  as  to  the  right 
of  a  carrier  to  consider  the  increase  in  value  of  its  land  as  a  part 
of  the  value  upon  which  it  is  entitled  to  a  reasonable  return, 
such  increase  in  value  does  not  of  itself  establish  the  right  of  a 
carrier  to  increase  the  rate  upon  a  given  service. 

The  conunission  said  it  was  yet  to  be  decided  that  a  public 
agency  created  by  public  authority  may  continuously  increase 
its  rates  in  proportion  to  the  increase  of  its  value  either  (1)  be- 
cause of  betterments  which  are  made  out  of  income  or  (2)  be- 
cause of  the  growth  of  the  property  in  value  due  to  the  increase 
in  value  of  the  land  which  the  company  owns. 


256  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    1 

§  170.  The  relation  of  railroad  rate  to  investment  of  earnings 
in  property. — It  was  ruled  by  the  supreme  court  in  Illinois, 
Central  E.  Co.  v.  Comiuission,  206  U.  S.  441,  51  L.  Ed.  1128 
(1907),  affirming  the  order  of  the  commission  in  10  I.  C.  C.  R. 
505  (the  Yellow  Pine  Association  Case),  that  improvements 
wliieh  add  to  the  permanent  value  of  the  property,  and  are  paid 
from  earning.<*  are  not  properly  charged  to  operating  expenses  in 
determination  of  the  reasonableness  of  rates. 

The  court  said  it  would  seem  as  if  "expenditures  for  additions 
to  construction  and  equipment,  as  expenditures  for  original 
construction  and  equipment,  should  be  reimbursed  by  all  of  the 
traffic  they  accomodate  during  the  period  of  their  duration,  and 
improvements  that  will  last  many  years,  should  not  be  charged 
against  the  revenue  of  a  single  year."  The  court  distinguished 
the  Union  Pac.  R.  R.  Case,  99  U.  S.  402,  25  L.  Ed.  274,  as  not  in- 
volving rates,  or  the  rights  of  shippers. 

In  the  Advance  Rate  Case  in  Official  Classification  Territory, 
20  I.  C.  C.  243  (Feb.  1911;  see  infra,  §  376),  the  commission 
said  that  tliis  principle  seemed  to  apply  also  to  non-revenue  pro- 
ducing improvements,  forced  by  public  demand,  such  as  ex- 
pensive passenger  stations,  abolition  of  grade  crossings  in  cities, 
adoption  of  safety  appliances  and  the  like.  It  was  suggested 
however  that  while  this  seemed  to  be  the  law,  public  policy 
might  under  some  conditions  lead  to  a  different  conclusion,  so 
far  as  favoring  the  accumulation  of  surplus  from  earnings  in 
improving  a  system.  The  question  whether  the  investment  from 
earnings  belonged  to  the  public  or  to  the  stockholders  was  not 
determined;  the  commission  saying  "until  the  status  of  this 
surplus  is  determined  by  legislative  action  or  judicial  interpre- 
tation, this  commission  cannot  properly  permit  an  advance  in 
rates,  with  the  intent  to  produce  an  accumulation  of  surplus  for 
this  purpose." 

§  171  (130).  Reasonableness  under  sections  1  and  3. — The 

reasonableness  of  rates  under  section  1  must  be  distinguish! ed 
from  undue  and  unreasonable  preferences  of  localities,  which 
are  prohibited  by  section  3.  Thus  it  was  held  in  Commission  v. 
N.  C.  &  St.  L.  R.  Co.,  120  Fed.  934  (1903),  that  a  finding  of  un- 
reasonableness under  section  1  could  not  be  established  merely 
by  a  proof  of  a  violation  of  section  3.    That  is,  that  a  rate  may 


§    172]  TI1F-:    INTKRSTATE    COMMERCE    ACT.  257 

be  reasonable  2><3r  .se  and  still  be  unduly  preferential  of  a  lo- 
cality, and  thus  be  violative  of  section  3.  A  rate  which  is  unrea- 
sonable, however,  2^cr  sc,  may  be  shown  by  the  same  facts  to  be 
unduly  preferential  of  the  locality  as  compared  witli  other  lo- 
calities.   Sec  infra,  section  3. 

§  172  (131).  Consideration  of  reasonableness  in  the  courts. — 

In  Coiiiiiiissioii  \'.  Soiiilicfii  Ixailwiiy  ( "o..  117  l''i'il.  741  (lIJ02),thG 
circuit  coui-t  of  the  Avestern  district  of  Virfi:inia  said  that  in  de- 
terming  the  issue  as  to  whether  rates  to  and  from  a  city  were 
unjust  and  unreasonable  in  themselves,  the  greatest  weight 
should  be  given  to  the  opinion  of  cxi)ert  witnesses,  the  effect  of 
the  rates  charged  upon  the  growth  and  prosperity  of  the  city, 
the  cost  of  transi)ortation  as  compared  with  the  rates  charged 
and  the  rates  in  force  to  other  cities  where  the  circumstances  are 
as  nearly  the  same  as  ma.y  be.  In  this  case  the  court  refused  to- 
enforce  an  order  of  the  commission  directing  reduction  of  rates 
to  Danville,  Virginia.    122  Fed.  800  (1903). 

In  Commission  v.  L.  &  N.  R.  Co.,  118  Fed.  613  (1902),  the  court 
found  that  the  rates  to  Savannah  from  certain  points  on  the 
Pensacola  division  of  the  Louisville  &  Nashville  road  were  un- 
reasonable and  said  that  they  could  not  be  justified  by  the  con- 
tention that  the  railroad  company  had  been  building  up  a  port 
and  thus  securing  a  longer  haul.  The  court  said  that  rates  un- 
reasonable in  themselves  could  not  be  justified  by  considerations 
of  this  character.  In  this  case  an  advanced  rate  filed  with  the 
Interstate  Commerce  Commission  and  put  into  effect  pending 
the  hearing  before  the  commission  on  the  legality  of  the  rate 
previously  in  force,  was  held  properly  before  the  commission  on 
such  hearing. 

On  the  issue  of  reasonableness  in  rates,  the  sworn  return  of 
the  officers  of  the  road  made  to  state  authorities  for  the  purposes 
of  taxation  is  admissible  but  not  conclusive.  L.  &  N.  R.  Co.  v. 
Brown,  123  Fed.  946  (1903^. 

In  Commission  v.  Lehigh  Valley  R.  Co.,  74  Fed.  784  (1896).  the 
court  said  that  the  fact  that  the  cost  of  carriage  of  all  the  coal 
of  an  entire  railroad  system  from  all  points  of  the  shipment  to 
all  destinations  was  a  certain  per  cent,  of  the  gross  receipts  from 
coal  did  not  justify  the  conclusion  that  on  a  particular  line  of 
part  of  the  system  the  cost  of  carriage  bore  the  same  relation  to 
17 


258  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    1 

the  gross  receipts  of  the  whole  line,  and  that  the  commission 
erred  in  holding  the  contrary  theory. 

The  carriage  of  expensive  merchandise  is  entitled  to  greater 
compensation  than  that  of  cheap  goods.  Commission  v.  D.  L.  & 
W.  R.  Co.,  64  Fed.  723  (1SD4). 

§  173  (132).  Rulings  of  the  commission  upon  the  reasonable- 
ness of  rates. — The  commission,  though  prior  to  1906  it  had  no 
power  to  determine  what  rate  a  railroad  should  charge,  has  dur- 
ing the  whole  period  of  its  existence  been  vested  with  the  im- 
portant jurisdiction  of  investigating  and  determining  whetlier 
rates  are  reasonable  or  unreasonable.  The  supreme  court  has  in 
several  cases  wherein  it  differed  from  the  commission  in  the  con- 
clusions of  law  as  to  the  construction  of  the  act,  remanded  the 
cases  to  tlie  commission  for  its  own  investigation  upon  the  ques- 
tion of  t.jie  reasonableness  of  the  rates,  or  has  entered  judgment 
without  prejudice  to  the  commission's  right  to  re-investigation 
of  the  question  of  reasonableness  of  the  rates.  Interstate  Com. 
Com.  V.  Clyde  Steamship  Co.,  181  U.  S.  33,  45  L.  Ed.  731  (1901)  ; 
L.  &  N.  R.  R.  Co.  V.  Behlmer,  175  U.  S.  676,  44  L.  Ed.  409,  supra. 

In  many  cases  tJie  conclusions  of  the  commission  have  been 
accepted  and  acted  upon  by  the  railroad  companies  in  the  ad- 
justment of  their  rates,  and  though  its  conclusions  may  be 
recommendations  and  not  judgments,  they  none  the  less  have 
a  permanent  value  and  constitute  a  body  of  the  administrative 
law  on  this  difficult  question  of  railroad  administration.  The 
opinions  and  conclusions  have  the  greater  weight  from  the  char- 
acter of  the  membership  since  the  organization  of  the  commission, 
and  from  the  thoroughness  of  its  investigation,  as  evidenced  by 
the  opinions. 

Under  the  enlarged  jurisdiction  of  the  commission  under  the 
acts  of  1906  and  1910.  its  rulings  have  vastly  increased  in  im- 
portance. 

Tn  the  recent  ruling  denying  the  advances  in  rates  in  the 
Western  Traffic  Line  Cases,  supra,  the  commission  summarized 
its  powers,  saying:  "It  is  doubtless  true  that  in  its  control  over 
the  charges  which  the  railroads  make,  this  commission  exercises 
a  power  so  extensive  as  to  justify  the  broadest  consideration  of 
the  economic  and  financial  effects  of  its  orders,  but  the  govern- 
ment has  not  undertaken  to  become  the  directing  mind  in  rail- 


§    174]  THE   INTERSTATE    COMMERCE   ACT.  2o0 

road  niaiiautcment.  This  comniis'.sion  is  not  a  general  manafjicr  of 
the  railroads,  and  no  matter  wliat  the  revenue  the  carriers  may 
reeeive  tliere  can  be  no  control  placed  by  the  commission  upon 
its  expenditure,  no  illlpro^■ements  directed,  and  no  economies 
enforced." 

In  the  same  opiuion  the  basis  of  tlie  policy  in  the  more  con- 
gested portions  of  the  coiuitry  as  to  rates  was  stated  as  folhnvs: 
"First,  a  basic  chissification  of  commodities  with  rehition  to 
their  relative  value,  bulk,  fragility,  and  other  proper  transpor- 
tation considerations,  upon  which  is  built  a  wisely  balanced 
f-chedule  of  charges  fixed  w^th  reference  to  well-defined  zones 
of  distributive  territory;  and,  beneath  these,  those  special  rates 
on  certain  commodities  as  to  wliich  the  public  need  demands 
that  exceptions  shall  be  made." 

In  14  1.  0.  C.  R.  376,  the  commission  said  it  had  no  authority 
to  establish  general  rate  schedules,  but  nmst  deal  with  the  inter- 
state rates  of  this  country  which  had  not  been  established  upon 
any  definite  theory  as  it  finds  them.  "VYhat  the  commission  takes 
off  in  one  place,  it  cannot  add  in  another.  Unless,  therefore,  the 
general  result  of  all  rates  is  to  yield  an  undue  revenue  to  the 
carrier,  the  commission  should  not  reduce  a  particular  rate 
simply  because  it  might  have  thought  in  establishing  that  rate 
de  novo  as  part  of  a  genei-al  scheme  it  ought  to  be  somewhat 
lower  or  somewhat  higher  in  proportion  to  the  others.  The  rate 
attacked  must  be  so  out  of  proportion  as  to  be  unreasonable  and 
must  so  discriminate  as  to  be  undue  and  unlawful  as  to  some 
other  rates.  This  case  involved  the  rates  upon  live  stock  from 
Iowa  points  to  Chicago,  and  the  commission  thought  that  while 
the  general  level  of  the  rates  ought  not  to  be  reduced,  that  the 
groupings  of  territory  wherein  the  specific  rates  were  etfective 
should  be  revised. 

§  174.  Limitations  of  the  commission's  power  in  fixing  rates. 
While  it  is  recognized  that  neither  the  commission  nor  any  pub- 
lic regulative  body  can  reduce  rates  below  what  is  termed  the 
confiseatoiy  limit,  that  is,  so  as  to  deny  the  carrier  a  reasonable 
return  ui/ou  the  p)-operty  devoted  to  the  public  service,  its 
power  is  also  limited,  in  that  in  determining  the  reasonableness 
of  a  rate,  it  cannot  reduce  a  reasonable  rate  for  the  sake  of  en- 
couraging or  protecting  any  business  interest  of  the  shippers. 


260  THE    INTERSTATE    COMMERCE    ACT.  [SECTION   1 

This  was  illustrated  in  the  ruling  of  the  supreme  court  in  South- 
ern Pacific  Railroad  v.  Interstate  Commerce  Conunission,  219 

U.  S,  433,  55  L.  Ed. (1911),  reversing  the  circuit  judges  of 

the  ninth  circuit  in  177  Fed.  963,  which  had  enforced  an 
order  of  the  commission,  1-4  I.  C.  C.  R.  61,  which  directed  the 
railroad  to  reduce  the  rate  on  lumber  from  the  Willamette  Val- 
ley points.  The  court  said  the  commission  had  no  power  to  fix 
rates  upon  the  assumption  that  it  had  the  right  to  protect  the 
lumber  interests  from  the  consequences  of  a  change  in  rates, 
even  if  the  change  was  from  a  rate  which  had  been  fixed  unrea- 
sonably low  for  the  purpose  of  encouraging  the  industry,  though 
the  higher  rate  thus  reduced  was  not  in  itself  unjust  or  unrea- 
sonable. 

To  the  same  effect  is  the  ruling  by  the  commerce  court  (October 
5,  1911, Fed. }  in  the  Arlington  Heights  Fruit  Associa- 
tion Case,  where  the  court  said  that  the  commission  had  no  power 
to  protect  the  lemon  industry  of  California  against  foreign  com- 
petition, and  as  the  order  of  the  commission  in  19  I.  C.  C.  R.  148, 
was  based  primarily  on  such  assumed  authority,  it  was  void. 

It  seems  from  the  opinions  in  these  cases  that  if  the  commission 
had  based  its  orders  upon  findings  that  the  rates  were  unreason- 
able per  se,  and  that  the  reduction  was  necessary  to  make  them 
reason'able  per  se,  such  conclusion  of  the  commission  would  not 
have  been  disturbed. 

§  175  (134).  Presumptions  of  reasonableness  from  estab- 
lished rates. — In  the  determination  of  such  an  indefinite  prob- 
lem as  the  reasonableness  per  se  of  a  given  rate,  dependence 
must  necessarily  be  had  upon  the  presumptions  of  fact  which 
the  circumstances  afford  rather  than  on  those  of  law. 

Thus  it  is  ruled  that  the  long  continuance  of  a  rate  is  an  ad- 
mission of  reasonableness;  and  where,  in  reliance  upon  existing 
rates,  capital  has  been  invested  and  industrial  conditions  es- 
tablisiied,  such  rates  cannot  be  discontinued  without  taking  into 
account  its  effect  upon  these  commercial  and  industrial  condi- 
tions (15  I.  C.  C.  R.  59)  :  but  voluntary  reduction  of  a 
rate  is  unreasonable  (15  I.  C.  C.  R.  11),  nor  is  there  a  presump- 
lower  rate  via  one  line  is  not  conclusive  evidence  of  unreasonable- 
because  of  the  long  continued  maintenance  of  a  lower  rate  (17  I. 
C.C.  R.  313). 


§    177]  THE   INTERSTATE   COMMERCE   ACT.  2G1 

There  may  be  an  inference  of  unreasonableness  in  a  voluntary 
reduction  of  rates  by  a  carrier,  but  not  conclusive,  8  I.  C.  C.  K. 
561.  For  presumi)tion  of  unreasonableness  from  change  of 
rates  by  carriers,  sec  G  I.  C.  C.  R.  295. 

After  a  rate  has  been  raised  by  a  carrier,  it  is  still  presiuned 
to  be  reasonable  until  shown  to  be  unreasonable,  excepting  in 
cases  under  the  amendment  of  1910,  whereunder  the  carrier  is 
compelled  to  prove  tlie  reasonablenss  of  the  increased  rate.  A 
lower  rate  via  one  Hue  is  not  conclusive  evidence  of  unreasonable 
uess  of  higher  rate  by  another  line.  15  I.  C.  C.  R.  107, 15  I.  C.  C. 
R.  49. 

As  to  absence  of  legal  presumption  of  reasonableness  from 
publication  of  rate,  see  Yellow  Pine  rate  case,  206  U.  S.  441, 
supra. 

§  176  (133).  The  burden  of  proof. — It  necessarily  follows 
from  this  presumption  of  reasonableness  of  the  existing  statutes 
that  the  party  complaining  has  the  burden  of  proof  to  show  un- 
reasonableness. The  commission  has  uniformly  ruled  that  rates 
cannot  be  declared  unreasonable  where  no  proof  is  offered  but 
that  of  coniparison.  I.  C.  C.  R.  230,  and  1  Int.  Com.  Rep.  627. 
A  rate  is  not  unreasonably  simple  because  a  lower  rate  is  in 
effect  on  lines  of  other  cairiers.  17  I.  C.  C.  R.  286.  Parties  com- 
plaining must,  therefore,  make  proof  of  unreasonableness  in 
hearings  before  the  commission. 

As  to  the  burden  of  proof  on  justification  of  increases  under 
amendment  of  1910,  see  infra,  sec.  15. 

§  177.  Considerations  in  the  determination  of  reasonableness. 
The  comuiission  has  ruled  (see  13  I.  C.  C.  R.  651),  that  a  carrier 
has  no  right  to  attempt  to  dictate  the  use  to  which  commodities 
transported  by  it  shall  be  put;  or  to  fix  the  rate  for  one  use 
higher  than  where  the  commodity  is  shipped  for  a  different  use. 
In  this  case  the  railroads  sought  to  impose  a  higher  rate  upon 
nitrate  of  soda  when  used  for  the  manufacture  of  explosives  than 
when  used  for  fertilizers. 

The  commission  canuot  accept  as  conclusive  any  stipulation 
of  parties  as  to  the  reasonableness  of  rates,  16  I.  C.  C.  R.  426. 
The  conclusions  of  the  commission  on  such  matters  must  be 
reached  with  a  due  consideration  for  the  conclusions  which  it  has 


262  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    1 

already  announced  on  the  same  subject,  and  for  the  knowledge 
Avliicli  it  has  o'athered  -with  relation  thereto  in  other  cases.  The 
willingness  of  the  shi])per  to  receive,  and  of  the  carrier  to  pay, 
reparation  upon  certain  traffic  and  under  certain  rates,  can  be 
approved  by  the  commission  only  under  a  clear  and  decisive 
sliowing  of  facts  which  wonld  lead  the  commission  to  award  such 
reparation  in  opposition  to  the  carrier's  wishes. 

It  was  said  in  17  I.  C.  C.  R.  15,  that  agreements  covering 
rates  could  be  evidence  of  an  admission  as  between  the  parties 
executing  it  and  has  strong  evidentiary  value  that  the  rate  agreed 
upon  is  reasonable.  The  rate  which  was  advanced  as  the  result 
of  an  agreement  among  carriers,  even  if  such  agreement  was 
under  color  of  violation  of  the  Anti-Trust  Act,  will  not  on  that 
account  alone  be  declared  imreasonable,  12  I.  C.  C.  R.  451.  Evi- 
dence of  such  \dola1ion  is  pertinent,  but  the  existence  of  such 
unlawful  agreement,  even  when  proved,  is  not  conclusive  of  the 
unreasonableness  of  the  rate  so  advanced. 

§  178.  What  is  a  reasonable  rate. — A  just  and  reasonable 
rate  is  neither  the  minimum  charge  that  can  be  made  for  the  serv- 
ice and  permit  tlie  carrier  to  live,  neither  is  it  the  maximum 
charge  that  can  be  borne  by  the  shipper.  An  absolute  rate  may 
possibly  be  also  a  just  and  reasonable  rate  but  the  presumptions 
are  against  it  by  reason  of  its  inflexibility.  Between  the  mini- 
mum and  maximum  limitations,  rates  to  be  just  and  reasonable 
should  l3e  flexible  and  should  permit  compliance  with  sections  2 
and  3  of  the  act  forbidding  discriminations,  as  well  as  section  4 
with  respect  to  long  and  short  hauls.  Assume  that  the  out  of 
pocket  cost  to  the  carrier  for  any  transportation  is  10  cents,  as- 
sume further  that  the  traffic  would  not  move  if  the  rate  were 
fixed  as  high  as  30  cents.  In  such  a  case  a  rate  of  10  cents  or- 
dered by  a  commission  would  amount  to  confiscation  of  the  car- 
rier's property  and  a  rate  of  30  cents  would  be  injurious  to  both 
carrier  and  shipper.  A  rate  of  11  cents  in  such  a  case  would 
permit  of  a  large  movement  and  whether  it  would  be  compensa- 
tory to  the  carrier  or  not  would  depend  upon  the  carrier 's  finan- 
cial condition  and  whether  the  increased  movement  fell  short 
of  over-taxing  the  carrier's  facilities.  If  a  rate  of  20  cents  under 
such  conditions  permitted  reasonably  free  movement  of  the 
traffic,  and  if  a  rate  of  15  cents  yielded  some  approach  to  a  fair 


§  179]  TiJi:  ix'J'i:r.state  commerce  act.  2^3 

reUirn  nj^on  the  carrier's  investment,  the  reasonable  rate  might 
be  fixed  at  anything  bctveen  these  two  figures.  In  the  Western 
Advance  Rate  Case,  50  I.  C.  C.  R.  307,  on  pages  347,  348,  the 
commission  said: 

"Tlius  we  return  to  tlie  question,  What  is  the  reasonable  rate 
that  shall  be  charged  to  the  shipper?  The  legislature  may  not 
make  rates  so  as  to  confiscate  the  carrier's  property.  The  car- 
rier, on  tlio  otlicr  hand,  may  not  make  rates  which  are  unjust  to 
those  who  by  economic  necessity  are  compelled  to  employ  its 
services.  ITere,  then,  we  have  tlie  minimmn  of  legislative  power 
and  the  maximum  of  the  carrier's  power.  Between  these  lies  a 
zone,  indefinite  and  variable.  AVithout  question  the  carrier  will 
tend  toward  the  maximum,  v,iiile  governmental  authority  will 
be  inclined — in  fact,  has  been  created — to  repress  its  upward 
tendency.  One  moves  inevitably  upward  to  the  highest  rate 
which  the  traffic  will  bear;  the  other  attempts  to  di.scover  some 
relation  between 'charge  for  service  and  cost  of  service." 

There  is  clearlj^  a  zone  of  reasonableness  within  which  any  rate 
is  compensatory  or  just  and  reasonable  to  the  carrier  and  fair 
to  the  shipper,  or  just  and  reasonable  to  the  public.  Within 
this  reasonable  zone,  for  any  particular  traffic,  rates  as  between 
dil't'erent  localities  are  to  be  adjusted  with  regard  to  each  other 
to  comply  with  other  sections  of  the  act. 

§  179.  Res  judicata  with  respect  to  rates. — There  can  be  no 
such  thing  as  res  judicata  in  respect  to  rates.  In  practice,  how- 
ever, the  publication  and  maintenance  of  a  rate  by  a  railroad 
estops  it,  ordinarily,  from  denying  that  the  rate  so  published  is 
just  and  reasonable,  or  compensatory  so  far  as  the  carrier  is 
concerned ;  by  the  act  the  orders  of  the  commission  with  respect 
to  ratios  expire  after  a  period  of  two  years;  and  the  finding  or 
order  of  the  commission  or  the  action  of  a  carrier  on  its  own  initi- 
ative is  merely  declaratoiy  of  what  the  rate  ought  to  have  been 
in  the  past,  or  what  it  shall  be  for  the  immediate  future  and  is 
always  subject  to  revision.  In  19  I.  C.  C.  R.  34,  the  commission 
said:  "It  ought  to  be  perfecth'  apparent  that  rates  which  are 
reasonable  at  the  present  time  may  Mithin  a  period  of  two  years 
become  very  unreasonable,  by  reason  of  changes  in  circumstances 
and  conditions,  economic,  transportation  or  the  like.  It  should 
be  just  as  apparent  that  a  rate  which  was  unreasonable  two  years 


264:  THE    INTERSTATE    COMMERCE    ACT.  [SeCTIOX    1 

or  more  ago  may  become  reasonable  by  reason  of  such  changes  in 
L-onditions.  TVe  think  the  plea  of  estoppel  bj'-  reason  of  former 
adjudication  is  not  good  insofar  as  the  present  rates  on  these 
articles  are  concerned." 

§  180  (128).  Through  rates  and  local  rates. — The  distinc- 
tion between  the  through  and  local  services  of  a  railroad,  i.  e.  its 
reasonable  right  to  make  the  local  rates  greater  than  the  propor- 
tionate part  of  a  through  rate  over  the  same  distance,  has  been 
recognized  in  the  decisions  of  the  commission  and  also  of  the 
courts.  The  distinction  has  also  been  considered  in  the  state 
rate  case  (see  supra,  §  126),  as  the  through  rates  are  usually, 
but  not  always,  interstate  rates,  and  local  rates  are  usually  intra- 
state; but  not  infrequently,  as  when  great  cities  are  contiguous 
to  state  lines,  such  local  rates  are  interstate. 

As  to  the  comparative  cost  of  local  business  as  compared  with 
t.hrough  business,  see  South  Dakota  Rate  Case,  176  U.  S.  167,  44 
L.  Ed.  417,  and  the  ^Minnesota  Kate  Case,  186  U.  S.  257,  46  L. 
Ed.  3151.  In  the  latter  case  it  was  claimed  by  the  carrier  that 
the  sum  of  two  admittedly  reasonable  local  rates  could  not  be 
unreasonable  as  a  through  rate  between  two  designated  points. 
But  the  court  said  that  the  practice  of  railroads  in  this  country 
was  almost  universally  to  the  contrary,  the  through  rate  being 
almost  invariably  less  than  the  sum  of  the  locals. 

See  also  discussion  of  through  and  local  rates  in  Augusta  S. 
R.  Co.  V.  AVrightsville,  74  Fed.  522  (1896.) 

The  commission  has  discussed  this  distinction  in  a  number  of 
cases,  and  has  uniformly  held  that  the  through  rate  should  be 
less  than  the  sum  of  the  local  rates.  3  I.  C.  C.  R.  252,  2  Int. 
Com.  604;  8  I.  C.  C.  R.  377;  9  I.  C.  C.  R.  17;  7  I.  C.  C.  R.  323; 
6  I.  C.  C.  R.  488. 

Through  rates  and  through  billing  are  matters  of  agreement 
among  carriers  engaged  in  interstate  commerce,  excepting  where 
established  by  order  of  the  commission;  and  when  they  have  been 
established  and  entered  or  finally  abrogated  or  changed  they  are 
required  by  the  statute  to  be  kept  open  for  public  use.  See  infra, 
sec.  6,  and  9  I.  C.  C.  R.  182. 

Through  rates  are  not  required  to  be  made  on  a  mileage  basis 
nor  local  rates  corresponding  with  the  division  of  a  joint  through 
rate  over  tlie  same  line.    INlileage,  however,  is  usually  an  element 


§    181]  THE   INTERSTATE    COMMERCE   ACT.  205 

of  importance,  and  due  regard  to  distance  and  proportions  are  to 
be  observed  in  connection  with  other  considerations.  They  are 
material  in  fixing  transportation  charges.  3  I.  C.  C.  R.  252,  2 
Int.  Com.  Rep.  604 ;  8  I.  C.  C.  R.  377. 

A  rate  is  none-the-less  a  through  rate  in  law,  because  the  initial 
carrier  charges  its  local  rate  as  part  of  the  through  rate  and  the 
remaining  lines  charge  an  agreed  rate  made  by  percentage. 

While  there  is  no  mileage  requirement  in  the  act  other  than 
what  may  be  required  in  the  long  and  short  haul  rule  in  sec.  4 
and  the  general  requirement  of  reasonableness,  as  a  rule  in  the 
transportation  of  freight  of  railroads,  while  the  aggregate  charge 
is  continually  increasing  the  further  the  freight  is  carried,  the 
rate  per  mile  is  constantly  growing  less,  making  the  aggregate 
charge  less  in  proportion  every  hundred  miles  after  the  first,  aris- 
ing out  of  the  character  and  cost  of  the  service ;  and  thus  staple 
commodities  and  merchandise  are  enabled  to  bear  the  charges 
from  and  to  the  most  distant  portions  of  the  country.  1  I.  C. 
C.  R.  480  and  1  Int.  Com.  Rep.  764;  2  I.  C.  C.  R.  315  and  2 
Int.  Cora.  Rep.  190.  On  this  general  rule  as  to  local  rates, 
3  I.  C.  C.  R.  450,  and  2  Int.  Com.  Rep.  721 ;  1  I.  C.  C.  R.  152  and 
1  Int.  Com.  Rep.  356 ;  6  I.  C.  C.  R.  488 ;  8  I.  C.  C.  R.  277 ;  2  I.  C. 
0.  R.  584,  and  2  Int.  Com.  Rep.  414;  7  I.  C.  C.  R.  323. 

This  admitted  right  of  carriers  to  fix  through  rates  on  a  lower 
relative  br.sis  than  local  rates  has  led  not  only  to  the  allowance 
of  the  through  rate  for  commodities  manufactured  enroute,  as 
in  milling  in  transit  and  compressing  in  transit  privileges,  but 
also  to  illegitimate  devices  to  secure  such  lower  through  rate. 
See  milling  in  transit,  infra,  sections  2  and  3  of  the  act. 

AYhile  the  commission  has  uniformly  said  that  the  through 
rates  should  not  exceed  the  sum  of  the  locals,  it  has  made  no 
general  rule  on  the  subject,  see  12  I.  C.  C.  R.  498;  and  each  case 
must  be  disposed  of  upon  its  merits. 

§  181.  Reasonableness  in  commutation  rates. — In  -what  is 
known  as  tlie  Communation  Rate  Case  (21  I.  C.  C.  R.  428).  the 
commission  in  an  interesting  opinion  considered  the  origin  and 
histo7'y  of  commutation  fares  and  the  distinction  between  such 
traffic  and  other  passenger  traffic,  and  reached  the  conclusion 
that  the  commutation  traffic  stands  by  itself  as  a  special  and 
distinct  kind  of  service  for  which  the  carrier  may  demand  no 


266  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    1 

more  lliau  a  reasonable  compensation.  The  case  involved  tlie 
commutation  rates  on  the  different  railroads  doing  a  commuta- 
tion business  in  the  vicinity  of  New  York.  All  the  railroads- 
denied  the  autliority  and  jurisdiction  of  the  commission  over 
the  reasonableness  of  commutation  fares,  basing  their  contention 
on  the  language  of  section  22  of  the  act,  which  provides  that 
"nothing  in  the  act  shall  prevent  *  *  *  the  issuance  of  mileage, 
excursion  and  commutation  passenger  tickets. ' '  It  was  admitted, 
however,  that  such  fares  was  subject  to  sections  2,  3  and  4  of  the 
act.  The  commission  said  that  commutation  rates  were  peculiar, 
in  that  suburban  homes  had  been  established  and  communities 
built  up  in  reliance  upon  reasonable  commutation  service.  The 
commission  reached  the  conclusion  that  while  the  service  was 
peculiar,  it  was  a  special  and  distinct  kind  of  service  for  which 
the  carrier  coald  demand  no  more  than  a  reasonable  compensa- 
tion. The  new  comnmtation  fares  of  the  Pennsylvania  Railroad 
Company  were  held  to  be  excessive,  but  those  of  the  other  rail- 
roads were  not  found  to  be  unreasonable,  except  in  particular 
cases  specified. 

§  182  (139).  Relation  of  interstate  to  state  rates. — The  rela- 
tion of  the  interstate  to  state  rates,  where  the  carrier  is  doing 
business  with  the  same  track  and  equipment  under  the  regula- 
tions of  two  sovereignties  in  our  complex  form  of  government, 
has  been  considered,  see  supra,  Part  I,  Chapter  VII.  The 
act  to  regulate  commerce  contains  no  provision,  whereby  inter- 
state rates  must  be  reduced  because  intrastate  rates  are  lowered 
by  state  commissions  (7  I.  C.  C.  R.  601)  ;  nor  are  §tate  rates  re- 
quired to  be  lovcered  because  of  the  reduction  of  interstate  rates. 
It  was  said  by  the  commission  (15  1.'  C.  C.  R.  29)  that  no  greater 
sanctity  is  presumed  in  favor  of  rates  established  by  state  railroad 
commissions  than  of  those  voluntarily  established  by  the  carriers 
themselves ;  but  when  the  commission  is  asked  to  examine  an  inter- 
state rate,  similar  rates  established  by  state  authority  in  that  ter- 
ritory must  have  great  influence,  especially  when  they  have  been 
long  accjuiesced  in  by  the  carriers.  (14  I.  C.  C.  R.  376.)  Still, 
those  state  rates  have  no  binding  force  upon  the  commission.  They 
are  standards  of  greater  or  less  value,  according  as  they  appear 
to  be  just  and  reasonable.    As  to  the  competitive  effect  of  state 


§    184]  THE   IXTERSTATK    CO.MMEKCE   ACT.  267 

imposed  rntos  ni>on  iiilci-sfjito  traffic,  and  tlie  diverse  rulings  of 
the  federal  circuit  courts  thereon,  see  Part  I.  supra,  ^110. 

§  183.  Rates  as  affected  by  the  development  of  the  country. — 

In  a  rapidly  dev('h)piii.tf  territory,  the  ehanj^cd  cojKlitions  created 
by  the  growth  of  population  and  business  may  necessitate 
chanc:es  in  rates  to  meet  thef^e  altered  conditions.  Tiiis  has  been 
illustrated  in  the  recent  rulings  of  the  commission  reducing  the 
Interstate  Class  Rates  from  Seattle,  T'acoma  and  Portland  to 
Idaho,  "Washington  and  ^Montana,  19  I.  C.  C.  R.  2G5;  and  also 
the  rates  between  ^Mississippi  river  and  ]Missouri  river  to  Utah 
points,  19  I.  C.  C.  R.  218.  See  also  19  I.  C.  C.  R.  238,  where 
points  in  the  western  defined  territory  to  points  in  Nevada  were 
unreasonable.  Some  of  these  cases  involved  the  long  and  short 
haul  rule,  see  fourth  section,  infra.  Rates  to  the  coast  had  been 
fixed  by  water  competition,  and  the  rates  to  the  interior  were 
made  by  adding  locals  to  these  through  rates.  The  commission 
said  in  19  I.  C.  C.  R.  238,  that  the  manufacturing  center  of  the 
country  had  moved  westward,  and  the  Atlantic  routes  which 
were  once  necessitated  are  now  almost  unused.  The  commission 
said  the  time  had  come  in  their  opinion  when  the  carriers  west 
of  the  Rocky  i\rountains  must  treat  the  intermountain  country 
upon  a  different  basis  from  that  wdiich  had  theretofore  obtained. 
See  also  19  I.  C.  C.  R.  162,  holding  the  rates  from  Spokane  to 
St.  Paul  and  Chicago  were  unreasonable.  See  15  1.  C.  C.  R.  376. 
Those  cases  involve  not  only  the  reasonableness  of  the  rates 
per  se,  but  also  the  alleged  preference  in  violation  of  sections 
3  and  4,  see  infra,  §  294. 

§  184.  The  commission  on  the  interdependence  of  rates. — 

The  commission  has  also  considered  the  position  of  strong  com- 
panies with  good  credit  and  weak  companies  with  embarrassed 
credit,  competing  for  business  between  the  same  points,  and 
it  was  held  that  it  would  be  unjust  to  the  shipper  to  base  rates 
upon  the  needs  of  the  weaker  road.  In  11  I.  C.  C.  R.  238  (1905), 
in  an  investigation  of  the  class  and  commodity  rates  from  St. 
Louis  to  Texas  points,  it  declined  to  interfere  with  the  advance 
made  by  the  railroads,  on  the  ground  that  their  financial  condi- 
tion at  that  time  was  not  favorable.  It  was  said  in  the  Utah 
cases,  19  I.  C.  C,  R.  218,  where  expensively  built  mountain  roads 


268  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    1 

were  under  consideration,  that  in  fixing  a  rate  the  commission 
would  not  look  exclusively  to  that  line  which  could  handle  the 
business  cheapest  or  which  was  the  strongest  financially,  but 
would  consider  the  weaker  rival ;  but  it  did  not  consider  that  the 
rates  should  be  fixed  with  reference  to  the  weakest  line,  and  it 
would  certainly  be  unjust  to  the  public  in  deciding  these  rates 
to  consider  mereh'  the  expensive  and  circuitous  routes. 

§  185.  The  commerce  court  on  the  interdependence  of  rates. 

The  newly  established  United  States  commerce  court  in  one  of. 
its  earliest  opinions,  in  Receivers  &  Shippers  Association  of  Cin- 
cinnati V.  The  Commission  (July  1011),  in  sustaining  the  com- 
mission in  its  refusal  to  declare  unreasonable  a  rate  from  Cin- 
cinnati to  Chattanooga,  188  Fed.  242,  declared  its  full  con- 
currence in  the  view  of  the  commission  that  in  the  determina- 
tion of  the  reasonableness  of  a  rate,  it  should  not  consider  only 
the  particular  carrier  making  the  same;  but  on  the  contrary, 
should  consider  the  rates  in  a  particular  territory  or  the  rates 
of  other  carriers  to  be  affected  by  the  change  of  the  particular 
rate  or  rates  in  question,  and  the  court  added:  "AYe  think  this 
court  may  take  judicial  knowledge  of  the  fact  that  the  inter- 
state rates  prescribed  for  the  transportation  of  freight  by  com- 
mon carriers  must  necessarily  be  more  or  less  interdependent,  or 
at  least  be  so  related  to  each  other  that  the  rate-making  power 
will  not,  simply  because  it  has  the  power,  fix  the  rate  upon  a 
single  line  of  railroads  which  will  necessarily  disorganize  the 
established  and  reasonable  rates  on  other  roads  in  the  same  ter- 
ritory. All  rates  established  in  accordance  with  law  are  pre- 
sumed to  be  just  and  reasonable.  It  is  for  this  reason  that  the 
rates  for  the  transportation  of  freight  by  other  carriers  in  the 
same  territory  may  be  looked  into,  as  evidence  of  what  each 
paid  as  just  and  reasonable  rate,  provided  the  conditions  are  the 
same.  We  cannot  as  a  court  not  vested  with  the  power  to  fix 
rates,  say,  beyond  question,  that  the  elements  which  the  com- 
mission took  into  consideration  in  fixing  the  schedule  com- 
plained of  were  not  improper  for  the  commission  to  consider, 
and  therefore  cannot  conclude  that  the  commission  fixed  a 
schedule  of  rates  upon  improper  grounds." 

It  seems  that  in  this  case  the  commission  had  admitted  in  its 
opinion  that  if  they  took  the  defendant  railroad  by  itself,  that  is, 


g    186]  THE   INTERSTATE   COMMERCE   ACT.  2GD 

the  Cinfiniiati  Soiitliern,  and  dctormined  the  reasonabh^ness  of 
the  rates  by  reference  to  cost  of  construction,  cost  of  mainten- 
ance and  profit  npon  the  investment,  that  the  rate  would  be 
found  to  be  unreasonably  liigh ;  but  tliat  in  view  of  the  interde- 
pendence of  other  rates,  tlie  commission  hesitated  to  take  action 
which  would  make  widespread  and  far-reaching  reductions  of 
rates  on  otlier  lines,  when  there  was  no  special  occasion  for  it. 
This  case  has  been  appealed  to  the  supreme  court, — the  com- 
plainant contending,  that  while  the  commission  could  lawfully 
consider  the  interdependence  of  rates  it  could  not  nuike  that 
consideration  conclusive. 

§  186  (136).  Reasonableness  of  rates  as  dependent  on  char- 
acter of  the  traffic. — Tlu-  connuission  has  unironnly  recognized 
that  the  character  of  the  traffic  is  material  in  determining  the 
rates  and  that  the  rates  must  be  varied  according  to  the  value  of 
the  eomniotiities  as  well  as  the  cost  of  handling  and  the  degree 
of  risk  to  the  carrier.  Thus  to  make  the  rates  on  metals,  coal, 
and  other  low  grade  freights  yield  per  ton  the  average  received 
on  all  freight  would  be  unjust,  and  these  considerations  are  the 
basis  of  classification.  See  infra,  section  3.  Thus  coal  is  one  of 
the  most  desirable  kinds  of  traffic,  with  a  small  hazard  of  loss, 
and  the  cost  of  receiving  and  delivering  is  less  than  that  of  most 
other  kinds  of  freight,  and  at  the  same  time  it  is  an  article  of 
universal  necessity  in  daily  life  and  the  basis  of  industries.  See 
10  I.  C.  C.  R.  337.^ 

In  14  I.  C.  C.  R.  23,  the  commjssion  said  that  lumber  was  a 
low  grade  commodity  and  should  move  at  low  rates,  especially 
when  the  haul  is  long,  as  it  moved  in  large  quantities,  was  loaded 
by  the  shipper  and  unloaded  by  the  consignee,  was  shipped  in 
both  closed  and  open  cars,  was  loaded  to  a  high  enconomic  car 
load  rate  didn't  require  special  or  expedited  movement,  was  not 
easily  injured  in  transit  and  caused  few  damage  claims.  In 
such  commodities  it  is  also  true  that  their  comparatively  low 
value  as  compared  with  weight  necessitated  low  rates  to  enable 
them  to  be  carried  any  distance.  On  the  other  hand,  the  in- 
creased hazard  to  the  carrier  in  transporting  live  stock  is  prop- 
erly taken  into  account  in  fixing  the  tariff.  10  I.  C.  C.  R.  327. 
See  also  5  I.  C.  C.  R.  51^  and  4  Int.  Com.  Rep.  223;  6  I.  C.  C.  R. 
488. 


270  THE    INTERSTATE    COMMERCE    ACT,  [SECTION    1 

In  the  circumstances  to  be  considered  are  all  questions  bear- 
ing upon  the  cost  of  service  by  the  carrier,  including  any  special 
services  rendered  the  shipper,  such  as  rapid  transit  and  increased 
cost  of  handling.    2  I.  C.  C.  R.  73  and  2  Int.  Cora.  Eep.  49. 

Greater  value  alone  is  not  conclusive  of  the  reasonableness 
of  a  higher  rate  of  freight  on  a  given  article  than  upon  another 
commodity  of  the  same  general  character,  especially  when  the 
incidents  of  transportation  are  identical,  21  I.  C.  C.  R.  522. 

§  187  (137).  Distance  as  a  factor  in  rates. — The  commission 
has  uniformly  ruled  that  distance  is  an  important  factor  in  de- 
termining the  reasonableness  of  rates  and  ordinarily  the  stand- 
ard, but  not  always  controlling.  It  has  been  said  to  be  con- 
trolling in  the  absence  of  other  influential  conditions.  7  I.  C. 
C.  R.  180.  Distance  by  the  shortest  route  has  been  frequently 
considered  in  determining  the  rate  on  another  and  competing 
line,  and  the  distance  by  the  shortest  available  route  has  been 
taken  as  a  basis  of  differentials  in  grain  rates,    7  I.  C.  C.  R.  481. 

"When  the  act  to  regulate  commerce  was  before  congress,  the 
mileage  bases  for  rates  was  suggested  but  not  adopted.  The 
commission  said  in  I.  C.  C.  R.  629,  2  Int.  Com.  Rep.  9,  that  the 
fact  that  the  rates  were  not  fixed  on  a  mileage  basis  does  not 
necessarily  make  them  either  illegal  or  unjust,  and  the  commis- 
sion has  no  power  to  make  an  order  requiring  the  adoption  of 
such  a  basis.    See  also  2  I.  C.  C.  R.  52,  2  Int.  Com.  Rep.  41. 

\Vhere  rates  seemingly  reasonable  are  made  by  a  number  of 
carriers  in  a  widely  extended  territory  and  are  relatively  fair 
so  far  as  the  evidence  shows,  the  commission  will  not  order  these 
rates  changed  at  one  important  point,  thereby  throwing  the 
rates  of  the  entire  system  into  confusion  for  the  purpose  of 
conforming  to  the  mileage  basis.  2  I.  C.  C.  R.  315,  2  Int.  Com. 
Rep.  199. 

For  illustration  of  the  blanketing  of  rates  in  a  considerable 
territory  securing  substantial  equality  between  producing  points 
and  markets,  and  the  denial  of  the  contention  for  rates  based 
upon  distance,  see  17  I.  C.  C.  R.  169.  The  commission  has  refused 
to  change  rates  reasonable  in  themselves  to  equalize  commercial 
conditions,  or  to  enable  cities  to  secure  traffic  from  their  own 
territory,  6  I.  C.  C.  R.  195;  as  rates  cannot  be  fixed  to  overcome 
natural  advantages,  or  for  the  purpose  of  equalizing  commercial 
■conditions.     See  preferences  as  to  communities,  infra,  §  241, 


§    18!>]  THE  INTERSTATE   COMMERCE   ACT.  iM 

The  rule  of  increased  aggregate  rate  and  decreased  rate  per 
ton  per  mile  as  distance  increases,  while  general,  is  subject  to 
qualifications  and  exceptions.  9  I.  C.  C.  R.  17.  Charges  are  not 
l)roportion  to  distance  where  distances  are  considerable  and  the 
distances  between  the  points  relatively  small.  5  I.  C.  C.  R.  264 
and  4  Int.  Com.  Rep,  65.  As  to  grouping  of  rates,  see  infr.a, 
section  3. 

§  188  (138).  The  commission  on  comparison  of  rates. — Rates 
reasonal)le  in  one  section  of  the  country  may  be  unreasonable 
in  another.  6  I.  C.  C.  R.  121.  There  is  no  necessary  connection 
between  rates  on  traffic  of  the  same  kind  or  class  in  one  direction 
and  rates  in  the  opposite  tlircction,  as  special  circumstances,  such 
as  flow  of  traffic,  may  justify  higher  rates  in  one  direction  than 
in  the  other;  especially  is  this  the  case  where  the  distance  is  of 
great  length.  6  I.  C.  C.  R.  121,  9  I.  C.  C.  R.  642.  The  share  of  a 
through  rate  is  not  necessarily  the  measure  of  a  reasonable  rate, 
but  is  properly  used  as  a  basis  of  comparison  in  determining  its 
legality,  6  I.  C.  C.  R.  458;  and  the  apportionment  of  through 
rates  to  tlie  different  parts  of  the  through  line  may  be  significant 
of  the  question  of  the  reasonableness  of  the  through  rate.  2  I. 
C.  C.  R.  131,  and  2  Int.  Com.  Rep.  78.  Local  rates  are  not  prop- 
erly compared  with  through  rates.  1  I.  C.  C.  R.  401,  1  Int.  Com. 
Rep.  703 ;  3  I.  C.  C.  R.  534,  2  Int.  Com.  Rep.  778.  Where  a  rail- 
road owned  two  parallel  lines,  it  was  ruled  that  having  accepted 
low  rates  on  one  of  them,  it  should  have  provided  corresponding 
advantages  to  the  patrons  of  its  other  lines,  allowances  being 
properly  made  for  any  differences  in  conditions.  4  I.  C.  C.  R. 
79  and  3  Int.  Cora.  Rep.  115. 

In  comparison  with  rates  in  other  localities,  dissimilar  condi- 
tions and  modifying  circumstances  are  to  be  considered. 

§  189  (135).  Reasonableness  of  rates  as  relating  to  cost  of 
service  and  needs  of  the  shipper. — The  general  considerations 

of  public  policy  relating  to  the  cost  of  production  of  the  com- 
modity and  the  needs  of  the  shipper  on  the  one  hand,  and  the 
circumstances  and  financial  condition  of  the  carrier,  such  as  are 
involved  in  the  cases  before  courts  relating  to  interstate  trafiic, 
have  been  considered  by  the  commission  in  several  cases,  notably 
in  the  report  to  the  senate  in  1890  in  response  to  a  resolution  of 


272  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    1 

the  senate  calling  for  such  report,  on  the  alleged  excessive  freight 
rates  and  charges  on  food  products.  4  I.  C.  C.  E.  48,  3  Int.  Com. 
"Rep.  93-151,  and  in  the  oi)inion  of  April  1,  1903,  on  the  proposed 
advance  in  freight  rates.  9  I.  C.  C.  U.  382.  Thus  the  circum- 
stances of  the  carrier,  its  operating  expenses,  cost  of  transporta- 
tion, grades,  destiny  or  sparseness  of  population,  volume  of  busi- 
ness, book  charges,  dividends,  are  all  properly  considered  but 
are  not  controlling.  See  2  I.  C.  C.  R.  875,  and  2  Int.  Com.  Rep. 
289 ;  3  I.  C.  C.  R.  473,  and  2  Int.  Com.  Rep.  742 ;  6  I.  C.  C.  R. 
601.    See  also  2  I.  C.  C.  R.  272,  and  2  Int.  Com.  Rep.  162. 

In  the  Spokane  and  Coast  Rate  Cases,  15  I.  0.  C.  R.  376,  in 
1909,  the  commission  ruled  that  the  distribution  of  new  stock  of 
the  Great  Northern  Railroad  among  tlie  holders  at  par,  though 
the  market  value  was  above  par  at  the  time  of  distribution,  had 
no  bearing  upon  the  e^irnings  to  which  the,  company  was  en- 
titled, or  on  the  rates  vrhich  were  under  question.  It  was  ruled, 
however,  that  the  earnings  on  the  railroads  were  excessive,  and 
the  freight  rates  were  ordered  reduced.  The  opinion  in  this 
case  has  an  exhaustive  review  of  the  history  and  capitalization 
of  railroads  with  a  discussion  of  the  relation  of  coast  and  inland 
rates.    See  also  9  I.  C.  C.  R.  318. 

The  capitalization  of  a  railroad,  the  commission  has  said,  to 
have  consideration  in  cases  involving  the  readjustment  of  rates, 
should  be  examined  by  the  history  of  the  capital  account,  the 
value  of  the  stock  and  various  securities  and  the  actual  cost  and 
the  value  of  the  property  itself,  as  the  making  of  the  capital  ac- 
count alone  the  basis  of  legitimate  earnings  would  place,  as  a 
rule,  railroads  conservatively  managed  and  capitalized  at  an 
enormous  disadvantage.  8  I.  C.  C.  R.  158.  But  the  circum- 
stances of  the  carrier  and  its  financial  interests  are  not  alone  to 
be  considered.  9  I.  C.  C.  R.  160.  While  the  expense  of  opera- 
tion, liability  to  damage  from  sand  drifts,  etc.,  and  the  require- 
ment of  a  return  upon  the  investment  of  the  carrier,  are  consid- 
ered, the  financial  necessities  of  the  carrier  do  not  justify  ex-, 
cessive  rates.  Railroads  are  entitled  to  share  in  the  general 
prosperity  of  the  country,  but  the  cost  of  replacement  and  of 
new  construction  should  not  be  charged  to  earnings  and  cost  of 
operation  so  as  to  diminish  net  earnings  and  cause  an  advance  of 
rates.  9  I.  C.  C.  382;  5  I.  C.  C.  R.  156,  and  3  Int.  Com.  Rep. 
794.  Rates  on  the  lines  of  rival  companies  or  different  branches 
of  tlie  same  company  are  properly  considered.    6  I.  C.  C.  R.  121, 


§    lOO]  THE   INTERSTATE   COMMERCE   ACT.  273 

I.  C.  C.  R.  325,  1  Int.  Com.  Rep.  641,  6  I.  C.  C.  R.  195;  as  also 
rates  to  contiguous  points  on  same  line.  2  I.  C.  C.  R.  588,  2  Int. 
Com.  Rep.  412. 

On  the  question  of  reasonableness,  it  is  immaterial  whether  the 
railroads  combine  or  act  separately.  2  I.  C.  C.  R.  375,  2  Int. 
Com.  Rep.  289.  And  an  increase  of  rates  for  the  purpose  of  se- 
curing certain  lines  of  traffic  from  territory  set  apart  to  railroads 
under  an  agreement  is  prima  facie  unreasonable.  6  I.  C.  C.  R. 
195. 

§  190  (140).  Reasonableness  and  proportion. — It  was  said 
by  the  commission  in  an  opinion  by  its  chairman,  Judge  Cooley, 
in  an  early  case,  2  I.  C.  C.  R.  231,  and  2  Int.  Com.  Rep.  137,  that 
the  phrase  "rates  reasonable  in  and  of  themselves"  was  very 
likely  to  be  misleading,  and  that  it  was  not  the  theory  of  the  act 
that  reasonableness  of  rates  could  thus  be  separately  and  inde- 
pendently determined. 

On  the  contrary,  it  is  assumed  in  the  act  that  persons,  corpo- 
rations and  localities  are  interested  not  only  in  the  rates  charged 
them,  but  in  the  rates  which  are  charged  to  others  also,  and  that 
while  the  act  does  not  require  all  rates  to  be  proportionate,  it 
nevertheless  makes  proportion  an  important  element  when  the 
rates  to  any  locality  are  to  be  determined.  No  rates  therefore 
can  be  reasonable  in  and  of  themselves,  in  contemplation  of  the 
act,  which  are  made  regardless  of  proportionment.  And  in  an- 
other case  it  was  said  (3  I.  C.  C.  R.  534,  and  2  Int.  Com.  Rep. 
777): 

"The  terms  'reasonable  and  just'  as  used  in  the  statute,  as 
applied  to  rates  are  each  relative  terms. ,  They  do  not  mean  to 
imply  that  the  rates  on  every  railroad  employed  in  interstate 
commerce  sliall  be  the  same  or  even  about  the  same.  The  condi- 
tions and  circumstances  of  each  road  surrounding  the  traffic, 
and  wliich  enter  into  and  control  the  nature  and  character  of  the 
service  performed  by  the  carrier  in  the  transportation  of  prop- 
erty, such  as  the  cost  of  transportation,  which  includes  volume 
or  lightness  of  traflic,  expense  of  construction  and  operation, 
competition  in  .some  respects  of  carriers  not  subject  to  the  law, 
rates  made  by  shorter  and  competing  lines  to  same  points  of 
destination,  space  occupied  by  freiuht,  and  risk  of  carriage. — all 
have  to  be  considered  in  determining  whether  a  given  rate  is 
reasonable  and  just."  Tested  by  these  a  rate  may  be  very  rea- 
sonable and  just  as  to  one  road,  and  not  as  to  another. 
IS 


27-1  THE    IXTERSTATS    COMMERCE    ACT.  [SECTION    1 

As  to  the  complexity  of  tlio  question  of  adjusting  rates  so  as 
to  mal-:e  tliem  at  once  reasonable  per  se  and  in  proportion,  see 
supra,  §  126. 

§  191  (141).  The  commission  on  rate  wars  and  reasonable- 
ness of  rates. — In  the  matter  of  the  Chicago,  St.  Paul  &  Kansas 
City  Railway  Co.  (2  I.  C.  C.  R.  231,  2  Int.  Com.  Rep.  137),  the 
commission  in  an  opinion  by  Judge  Cooley,  considered  this  sub- 
ject under  an  application  for  alleged  violation  of  the  fourth 
section  of  the  act,  and  said  that  the  act  was  not  passed  to  protect 
railroad  corporations  against  the  misconduct  or  mistakes  of  their 
officers,  or  even  primarily  to  protect  such  corporations  against 
each  other,  and  that  the  term  "just  and  reasonable"  is  emploj^ed 
to  establish  a  maximum  li  iiitation  for  the  protection  of  the 
public,  not  in  minimum  limitation  for  the  protection  of  reckless 
carriers  against  their  own  action.  The  commission  conceded  that 
there  was  evidence  that  in  many  cases  railroad  companies  tem- 
porarily established  rates  which  were  not  only  below  the  fair 
compensation  for  their  services,  but  if  persisted  in  were  destruct- 
ive of  their  own  interests  as  well  as  of  the  interests  of  its  rivals; 
but  carriers  that  made  such  unreasonably  low  rates  were  giving 
the  public  to  understand  that  those  rates  were  reasonable  and 
remunerative  and  were  doing  very  much  to  establish  against 
themselves  a  low  standard  of  rates  for  all  time.  The  commission 
held  that  it  had  no  power  to  order  rates  to  be  increased  upon  the 
ground  that  they  were  so  low  that  persistence  in  them  would  be 
ruinous.  This  ruling  was  cited  and  approved  by  the  supreme 
court  in  the  Maximum  Rate  case,  167  U.  S.  511,  1.  c,  42  L.  Ed. 
257,  the  court  saying  that  the  argument  showing  that  the  com- 
mission had  no  power  to  fix  a  minimum  or  establish  an  absolute 
ratio  went  also  to  show  that  they  had  no  power  to  fix  any  rate 
to  control  in  the  future  (under  the  act  prior  to  amendment  of 
1906). 


§    192]  TIIK    IXTERSTATE    COMMEUCE    ACT.  2li 


Section  2. 

§  19'2.  Section  2.     I'njust  discrimination  defined  and  forbidden, 

193.  Origin  of  tlie  section. 

194.  Purpose  of  the  section. 

195.  Effectiveness  of  the  section.     The  Act  of  February  19,  1903. 

196.  Common  law  as  to  discriminations. 

197.  Just  and  unjust  discrimination  at  common  law. 

198.  Discrimination  in  charge  based  upon  differences  in  service  not 

discriminative. 

199.  Circumstances  and  conditions  of  through  traffic  and  local  traffic 

are  dissimilar. 

200.  Competition  of  carriers  docs  not  make  circumstances  dissimilar 

under  section  2. 

201.  The  party  rate  case. 

202.  Wholesale  and  retail  rates  in  freight  traffic. 

203.  Wholesale  rates  in  freight  and  passenger  traffic  distinguished. 

204.  Discrimination  not  unjust  when  based  on  special  service. 

205.  Carload  and  less  than  carload  rates. 

206.  Discrimination  in  application  of  carload  rates. 

207.  The  supreme  court  on  forwarding  agents  in  carload  rates. 

208.  Discrimination  in  carload  rates. 

209.  Cargo  rates  discriminative. 

210.  Different  forms  of  discrimination. 

211.  Discrimination  in  restricted  rates. 

212.  Discrimination  through  industrial  tap  linos  and  plant  facilities. 

213.  Discrimination  through  interest  in  connecting  company. 

214.  Discrimination  by  carrier  in  favor  of  itself  as  a  shipper. 

215.  Discrimination  in  storage  of  goods,  etc. 

216.  Stoppage  in  transit  privileges. 

217.  Unjust  discrimination  through  abuse  of  stoppage  in  transit  priv- 

ileges. 

218.  Unjust  discrimination  in  passenger  service. 

219.  Giving  passes  to  shijipers  prohibited. 

220.  Unjust  discrimination  in  telephone  service. 

221.  Application  of  the  section. 

222.  Retention  of  overcharge. 

223.  Enforcement  of  the  section. 

224.  Connecting  carrier  not  responsible  for  discrimination  by  initial 

carrier. 

225.  Effect  of  rebates  upon  contracts  of  affreightment. 

226.  Discrimination  in  allowance  to  private  transfer  companies 

[Unjust    discrlnilnntlon   defined   and   forbldden,^! 

§  192  (143). — Sec.  2.  That  if  any  common  carrier  subject 
to  tlie  provisions  of  this  act  shall,  directly  or  indirectly,  by  any 
special  rate,  rebate,  drawback,  or  other  device,  charge,  demand, 


276  THE    INTERSTATE    COMMERCE    ACT.  [SECTION   2 

collect,  or  receive  from  any  person  or  persons  a  greater  or  less 
compensation  for  any  service  rendered,  or  to  be  rendered,  in  the 
transportation  of  passengers  or  property,  subject  to  the  provi- 
sions of  this  act,  than  it  charges,  demands,  collects,  or  receives 
from  any  other  person  or  persons  for  doing  for  him  or  them  a 
like  and  contemporaneons  service  in  the  transportation  of  a  like 
kind  of  traffic  under  substantially  similar  circumstances  and  con- 
ditions, such  eonunon  carrier  shall  be  deemed  guilty  of  unjust 
discrimination,  which  is  hereby  prohibited  and  declared  to  be 
unlawful. 

§  193  (144).  Origin  of  the  section. — This  section  has  not 
been  amended.  It  was  said  by  the  supreme  court  in  the  Texas  & 
Pacific  Eailway  case,  1G2  U.  S.  197,  1.  c.  219,  40  L.  Ed.  940,  to 
have  been  modeled  upon  section  90  of  the  Railway  Clauses  Con- 
solidation Act  of  1845,  8  &  9  Vict.  ch.  20,  the  first  English 
statute  regulating  railways.    This  section  is  as  follows : 

''Sec.  90.  And  whereas  it  is  expedient  that  the  company 
should  be  enabled  to  vary  the  tolls  upon  the  railways  so  as  to 
accomodate  them  to  the  circumstances  of  the  traffic,  but  that  such 
power  of  varying  should  not  be  used  for  the  purpose  of  preju- 
dicing or  favoring  particular  parties,  or  for  the  purpose  of  col- 
lusively  or  unfairly  creating  a  monoply,  either  in  the  hands  of 
the  company  or  of  particular  parties;  it  shall  be  lawful  there- 
fore, for  the  company,  subject  to  the  provisions  and  limitations 
herein  and  in  the  special  act  contained,  from  time  to  time  to  alter 
or  vary  the  tolls  by  the  special  act  authorized  to  be  taken,  either 
upon  the  whole  or  upon  any  particular  portions  of  the  railway, 
as  they  shall  think  fit ;  provided  that  all  such  tolls  be  at  all  times 
charged  equally  to  all  persons,  and  after  the  same  rate,  whether 
per  ton,  per  mile,  or  otherwise,  in  respect  to  all  passengers,  and 
of  all  goods  or  carriages  of  the  same  description,  and  conveyed 
or  propelled  by  a  like  carriage  or  engine,  passing  only  over  the 
same  portion  of  the  line  of  railway  under  the  same  circum- 
stances; and  no  reduction  or  advance  in  any  such  tolls  shall  be 
made  either  directly  or  indirectly  in  favor  of  or  against  any 
particular  company  or  person  traveling  upon  or  using  the  rail- 
way. ' ' 

This  section  of  the  English  law,  known  as  the  equality  clause, 
differs  from  section  2  of  the  American  act  in  the  words  ''passing 
only  over  the  same  line  of  railway  under  the  same  circum- 
stances," which  impart  a  very  different  meaning  as  construed  in 
the  English  courts  from  the  words  "under  substantially  similar 
circumstances  and  conditions"  found  in  the  American  act.    The 


§    194]  THE   INTERSTATE    COMMERCE   ACT.  277 

English  section  as  cons;triiod  by  the  English  courts  was  confined 
in  its  operation  to  sliipiiients  passing  only  over  the  same  portion 
of  the  line  between  tlic  same  points  of  departure  and  the  same 
points  of  arrival.  See  M.  S.  &  L.  Ry.  Co.  v.  Denaby  Main  Col- 
liery Co.,  4  Railway  &  Canal  Traffic  Cases,  p.  452;  Murray  v.  G. 
&  S.  W.  Ry.  Co.,  4  Railway  &  Canal  Traffic  Cases,  p.  460;  Denaby 
Main  Colliery  Co.  v.  I\l.  S.  &  L.  Ry.  Co.,  6  Railway  &  Canal  Traf- 
fic Cases,  p.  141;  L.  &  Y.  Ry.  Co.  v.  Greenwood,  Law  Reps.  21 
q.  B.  Div.  pp.  217  and  218. 

It  appears  from  a  statement  made  in  the  debate  in  congress  by 
Senator  Sherman,  on  ]\Iay  14,  1887,  that  the  words  "and  from 
the  same  original  point  of  departure  or  from  the  same  point  of 
arrival"  were  at  one  time  contained  in  section  2,  but  that  these 
words  were  taken  out  by  the  conference  committee,  and  the  words 
''under  substantially  similar  circumstances  and  conditions" 
adopted  in  lieu  thereof.  So  that  discriminations  are  "unjust" 
and  violative  of  this  section:  first,  when  the  service  is  like  and 
contemporaneous;  second,  when  it  is  rendered  in  the  transpor- 
tation of  a  like  kind  of  traffic,  and  third,  when  the  service  is 
rendered  under  substantially  similar  circumstances  and  condi- 
tions.   That  is,  all  three  of  these  conditions  must  concur. 

§  194  (145).  Purpose  of  the  section. — The  purpose  of  this 
second  section  is  the  prevention  of  unjust  discrimination  between 
shippers  by  any  form  of  device.  It  was  said  by  the  commission 
in  its  report  on  its  investigation  of  the  subject  of  "underbill- 
ing,"  1  I.  C.  C.  R.  633,  and  1  Int.  Com.  Rep.  813,  that  the  enum- 
eration in  this  section  of  special  rates,  rebates,  drawbacks  and 
other  devices  showed  the  methods  of  favoritism  which  were  pre- 
sented most  distinctively  to  congress  in  framing  the  act,  and  add- 
ed: "The  investigation  which  preceded  the  passage  of  the  act 
had  disclosed  the  fact  that  preferences  were  frequent,  in  fact 
were  almost  universal."  The  commission  quoted  from  the  report 
of  the  senate  conniiittee  to  the  effect  that  the  prevailing  policy  of 
railway  management  is  but  an  elaborate  system  of  special  rates, 
rebates,  drawbacks  and  concessions  to  foster  monoply,  to  enrich 
favored  shippers  and  to  prevent  free  competition  in  the  many 
lines  of  trade  in  which  the  item  of  transportation  is  an  important 
factor.  Tlie  commission  said  that  the  act  was  prepared  accord- 
ingly with  these  evils  directly  in  view. 


278  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    2 

The  section  has  been  construed  both  by  the  commission  and  by 
the  courts,  in  recognition  of  these  evils  which  congress  intended 
to  remedy.  The  supreme  court  said  in  Wight  v.  United  States, 
167  U.  S.  512,  42  L.  Ed.  258,  that  the  section  was  designed  to 
compel  Qxery  carrier  to  give  equal  rights  to  all  shippers  over  its 
own  road  and  to  foi'bid  it  by  any  device  to  enforce  higher  charges 
against  one  than  another. 

In  another  case.  Union  Pacific  Railway  Co.  v.  Goodrich,  149 
U.  S.  680,  37  L.  Ed.  896,  the  court  said  in  construing  a  Colorado 
statute  similar  in  terms,  that  the  purpose  of  t'^e  Colorado  statute 
was  to  apply  to  intrastate  traffic  the  same  v.liolesome  rules  and 
regulations  which  congress  thereafter  applied  to  commerce  among 
the  states,  and  to  cut  up  by  the  roots  the  entire  system  of  rebates 
and  discriminations  in  favor  of  particular  localities,  special  en- 
terprises and  favored  corporations,  and  to  put  all  shippers  upon 
an  absolute  equality. 

This  section  2,  however,  does  not  deal  with  discriminations  be- 
tween and  preferences  in  favor  of  or  against  localities,  or  with 
discriminations  between  kinds  of  iraffic,  which  are  dealt  with  in 
the  succeeding  section,  but  only  with  discriminations  between 
shippers  of  the  same  kind  of  traffic,  that  is,  where  the  service  is 
in  the  transportation  of  a  like  kind  of  traffic  ' '  under  substantially 
similar  circumstances  and  conditions." 

§  195  (146).  Effectiveness  of  the  section.  The  act  of  Feb- 
ruary 19,  1903. — The  effectiveness  of  the  act  is  more  distinctly 
expressed  in  the  second  section  than  in  any  other.  The  reason- 
ableness of  rates  remains  as  complex  and  indefinite  a  problem 
as  when  the  act  was  passed,  and  as  will  be  hereafter  seen,  the 
anticipated  prevention  of  the  building  up  of  trade  centers  to  the 
prejudice  of  smaller  toAvns  has  proven  impossible  of  realization 
in  the  face  of  controlling  competition,  but  in  the  question  of  dis- 
crimination between  individuals,  or  classes  of  individuals  in  the 
same  kind  of  traffic,  the  rulings  of  the  court  have  been,  with  the 
exception  of  the  Party  Rate  decision,  in  harmony  with  those  of 
the  commission.  It  may  be  said  further,  that  the  evils  prohib- 
ited in  this  section  are  recognized  by  railway  managers,  so  that 
they  have  in  the  main  co-operated  with  the  commission  in  their 
efforts  for  their  suppression.  Thus  the  commission  said  in  its 
first  annual  report,  1887,  in  reviewing  the  operation  of  the  act 


§    19G]  TDE   INTERSTATE   COMMERCE   ACT.  270 

for  the  fij'st  eight  montlis  in  which  it  was  in  force,  that  it  was 
justified  in  saving  that  the  act  had  operated  directly  to  increasi- 
railroad  earnings  by  putting  an  end  to  rebates,  drawbacks  and 
special  rates  upon  freight  business,  a  result  which  was  also  found 
to  be  eminently  satisfactory  to  the  general  public;  and  the  in- 
vestigations of  the  commission  had  not  as  yet  disclosed  the  exist- 
ence ol  unjust  discriminations  resulting  from  the  use  of  those 
i:)articular  methods  of  preference  in  interstate  traffic.  "On  the 
contrary,  a  .vast  number  of  instances  have  been  found  where 
special  rates,  rebates  and  drawbacks  have  been  discontinued,  and 
where  preferences  and  advantages  which  were  formerly  thereby 
given,  have  been  terminated." 

In  the  intense  competition  of  business,  new  devices  for  secur- 
in-g  discriminating  freight  rates  have  been  eagerlj^  sought,  and 
it  appears  from  the  subsequent  reports  of  the  commission  that 
while  discriminations  are  less  openlj"  given,  the  evil  is  far  from 
being  suppressed,  particularly  in  the  use  of  private  cars  in 
freiglit  traffic,  in  the  division  of  rates  with  terminal  railroads 
owned  or  controlled  by  shippers  and  in  other  devices.  See  re- 
port of  1904,  pages  12  to  19,  and  10  I.  C.  C.  R.  385,  10  I.  C.  C. 
R.  450.  The  act  of  February  19,  1903,  commonly  known  as  the 
Elkins  bill,  has  very  materially  enforced  this  section.  This  law, 
infra,  §  422,  requires  carriers  in  all  cases  to  publish  their  tariffs 
and  prohibits  ''any  practice  on  the  part  of  the  carriers  whereby 
any  such  property  shall  by  any  device  whatever  be  transported 
at  a  less  rate  than  that  named  in  the  tariff  *  *  *  or  whereby  any 
other  advantage  is  given  or  discrimination  practiced."  Under 
this  amendment  the  practice  of  secret  rebates  from  published 
rates,  though  made  to  all  "similarly  circumstanced"  is  made  un- 
lawful. 

§  196  (147).  Common  law  as  to  discriminations. — It  was  said 

of  the  first  section,  as  to  tiie  obligation  to  charge  rcasonahly,  that 
it  was  only  a  reaffirmation  of  the  common  law.  This  can  be  said 
only  in  a  qualified  sense  of  the  obligation  to  charge  equally  im- 
posed by  the  second  section.  In  the  Party  Rate  Case,  145  IT.  S. 
271,  36  L.  Ed.  703,  the  supreme  court  said  that  at  conuuon  law 
it  Avas  even  doubted  whether  carriers  were  bound  to  make  the 
same  charge  to  all  persons  for  the  same  service,  although  the 
weight  of  authority  in  this  country  was  in  favor  of  equal-ity  of 


280  THE    INTERSTATE    COMMERCE    ACT.  [SECTION   2 

charge  to  all  persons  for  similar  service.  Several  cases  have  held 
that  while  it  was  elenicutary  that  commoii  carriers  could  charge 
no  more  than  a  reasonable  compensation,  the  mere  discrimination 
in  rates  was  not  illegal.  If  a  rate  charged  one  party  was  rea- 
sonable, lie  could  not  complain  if  another  was  charged  a  less 
rate ;  though  the  fact  that  another  was  charged  less  might  be 
material  as  eAidence  for  the  jury  tending  to  prove  that  the  rea- 
sonable charge  was  the  smaller  one.  ]\Ir.  Justice  Blackburn  in 
Great  AVestern  Railway  Co.  v.  Sutton,  L.  R.  4  H.  L.  238 ;  Johnson 
V.  Pensacola,  etc.  Co.,  16  Fla.  623.  In  Cowden  v.  Pacific  Coast 
Steamship  Co.,  94  Cal.  470  and-18  L.  R.  A.  221,  the  court  inti- 
mated that  it  was  because  the  common  law  was  not  clearly  settled 
on  this  point  that  it  was  necessary  for  parliament  to  enact  the 
stringent  equality  clauses,  and  that  there  was  a  lack  of  direct 
authority  in  this  country  for  the  reason  that  common  carriers, 
especially  railway  companies,  had  been  placed  entirely  under  the 
control  of  statute  laws. 

On  tliis  question  of  the  right  of  discrimination  at  common  law, 
see  Ex  parte  Benson,  18  S.  C.  38 ;  Baxendale  v.  Railway,  4  C.  B., 
N.  S.  63.  In  the  latter  case,  in  1858,  it  was  said  that  though  a 
carrier  was  limited  to  a  reasonable  charge,  there  was  no  common 
law  obligation  to  charge  equal  rates  to  all  customers.  It  followed 
that  he  could  discriminate  in  the  purpose  of  securing  traffic 
which  would  otherwise  go  by  another  route.  Ragan  v.  Aiken,  9 
Lea  (Tenn.),  609  (1882.) 

In  Menaeho  v.  Ward,  27  Fed.  529  (S.  D.  of  N.  Y.),  de- 
cided in  1886,  the  court,  AYallace,  J.,  conceded  the  right  to  dis- 
criminate, and  said  the  courts  had  always  recognized  the  rights 
of  carriers  to  regulate  their  charges  with  reference  to  the  quanti- 
ties of  merchandise  carried  for  the  shipper,  either  at  a  given 
shipment  or  in  a  given  period  of  time,  although,  said  the  court, 
public  sentiment  in  many  communities  had  objected  to  such  dis- 
crimination and  had  crystalized  into  condemnation  of  the  prac- 
tice. The  court  however  refused  to  apply  this  principle  to  the 
case  where  the  carrier  (a  steamship  company),  sought  to  make 
a  discriminating  rate  in  order  to  prevent  competition,  that  is, 
by  charging  a  higher  rate  to  those  who  refused  to  patronize  it 
exclusively. 

See  also  later  cases  decided  by  the  same  court  after  the  passage 
of  the  Interstate  Commerce  Act.    Thus  in  United  States  v  D.  L. 


§    197]  THE   INTERSTATE   COMMERCE   ACT.  281 

&  W.  R.  Co.,  40  Fed.  101  (1888),  it  was  said  that  the  Inter- 
state Commerce  Act  had  qualified  materially  common  law  rights 
and  obligations  of  carriers.  That  at  common  law  the  carrier  was 
not  obliged  to  treat  all  who  patronized  him  with  absolute  equality 
and  that  discriminations  were  only  unreasonable,  when  they  in- 
ured to  the  undue  advantage  of  one  person,  or  class  of  persons 
in  consequence  of  some  injustice  in/licted  on  another. 

See  also  the  same  court  in  Interstate  Commerce  Commission  v. 
Texas  &  Pacific  R.  Co.,  52  Fed.  187. 

.§  197  (148).  Just  and  unjust  discrimination  at  common  law. 

The  right  of  discrimination  at  common  law  was  not  unlimited, 
and  the  general  statement  found  in  some  of  the  opinions  that  the 
carrier  had  the  right  at  coimnon  law  to  consult  its  own  interests, 
was  qualified  by  the  distinct  recognition,  especially  in  the  latter 
cases,  that  this  discrimination  must  be  exercised  within  the  limits 
of  fairness  and  impartiality  in  vew  of  the  public  duty  owing  by 
the  carrier.  See  C.  C.  C.  &  I.  R.  Co.  v.  Closser,  126  Ind.  348  and 
9  L.  R.  A.  754,  decided  in  1890.  There  is  an  obvious  difficulty 
in  the  application  of  this  principle  in  cases  where  the  discrimina- 
tion is  sought  to  be  justified  on  the  ground  of  securing  traffic 
which  would  not  otherwise  be  secured,  and  in  thus  making  con- 
cessions to  large  shippers,  thereby  giving  them  a  distinct  advan- 
tage over  their  competitors. 

The  trend  of  the  later  cases,  both  in  the  federal  and  state 
courts,  irrespective  of  the  Interstate  Commerce  Act,  distinctly 
condemns  discrimination  based  solely  on  the  ground  of  the  quan- 
tity of  the  freight  shipped,  as  contrary  to  sound  public  policy 
and  incousistent  with  the  obligations  of  the  carriers  to  the  public. 
Thus  in  B.  C.  R.  &  N.  R.  Co.  v.  Northwestern  Fuel  Co.,  31  Fed. 
(Iowa)  652,  the  Circuit  Court,  Brewer,  J.,  held  that  at  com- 
mon law  a  contract  whereby  a  railroad  company  made  a  rate  of 
$1.60  per  ton  to  all  shippers  of  100,000  tons  per  month  or  over, 
with  a  rate  of  not  less  than  $2.40  per  ton  to  those  shipping  less 
than  100^000  tons  per  month,  was  so  arbitrary  and  obviously  in 
the  interest  of  capital  as  to  be  contrary  to  public  policy  and  void, 
though  it  was  not  distinctly  decided  that  any  discrimination 
based  upon  the  amount  of  shipments  was  permissible. 

In  another  case,  Handy  v.  C.  &  U.  R.  Co.,  31  Fed.  689,  S. 
D.  of  Ohio  (1887),  Baxter,  J.,  removed  the  receiver  of  a  rail- 


282  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    2 

road  for  making  a  discriminating  rate  in  favor  of  the  Standard 
Oil  Company  of  ten  cents  a  barrel  while  charging  a  rival  ship- 
per thirty-five  cents  a  barrel  and  agreeing  to  pay  the  twenty-five 
cents  per  barrel  excess  thns  received  over  to  the  Standard  Oil 
Company.  This  discrimination  was  sought  to  be  justified  be- 
cause the  Standard  Oil  Company  had  threatened  to  store  its  oil 
until  it  could  lay  a  line  of  pipes  unless  the  receiver  should  give 
such  rates.  The  court  said  this  was  such  gross  and  wanton  dis- 
crimination as  to  warrant  the  removal  of  the  receiver,  although 
he  had  acted  under  the  advice  of  counsel  for  what  he  deemed 
the  protection  of  the  interests  of  the  railroad,  and  it  did  not 
appear  that  the  money  received  from  the  rival  shipper  had  been 
paid  over  to  the  Standard  Oil  Company. 

In  Haj'es  v.  Pennsjdvania  Co.,  12  Fed.  309,  decided  in 
1882,  on  common  law  principles  before  the  enactment  of  the  In- 
terstate Commerce  Act  (Dist.  of  Ohio),  Judges  Baxter  and 
"Walker,  it  was  held  that  discriminations  based  solely  on  the 
amount  of  freight  shipped  without  reference  to  any  conditions 
rending  to  decrease  thi  cost  of  transportation,  were  discrimina- 
tions in  favor  of  capital  and  were  a  wrong  to  the  disfavored 
party,  entitling  him  to  recover  the  difference  between  the  amount 
paid  by  him  and  that  paid  by  the  favored  competitor.  The 
court  in  its  opinion  distinguished  the  case  of  Nicholson  v.  Great 
Western  Railroad  Co.,  28  L.  J.  C.  P.  89,  as  in  that  case  there  was 
an  undertaking  to  furnish  a  specific  cpiaiitity  of  freight  within 
a  stated  period.  The  court  said  in  the  Hayes  Case,  however,  that 
while  this  English  case  was  clearly  distinguishable,  future  ex- 
perience might  possibly  call  for  a  modification  of  the  principle 
there  announced.  This  decision  was  approved  in,  Kinsley  v.  B. 
N.  Y.  &  P.  R.  R.  Co.,  37  Fed.  181,  decided  in  1888,  where  the 
receiver  of  a  railroad  Avas  directed  to  pay  the  claim  for  money 
exacted  for  freight,  when  a  lower  rate  was  charged  to  another 
shipper  who  shipped  larger  quantities  of  freight. 

On  the  other  hand,  there  is  a  class  of  cases  where  a  reduced 
rate  in  consideration  of  the  amount  of  shipment,  where  the  ship- 
ment was  attended  with  decreased  expense  to  the  carrier,-  was 
sustained,  as  was  Hoover  v.  Pennsylvania,  156  Pa,  220,  and  22 
L.  R.  A.  263,  and  L.  &  N.  Consolidated  R.  Co.  v.  Wilson,  132 
Ind.  517,  and  18  L.  R.  A.  ]05.  In  the  Pennsylvania  case  cited, 
the    Pennsylvania    Constitution    prohibited    discriminations    iii 


§    1D7]  THE   INTERJjTATE    COMMEUCE   ACT.  283 

soinewliat  the  same  terms  as  .section  2  of  the  Interstate  Commerce 
Act,  and  tlie  court  held  tliat  the  carrier  had  a  right  to  discrimin- 
ate in,  rates  on  coal  in  favor  of  a  manufacturer,  saying : 

"DifT'erences  in  freight  rates  on  coal  to  manufacturers  and 
mere  dealers  are  and  have  been  for  many  years  in  universal 
practice,  and  not  a  single  case  other  than  this  has  reached  the 
courts  of  last  resort,  eitlier  in  England  or  in  this  country,  ques- 
tioning the  entire  propriety  and  legality  of  such  differences,  and 
that  circumstance  is  ample  proof  that  both  the  professional  and 
the  laj--  mind  recognize  that  the  difference  is  legal."  The  court 
cited  in  this  case  tlie  decision  of  the  supreme  court  of  the  United 
States  in  the  Party  Rate  Case,  infra. 

In  Evershed  v.  London  &  Northwestern  R.  Co.,  L.  R.  3  Q.  B. 
D.  135,  decided  in  1877,  the  court  conceded  that  a  large  business 
could  be  done  at  a  cheaper  rate  than  a  small  one,  and  that  speak- 
ing generally,  it  was  open  to  the  railway  company  to  make  a 
bargain  with  a  person  provided  they  were  willing  to  make  that 
same  bargain  with  another,  although  that  other  was  not  in  a  po- 
sition to  make  it.  In  this  case,  however,  it  was  held  that  a  gratu- 
itous carting,  loading  and  unloading,  by  a  railroad  company  for 
three  firms  of  brewers  in  order  to  get  their  business,  was  an  un- 
just discrimination  against  another  brewer  in  the  same  place, 
the  three  being  connected  with  another  railway  while  the  com- 
plainant was  not  connected  with  either  railway. 

On  tlie  other  liand,  the  right  to  make  any  discrimination  in 
favor  of  a  shipper,  where  the  ground  of  discrimination  is  based 
solely  on  the  amount  furnished  for  shipment,  even  when  neces- 
sary to  secure  the  traffic  of  the  favored  shipper,  has  been  denied 
on  the  ground  of  public  policy  and  the  public  duty  of  the  carrier. 
See  Scofield  v.  Lake  Shore  &■  j\Iichigan  Southern  R.  Co..  43  Ohio 
St.  571;  State  v.  Railroad,  47  Ohio  St.  130.  In  Hilton  Lumber 
Co.  V.  Atlantic  Coast  Line  R.  R.  Co.,  the  supreme  court  of  North 
Carolina,  1904,  60  C.  L.  J.  30.  in  a  review  of  the  cases,  held  that 
a  railroad  carrying  raw  material  to  factories  could  not  charge  a 
factory,  agreeing  to  ship  the  manufactured  product  by  the  same 
road,  less  for  the  same  service  than  it  cliarged  the  factory  which 
makes  no  such  agreement,  saying  that  discrimination  was  a  more 
dangerous  power  than  high  rates,  if  the  latter  were  charged  im- 
partially to  all.  It  will  be  observed  however  that  the  facts  of  this 
case  would  permit  the  allowance  .of  a  through  rate  under  the 


284  THE    INTERSTATE    COMMERCE    ACT.  [SeCTIOX   2 

milling  in  transit  principle,  as  recognized  under  the  Interstate 
Commerce  Act.    See  infra. 

As  to  otlier  eases  on  the  same  general  subject,  see  Fitehburg  R. 
Co.  V.  Gage,  12  Gray,  393 ;  Spofford  v.  B.  &  I\r.  R.  Co.,  128  INIass. 
326;  Avingpr  v.  So.  Car.  R.  Co.,  29  S.  C.  265;  Railroad  Co.  v. 
Forsaith,  59  N.  H.  122;  Chicago,  etc.  R.  Co.  v.  Suffern,  129  111. 
274;  Atwater  v.  Railroad  Co.,  48  N.  J.  Law,  55;  Cook  v.  C.  R.  I. 
&  Pac.  R.  Co.,  81  Iowa,  151,  9  L.  R.  A.  764.  In  this  latter  case  the 
court  held,  that  the  allowance  of  a  rebate  by  a  carrier  to  certain 
of  his  customers,  from  the  tariff  rate  charged  other  customers  for 
precisely  the  same  service,  was  sufficient  of  itself  to  show  that 
the  rate  charged  was  unreasonable  and  unjustly  discriminative. 

See  also  Great  Western  R.  Co.  v.  Sutton,  L.  R.^4  H.  L.  238 ; 
Messenger  v.  Penn.  Co.,  37  N.  J.  Law,  531. 

§  198  (149).  Discrimination  in  charge  based  upon  difference 
in  service  not  discriminative. — ^While  therefore  there  has  been 
a  difference  of  judicial  opinion  as  to  what  constitutes  unjust 
discrimination,  at  common  law,  with  a  distinct  trend  towards  a 
clearer  recognition  of  the  public  duty  of  the  carrier  and  the 
public  policy  of  equality  of  charge,  it  is  also  recognized  that  a 
discrimination  is  not  unjust  when  it  is  based  upon  a  substantial 
difference  in  the  mode  and  kind  of  service. 

Thus  it  was  held  by  the  supreme  court  of  the  United  States 
in  the  case  already  cited  as  to  the  common  law  in  the  federal 
courts.  Western  Union  Telegraph  Co.  v.  Call  Publishing  Co., 
supra,  that  common  carriers,  whether  engaged  in  interstate  com- 
merce or  in  that  Avholly  within  the  state,  were  performing  public 
service.  "They  are  endowed  by  the  state  with  some  of  its  sov- 
eign  power,  such  as  the  right  of  eminent  domain,  and  so  by  reason 
of  the  public  service  they  render.  As  a  consequence  of  this  all 
individuals  have  equal  rights  both  in  respect  to  service  and 
charges.  Of  course  such  equality  of  right  does  not  prevent  dif- 
ferences in  the  modes  and  kinds  of  service  and  different  charges 
based  thereon.  There  is  no  cast  iron  rule  of  uniformity  which 
prevents  the  charge  from  being  above  or  below  a  particular  sum, 
or  requires  that  the  service  should  be  exactly  along  the  same 
lines.  But  that  principle  of  equality  does  forbid  any  difference 
in  charge  which  is  not  based  upon  difference  in  service,  and  even 
when  based  upon  difference  in  service  must  have  some  reason- 


§    200]  THE   INTERSTATE   COMMERCE   ACT,  285 

able  relation  to  the  amount  of  difTeren'e  and  cannot  be  so  great 
as  to  produce  au  nnjust  discrimination." 

This  was  a  ease  of  alleged  discrimination  in  telegraph  rates 
which  Avcre  then  not  subject  to  the  Interstate  Commerce  Act. 

§  199  (150).  Circumstances  and  conditions  of  through  traffic 
and  local  traffic  are  dissimilar. — AVhile  competition  Initween 
cari'iers  cannot  justify  discrimination  between  individuals,  com- 
petition may  and  does  have  an  influence  in  determining  the 
through  rates,  thus  making  them  under  essentially  different 
circumstances  and  conditions  from  the  local  rates  to  other  points 
on  the  same  line.  In  such  cases  the  reduced  rate  aiTected  by  com- 
jK'tition  is  controlled  by  circumstances  and  conditions  substan- 
tially dissimilar  within  the  meaning  of  the  act.  But  whether  so 
controlled  or  not,  it  must  be  the  same  to  all  shippers  under  the 
same  conditions.  It  has  been  uniformly  held  both  by  the  com- 
mission and  by  the  courts,  that  a  local  rate  to  a  given  point  and 
the  pro  rata  part  of  a  through  rate  to  the  same  point  on  the  same 
line  are  not  under  similar  circumstances  and  conditions. 

The  phrase  "under  similar  circumstances  and  conditions"  is 
found  in  sections  2  and  4.  As  hereafter  seen,  competitive  condi- 
tions may  create  dissimilar  circumstances  and  conditions  be- 
tween localities  under  section  4,  but  when  the  rates  are  thus 
fixed  under  dissimilar  conditions,  section  2  requires  that  shippers 
in  any  given  locality  must  be  treated  alike  for  the  same  service. 
But  through  traffic  is  a  different  "kind  of  service"  from  local 
traffic.  This  was  held  in  Union  Pacific  Railway  Co.  v.  United 
States,  117  U.  S.  355,  29  L.  Ed.  920,  in  the  construction  of  the 
act  of  congress  of  July  1,  1862,  relative  to  the  Union  Pacific  Rail- 
way company,  and  applied  to  the  construction  of  the  second 
section  of  the  Interstate  Commerce  Act  in  the  Import  Rate  case, 
162  U.  S.  197,  40  L.  Ed.  940.  It  is  not  only  in  the  presence  of 
competition,  but  also  in  the  increased  cost  of  service,  resulting 
from  stoppages,  that  the  conditions  of  through  and  local  traffic 
are  substantially  dissimilar.  Chicago,  etc.,  R.  R.  Co.  v.  Tomp- 
kins, 176  U.  S.  167,  44  L.  Ed.  417.     See  supra,  §  180. 

§  200  (151).  Competition  of  carriers  does  not  make  circum- 
stances dissimilar  under  section  2.— Those  words  as  used  in  sec- 
tion 2  refer  to  the  matter  of  carriage,  and  do  not  include  compe- 


2^S  TPIE    INTERSTATE    COMMERCE    ACT,  [SECTION    2 

titi'  11,  that  is,  discrimination  between  individuals  is  not  justi- 
fied by  the  fact  of  competition  with  other  carriers  influencing 
the  lower  charge.  Thus  in  "Wight  v.  United  States,  supra,  the 
court  sustained  the  conviction  of  a  railroad  agent  for  making  to 
a  consignee,  who  had  a  siding  connection  with  a  competing  rail- 
road, an  allowance  or  rebate  for  the  expense  of  cartage  from  its 
own  station.  It  was  urged  that  the  party  who  did  not  have  this 
connection  would  have  to  go  to  the  expense  of  cartage  by  which- 
ever road  he  transported,  and  that  therefore  the  traflfic  was  not 
under  the  same  circumstances  and  conditions  within  the  terms 
of  section  2.  But  the  court  said  that  the  wrong  prohibited  by  the 
section  was  a  discrimination  between  shippers,  and  that  the  serv- 
ice in  transporting  to  the  station  from  the  point  of  shipment  was 
precisely  the  same  to  each  shipper.  The  court  concluded:  *'It 
may  be  that  the  phrase  'under  substantially  similar  circum- 
stances and  conditions,'  found  in  section  4  of  the  act,  and  where 
the  matter  of  the  long  and  short  haul  is  considered,  may  have  a 
broader  meaning  or  wider  meaning  than  the  same  phrase  found 
in  section  2.  It  will  be  time  enough  to  determine  that  question 
when  it  is  presented.  For  this  case  it  is  enough  to  hold  that  that 
phrase,  as  found  in  section  2,  refers  to  the  matter  of  carriage, 
and  does  not  include  competition."  It  was  determined  in  other 
cases  before  the  court  construing  section  4  that  the  term  ''under 
substantially  similar  circumstances  and  conditions"  in  the  latter 
section  did  have  a  broader  meaning,  and  did  include  competition 
as  creating  dissimilarity  of  circumstances  and  conditions.  See 
section  4,  infra. 

The  construction  of  the  section  in  the  Wight  Case  prevents  a 
carrier  from  making  a  concession  to  secure  a  business,  which 
it  could  not  otherwise  secure,  if  that  concession  makes  an  in- 
equality in  rates  between  shippers  for  the  same  service.  Com- 
peting shippers  in  this  case  were  not  in  fact  injured  by  the  con- 
cession, as  they  were  compelled  to  pay  for  cartage  in  any  event. 
The  only  effect  was  to  give  the  shipper  two  competing  lines  at 
the  same  rate,  and  to  give  the  carrier  an  opportunity  to  handle 
traffic  from  which  otherwise  it  was  cut  off.  "While  it  could  have 
been  contended  that  the  circumstances  were  substantially  dis- 
similar, and  that  such  a  discriminative  rate  for  the  purpose  of 
securing  business  was  not  within  the  intent  of  the  section,  the 
construction  declared  in  this  case  makes  such  a  concession  un- 


§    202]  THE  INTERSTATE   COMMERCE   ACT.  287 

lawful,    altlionsli   extended   to   all    "similarly   circumstanced," 
that  is,  to  all  making  the  same  shipment. 

§  201  (152).  The  party  rate  case. — It  was  ruled  by  the  com- 
mission, 1  I.  C.  C.  K.  2US,  1  Int.  Com.  Rep.  611,  that  under  tliis 
section  reduced  land  explorers'  tickets  and  settlers'  tickets,  and 
special  rates  to  immigmnts,  3  I.  C.  C.  R.  652,  2  Int.  Com.  Rep. 
804,  were  illegal  as  discriminating  under  this  section.  The  same 
ruling  was  made  in  the  case  of  party  rate  tickets,  that  is,  tickets 
sold  at  reduced  rates  and  entitling  a  number  of  persons  to  travel 
together  on  a  single  ticket  or  otherwise,  were  an  unjust  discrim- 
ination against  other  passengers  and  illegal.  This  ruling  how- 
ever was  disapproved  by  the  circuit  court,  43  Fed.  Rep.  37,  and 
also  by  the  supreme  court  in  what  is  known  as  the  Party  Rate 
Case,  145  U.  S.  263,  36  L.  Ed.  703.  The  latter  court  said  that 
party  rate  tickets,  which  were  used  principally  by  theatrical  and 
operatic  companies  for  transportation  of  their  troupes,  would 
hardly  fall  within  the  meaning  of  mileage  or  excursion  or  com- 
mutation tickets  within  the  exception  of  section  22,  but  that  did 
not  make  the  tickets  unlawful.  The  unlawfulness  defined  by 
section  2  consisted  in  an  unjust  discrimination.  It  was  the  ob- 
ject of  section  22  to  settle  beyond  all  doubt  that  the  discrimina- 
tion between  certain  pei'sons  therein  named  should  not  be  deemed 
unjust ;  but  it  did  not  follow  that  there  might  not  be  other  classes 
of  persons  in  whose  favor  such  discrimination  was  made  without 
such  discrimination  being  unjust,  and  that  the  section  was 
illustrative  rather  than  exclusive.  The  object  of  such  party  rate 
tickets  was  to  induce  m.ore  people  to  travel,  and  to  secure  patron- 
age that  would  not  otherwise  be  secured.  After  a  re\aew  of  the 
Engli.sh  cases  construing  the  English  act  of  1854,  the  court  said 
that  the  substance  of  all  those  decisions  was  that  the  railroad 
companies  were  only  bound  to  gi\e  the  same  terms  to  all  persons 
alike  under  the  same  circumstances  and  conditions,  and  that 
any  fact  that  produced  change  in  condition  and  different  cir- 
cumstances and  conditions  justifies  an  inequality  of  charge. 

§  202  (153).  Wholesale  and  retail  rates  in  freight  traffic. — 
In  the  ease  of  Hoover  v.  Pennsylvania  Railroad  Co.,  supra,  the 
court  based  its  ruling  upon  this  Party  Rate  decision,  and  applied 
the  principle  to  a  discrimination  in  favor  of  manufacturing  in- 


2SS  THE    INTERSTATE    COMMERCE    ACT,  [SECTION    2 

dustries  which  would  contribute  to  the  business  of  the  railroad. 
In  one  of  the  ejjrly  eases  before  the  commission,  the  Providence 
Coal  Company  Case,  I.  C.  C.  E.  107, 1  Int.  Com.  Rep.  363,  decided 
in  1SS7,  soon  after  the  organization  of  the  commission,  it  was 
held  in  an  opinion  by  Judge  Cooley,  that  the  analogy  of  whole- 
sale and  retail  purchasers  of  merchandise  could  not  be  extended 
to  a  discrimination  in  freight  rates  based  solely  upon  the  amount 
of  shipment.  The  cases  were  not  analogous,  since  the  naming  of 
the  quantity  of  freight  Avliich  should  be  compared  to  wholesale 
purchasers  must  necessarily  be  altogether  arbitrary.  In  this 
case  a  discount  of  ten  per  cent  was  allowed  on  30,000  tons,  and 
it  seemed  there  was  only  one  dealer  who  could  make  that  ship- 
ment. Judge  Cooley  added:  "A  railroad  company  if  allowed  to 
do  so  might  in  this  way  hand  over  the  whole  trade  along  its  road 
to  a  single  dealer,  for  it  might  at  law  make  a  discount  equal  to 
or  greater  than  the  ordinary  profit  in  trade,  and  competition  by 
those  who  would  not  get  the  discount  would  then  be  out  of  the 
question.  The  30,000  ton  limit  was  unreasonable  and  unlawful 
because  necessarily  resulting  in  unjust  discrimination.  It  was 
said  also  that  the  distinction  between  carload  and  less  than  car- 
load lots  was  readily  understood  and  appreciated,  but  that  dis- 
crimination to  be  valid  must  be  based  on  the  distinction  involved 
in  the  cost  of  handling. 

This  ruling  of  the  commission,  it  will  be  seen,  is  in  harmony 
with  the  recent  trend  of  judicial  opinion  as  to  the  common  law 
right  of  discrimination;  that  is,  that  it  must  be  based  upon  a 
difference  of  the  cost  of  service,  and  not  upon  the  mere  fact  of 
a  larger  shipment.  This  was  directly  ruled  in  United  States  v. 
Tozer,  39  Fed.  369,  eastern  district  of  Missouri,  in  a  case 
where  the  defendant,  a  railroad  agent,  was  indicted  for  paying 
rebates  in  violation  of  section  2  of  the  act.  The  court,  Thayer, 
J.,  charged  the  jury  that  the  fact  that  the  defendants  received 
much  more  traffic  from  one  shipper  than  from  another  did  not 
make  the  circumstances  and  conditions  under  which  the  two  serv- 
ices were  rendered  substantially  dissimilar. 

It  will  be  observed  hovrever  that  the  discrimination  in  favor  of 
the  larger  shipper  could  in  some  cases  be  justified  on  the  ground 
of  a  difference  in  the  cost  of  service,  as  it  is  recognized  that  as 
a  rule  the  proportionate  expense  of  handling  and  carriage  is 


§    203]  TIIIO   INTERSTATE   COMMERCE   ACT.  289 

rcdiicGtl  witli  the  increase  of  (jnaiitity.  Divested  of  all  considera- 
tions of  public  policy,  a  carrier  might  well  afford  to  give  a  special 
rate  in  view  of  the  assurance  of  a  certain  quantity  for  shipment. 
This  was  recognized  in  the  Nicholson  v.  G.  W.  R.  Co.  case,  supra. 
The  really  controlling  consideration  is  that  of  piihlic  policij  in 
this  refusal  to  apply  the  analogy  of  wholesale  and  retail  sales  to 
freight  rates.  It  is  because  the  power  to  discriminate  in  favor 
of  a  larger  shipper,  whatever  the  business  inducement,  is  neces- 
sarily injurious  to  business  competitors  who  cannot  make  such 
shipments,  and  therefore  tends  to  monoply. 

§  203  (154).  Wholesale  rates  in  freight  and  passenger  traffic 
distinguished. — There  is  another  ground  however  for  the  clear 
diU'erentijition  of  discrimination  in  passenger  rates  on  the  basis 
of  the  number  carried  in  party  rate  tickets,  from  a  like  discrim- 
ination in  the  case  of  freight  rates.  No  one  is  injured  or  can  be 
injured  by  the  issue  of  passenger  tickets  at  a  reduced  rate, 
whereas  in  tlie  case  of  freight  rates  based  upon  the  amount  of 
ship7nent,  the  effect  might  be  to  put  out  of  business  all  but  the 
favored  shii)per  whose  business  was  large  enough  to  ship  the  re- 
quisite amount.  This  distinction  was  commented  upon  by  the 
supreme  court  in  the  Pj'.rty  Kate  ease,  where  the  court  said  at 
page  280:  ''If  for  cxami)le  the  railroad  makes  the  public  gener- 
ally a  certain  rate  of  freight  and  to  a  particular  individual  re- 
siding in  the  same  town  a  reduced  rate  for  the  same  class  of 
goods,  this  may  operate  as  an  undue  preference,  since  it  enables 
the  favored  party  to  sell  his  goods  at  a  lower  price  than  his  com- 
petitors, and  may  enable  him  to  obtain  a  complete  monoply  of 
that  business.  Then  if  tlie  same  reduced  rate  be  allowed  to 
everyone  doing  the  same  amount  of  business,  such  discrimination 
may  if  carried  too  far  operate  unjustly  upon  the  smaller  dealers 
engaged  in  tlie  same  business,  and  enable  the  larger  ones  to  drive 
them  out  of  the  market.  The  same  result  however  does  not  follow 
from  the  sale  of  tickets  for  a  number  of  persons  at  a  less  rate 
than  for  a  single  passenger ;  it  does  not  operate  to  the  prejudice 
of  the  single  passenger,  who  cannot  be  said  to  be  injured  by  the 
fact  that  another  is  enabled  at  a  particular  instance  to  travel  at 
a  less  rate  than  he.  If  it  operates  unjustly  toward  any  one,  it  is 
the  rival  road  which  has  not  adopted  corresponding  rates;  but 
19 


290  THE    INTERSTATE    COMMERCE    ACT.  [SECTION   2 

as  before  observed,  it  was  not  tlie  desig-n  of  the  act  to  stifle 
competition,  nor  is  there  any  legal  injustice  in  one  person's  pro- 
curing a  particular  service  cheaper  than  another." 

§  204  (155).  Discrimination  not  unjust  when  based  on  spe- 
cial service. — ^While  discrimination  based  merely  on  the  quan- 
tity shipped  is  not  justified,  discrimination  is  proper  when  it  is 
based  on  a  difference  in  the  cost  of  handling.  In  any  event 
however,  whatever  the  basis,  the  reduced  rate  must  be  open  to 
all  alike  complying  with  the  same  conditions,  and  the  rate 
must  be  published  as  provided  in  section  6.  Thus  if  any  acces- 
sorial services  are  rendered  by  the  carrier,  such  as  cartage,  the 
circumstances  and  conditions  are  clearly  dissimilar.  See  Detroit, 
Grand  Haven  &  ]\Iilwaul:ee  Railroad  Co.  v.  Interstate  Commerce 
Commission,  supra. 

"Where  a  special  ser\ice  is  required  of  the  carrier,  such  as 
rapid  transit  and  speedy  delivery,  or  refrigeration  in  transit,  a 
higher  rate  than  for  ordinary  freight  is  warranted.  If  the  car- 
rier charging  a  rate  for  such  special  service  fails  to  render  it, 
to  the  damage  of  the  shipper  and  without  legal  excuse,  the  remedy 
of  the  latter  is  by  proper  proceeding  at  law.  5  I.  C.  C.  R.  529, 
4  Int.  Com.  Rep.  205 ;  4  I.  C.  C.  R.  588,  and  3  Int.  Com.  Rep.  554. 

This  principle  was  applied  in  a  case,  Wilson  v.  Atlantic 
Coast  Line  R.  Co.,  129  Fed.  Rep.  774,  where  it  was  held  that  a 
railroad  company  was  not  required  as  a  common  carrier  to  take 
a  circus  train,  a  part  of  which  is  loaded  with  wild  animals,  and 
transport  the  same  over  its  line,  but  it  may  refuse  to  transport 
such  train  except  under  special  contract  limiting  its  liability 
from  that  ordinarily  assumed  by  a  common  carrier.  See  also 
Chicago,  Milwaukee  &  St.  Paul  R.  Co.  v.  Wallace,  66  Fed. 
506,  14  C.  C.  A.  257,  7th  Circuit,  and  30  L.  R.  A.  161.  In  these 
cases  the  question  was  one  of  the  right  of  the  carrier  to  make 
special  contracts  for  such  special  class  of  freight  and  to  become 
in  effect  private  cJirriers  thereof.  It  would  follow  that  the  car- 
rier would  have  a  right  to  make  special  charges  therefor  without 
unjust  discrimination. 

Thus  there  was  held  to  be  no  discrimination  in  a  preferential 
rate  to  tank  shippers  as  against  barrel  shippers,  in  the  transpor- 
tation of  oil.  Penn  Refining  Co.  v.  W.  N.  Y.  &  P.  R.  Co.,  208  U. 
S.  208,  52  L.  Ed.  456,  affirming  the  court  of  appeals  of  the 


§    205]  TDE   INTERSTATE   COMMERCE   ACT.  291 

third  circuit,  153  Fed.  343.  The  shippers  in  this  case  furnished 
their  own  tnnks  and  the  carrier  had  information  that  the  trans- 
portation by  tank  cars  was  more  remunerative  to  the  shipper 
than  tlie  transportation  by  barrels.  The  latter  shippers  had 
made  no  demand  for  tank  cars,  and  could  not  have  used  them 
econoTnically  on  account  of  the  lack  of  facilities  for  unloading. 
It  was  held  there  was  no  discrimination  in  charging  a  rate  which 
was  not  unreasonable  in  itself,  which  was  higher  for  barrels  than 
the  tank  cars  owned  b}^  tlie  shippers.  See  also  Interstate  Com- 
merce Commission  v.  Chicago  G.  W.  R.  Co.,  209  U.  S.  108,  52  L. 
Ed.  705,  affirming  HI  Fed.  1003,  where  held  that  the  cost  of 
carriage  and  risk  of  injury  might  excuse  a  higher  rate  on  live 
stock  than  on  dressed  meats  and  packing  house  products. 

§  205  (156).  Carload  and  less  than  carload  rates. — The 
phrase  ''under  similar  circumstances  and  conditions"  has  always 
been  discussed  with  reference  to  the  proper  vnit  of  freight 
charges,  whether  carload  or  less  than  carload,  and  of  the  proper 
basis  for  discrimination  between  carload  rates  and  less  than  car- 
load rates.  It  will  be  seen  that  on  this  point  the  interest  of  lo- 
calities is  directly  involved.  Thus  the  great  centres  of  distribu- 
tion opposed  the  differential  for  the  sake  of  encouraging  less 
than  carload  shipments  to  other  parts  of  the  couutr}^  while  ship- 
pers at  interior  points,  desiring  themselves  to  distribute  to  their 
respective  territories,  strongly  favored  a  liberal  differential  be- 
tween the  carload  and  less  than  carload  rate. 

This  subject  was  exhaustively  considered  in  the  Thurber  case. 
3  I.  C.  C.  R.  473,  2  Int.  Com.  Rep.  742.  Although  it  was  con- 
tended by  the  western  jobbers  that  the  carload  rate  was  the 
proper  and  recognized  unit,  the  commission  said  that  it  was  a 
sound  rule  for  the  carriers  to  adapt  their  classification  to  the  laws 
of  trade.  If  an  article  moves  with  sufficient  volume  and  the  de- 
mands of  commerce  will  be  better  served,  it  is  reasonable  to  give 
it  a  carload  classification  and  rate.  The  carload  is  probably  the 
only  practicable  unit  of  quantity,  and  the  fact  that  an  antecedent 
condition,  when  no  such  distinction  existed  and  perhaps  was  not 
reriuired,  furnish  no  argument  for  a  return  to  a  condition  no 
longer  suited  to  the  requirements  of  business.  It  was  therefore 
impracticable  and  would  seriously  demoralize  classification  in 
business  to  attempt  to  restore  equal  rates  for  carload  and  less 


292  THE    INTERSTATE    COMMERCE   ACT.  [.SECTION    2 

than  carload  slnpments  in  respect  of  goods  properly  so  classified. 
It  was  said  however  that  the  public  was  more  largely  interested 
in  miscellaneous  tJian  in  carload  shipments  of  any  one  kind  of 
traffic,  and  that  differences  ranging  from  forty  to  one  hundred 
per  cent,  between  the  carloads  and  less  than  carloads  were  un- 
reasonable and  unjust  especially  upon  articles  of  general  and 
necessary  use,  as  so  great  a  difference  would  be  destructive  of 
competition  between  large  and  small  dealers. 

While  the  circumstances  and  conditions  in  respect  to  the 
work  done  by  the  carrier  and  the  revenue  earned  are  dissimilar 
in  the  transportation  of  freights  in  carloads  and  less  than  car- 
loads, and  a  lower  rate  on  carloads  than  on  less  than  carloads 
is  therefore  not  in  contravention  of  the  statute,  yet  the  difference 
between  the  two  rates  must  be  reasonable.    9  I.  C.  C.  R.  78. 

See  also  9  I.  C.  C.  R.  318,  where  the  commission  discussed  the 
proper  differential  between  carload  and  less  than  carload  rates 
from  the  middle  west  to  the  Pacific  coast. 

The  determination  of  what  commodities  are  properly  allowed 
carload  rates  may  involve  the  matter  of  undue  preference  against 
particular  kinds  of  traffic  under  sec.  3.  See  4  I.  C.  C.  R.  212,  3 
Int.  Com.  Rep.  257,  infra,  §  266. 

§  206  (157).  Discrimination  in  application  of  carload  rates. 

In  9  I.  C.  C.  R.  620,  the  commission  discussed  the  right  of  a 
carrier  in  according  a  carload  rating  to  look  beyond  the  trans- 
portation itself  to  the  oivnership  of  the  p^^operty  transported. 
The  railroad  in  that  case  declined  to  alio  /  a  combination  of 
carriages  in  carload  lots  at  carload  rates,  and  insisted  on  allow- 
ing the  carload  rate  only  where  the  shipment  was  from  one  con- 
signor to  one  consignee,  thus  denying  the  right  of  a  forwarding 
agent  shipping  the  goods  of  different  parties  at  a  carload  rate. 
The  commission  ruled  that  there  should  be  no  discrimination  be- 
tween consignor  and  consignee  in  the  allowance  of  carload  rates, 
when  the  conditions  of  the  ownership  after  the  property  was  de- 
livered to  the  carrier  was  the  same.  But  no  opinion  was  ex- 
pressed on  the  further  question  whether  the  carrier  could  dis- 
tinguish between  a  forwarding  agent  and  the  actual  owner. 

In  Tjundquist  v.  Grand  Trunk  Railway  C6.,  121  Fed. 
915,  it  was  held  that  a  carrier  could  properly  distinguish  be- 
tween the  forwarding  agent  and  the  owner  of  the  property,. 


§    207]  THE  INTERSTATE    COMMERCE   ACT.  293 

and  could  api)]y  the  carload  rating  when  the  goods  were  tendered 
for  shipment  by  the  owner  and  refuse  it  when  the  like  traffic 
was  oifered  by  the  forwarder.  The  court  said  however  that 
it  was  "a  pioneer  case,  and  little  aid  could  be  obtained  from 
authoritative  sources."  A  different  ruling  was  made  in  England 
as  to  the  Englisli  statute,  CJi'cat  AVestern  Railroad  v.  Sutton,  L. 
Rep.  i  II.  L.  238,  the  court  holding  that  like  circumstances  re- 
ferred to  the  carriage  of  the  property  and  that  the  carrier 
could  not  impose  a  higher  rate  when  offered  by  an  agent  than 
when  offered  by  the  owner.  In  tlie  Lundquist  case  the  court  said 
that  tlie  Englisli  "statute  was  much  more  explicit  in  its  terms  than 
the  Interstate  Commerce  Act,  in  that  it  provided  that  all  toll 
should  be  charged  equally  to  all  persons ;  but  even  if  it  were  not 
so,  it  was  not  probable  that  our  courts  would  be  called  upon  to 
follow  the  English  courts,  as  the  cases  were  so  different.  It 
would  seem,  however,  doubtful  whether  the  employment  of  a  for- 
warding agent  constitutes  a  difference  in  the  circumstances  and 
conditions  warranting  discrimiui^tion  by  the  carrier. 

§  207.  The  supreme  court  on  forwarding  agents  in  carload 
rates. — It  was  subsequently  ruled  by  the  commission  both  as  to 
express  companies  (14  I.  C.  C.  R.  422),  and  as  to  railroads  (14  I. 
C.  C.  R.  437),  that  the  carrier  could  not  properly  look  beyond  the 
transportation  to  the  ownership  of  the  shipment  as  the  basis  for 
determining  the  applicability  of  its  rates,  and  that  the  rules  of 
the  official  classifications,  providing  that  defendants  should  col- 
lect a  greater  compensation  for  car  load  shipments  when  made 
by  forwarding  agents  of  different  shippers,  were  unjustly  dis- 
criminatory and  unreasonable.  This  ruling  was  disapproved  by 
a  majority  of  the  circuit  court  of  the  southern  district  of  New 
York  in  Delaware,  L.  &  N.  C.  Co.  v.  Interstate  Commerce  Com- 
mission, 166  Fed.  499,  and  the  enforcement  of  the  order  of  the 
commission  was  enjoined. 

The  question  was  definitely  determined,  however,  by  the  su- 
preme court  in  support  of  the  ruling  of  the  commission,  in  220 
U.  S.  p  235,  55  L.  Ed.  (April.  1911),  where  the  court  reversed 
the  circuit  court,  and  held  that  the  ownership  or  non-ownership 
by  the  shipper  of  the  goods  tendered  for  carriage  was  not  a  dis- 
similar circumstance  and  condition  within  the  meaning  of  sec- 
tion 2  of  the  act,  and  that  a  forwarding  agent  was  a  person 


294  THE    INTERSTATE    COMMERCE    ACT.  [PeCTION   2 

within  the  meaning  of  the  act.  The  court  adopted  the  settled 
construction  of  the  equality  clause  of  the  English  Act  and  held 
that  the  circuit  court  erred  in  annulling  the  order  of  the  commis- 
sion. 

§  208.  Discrimination  in  carload  rates. — The  right  to  make 
carload  and  less  than  carload  rates  carries  with  it  the  right  of 
the  carrier  to  fix  the  minimum  rate  and  charge  for  the  transpor- 
tation of  less  than  carload  shipments  on  account  of  the  necessary 
expense  and  trouble  attending  the  carriage  of  such  shipments, 
which  aside  from  the  actual  manual  labor  involved  are  practically 
the  same  irrespective  of  the  bulk  of  the  package.  The  question 
in  such  cases  is  whether  or  not  the  rate  is  reasonable  and  not  un- 
justly discriminative.  In  10  I.  C.  C.  R  412,  it  was  ruled  that  the 
minimum  charge  upon  a-ny  single  shipment  of  freight  should  be 
for  one  hundred  pounds,  and  that  the  class  or  commodity  rate  of 
a  certain  property  was  not  unreasonable  or  unjustly  discrimina- 
tive in  its  application  to  the  traffic  in  question. 

§  209  (158).  Cargo  rates  discriminative. — The  principle  of 
the  carload  as  the  only  practicable  unit  of  quantity  was  discussed 
in  7  I.  C.  C.  R.  218,  where  it  was  strongly  intimated,  though  not 
finally  decided,  that  a  lower  rate  made  by  the  carrier  on  cargo 
lots,  being  ten  thousand  bushels  of  oats  and  eight  thousand 
bushels  of  other  grains,  than  on  carload  lots  in  export  shipments, 
or  in  shipments  made  to  the  seaboard  for  export,  violated  the 
rule  of  equality  and  constituted  an  unjust  discrimination.  It 
■was  said  that  this  limit  of  the  lower  rate  would  require  about  ten 
carloads,  and  that  the  effect  would  be  to  throw  the  business  into 
the  hands  of  the  large  dealers,  the  margin  of  profit  being  very 
small  and  the  opportunity  afforded  for  the  manipulation  of 
prices  at  seaboard  points  would  be  increased. 

As  to  discrimination  based  on  differential  in  favor  of  ten  car- 
loads of  cattle,  see  10  I.  0.  C.  R.  827. 

Any  regulation  not  justified  by  the  increased  cost  of  service 
and  which  tends  to  discriminate  between  shippers  according  to 
the  amount  of  traffic  is  unreasonable.  Thus  making  certain 
charges  for  the  transportation  of  coal  shipped  in  carloads  when 
the  coal  is  loaded  by  tipple,  that  is  from  platforms  and  chutes, 
and  exacting  a  higher  charge  when  it  was  loaded  in  some  other 


§    210]  THE   INTERSTATE   COMMERCE   ACT.  295 

way,  and  for  that  reason  was  found  in  10  I.  C.  C.  B.  226,  not  to 
be  justified  by  a  difference  in  the  cost  to  the  carrier,  and  that  the 
higher  rate  was  discriminatory'  against  the  small  shippers. 

§  210  (159).  Different  forms  of  discrimination. — Any  special 
rate,  rebate,  drawback  or  other  device  wlicreby  disr-rimination 
is  effected,  is  prohibited.  Thus  there  may  be  discrimination  in 
any  accessory  service  charge,  as  in  demurrage,  see  ]\Iichie  v. 
R.  R.  Co.,  supra,  where  charge  of  discrimination  was  not  sus- 
tained in  the  service  of  ears,  9  I.  C.  C.  R.  207 ;  in  the  manufact- 
urer's  rate  on  coal,  5  I.  C.  C.  R.  4G6,  4  Int.  Cora.  Rep.  157;  in 
rebates  for  the  use  of  live  stock  or  private  cars,  4  I.  C.  C.  R.  630, 
3  Int.  Com.  Rep.  502 ;  or  in  the  exaction  of  unreasonable  rent  for 
private  cars,  4  I.  C.  C.  R.  131,  3  Int.  Com.  Rep.  162.  All  forms 
of  secret  rates  and  drawbacks  are  prohibited,  1  I.  C.  C.  R.  480, 
1  Int.  Com.  Rep.  764.  Discrimination  may  be  effected  by  unjust 
classification,  4  I.  C.  C.  R.  535,  3  Int.  Com.  Rep.  460;  or  by 
commissions  paid  to  soliciting  agents,  2  I.  C.  C.  R.  513,  2  Int. 
Com.  Rep.  340;  also  combination  rates  less  than  tariff  rates 
are  illegal,  2  I.  C.  C.  R  1,  2  Int.  Com.  Rep.  1.  Any  form  of 
discriminating  preference  is  in  violation  of  the  statute,  2  I.  C. 
C.  R.  90,  2  Int.  Com.  Rep.  67. 

Discrimination  violative  of  this  section  may  be  effected 
through  underbilling  the  weight  of  freight,  or  giving  it  a  false 
classification,  whereby  less  compensation  is  paid  by  one  per- 
son than  by  another  for  a  like  and  contemporaneous  service. 
In  the  report  of  the  commission  upon  this  subject,  supra,  in 
1888,  it  was  said  that  this  method  of  discrimination  had  been 
extensively  employed,  and  it  reviews  the  evidence  taken  by 
the  commission  in  their  investigation.  Under  the  recommenda- 
tion of  the  commission,  section  10  of  the  act  was  amended,  impos- 
ing penalties  upon  the  shipper  who  by  false  classification,  falsQ 
weighing,  or  false  report  of  weight,  or  by  other  devices,  know- 
ingly or  wilfully  obtain  transportation  of  their  property  at 
less  than  the  regular  rate.  See  infra,  section  10.  As  to  dis- 
crimination in  billing  at  net  weight,  see  4  I.  C.  C.  R.  87,  3  Int. 
Com.  Rep.  131;  9  I.  C.  C.  R.  440. 

Another  form  of  discrimination  is  in  the  use  of  private  cars, 
as  where  freight  cars  are  either  owned  by  the  shipper  or  a 
private  car  line.     See  supra,  §  155.     The  commission  says  in 


296  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    2 

its  annual  report  for  1904  that  the  private  car  may  be  of  ad- 
vantage to  the  carrier  by  enabling  it  to  provide  equipment  for 
special  service  during  limited  periods,  and  tlie  equipment  is 
likely  to  be  more  adequate  for  the  public,  than  for  the  carrier 
to  undertake  to  own  the  cars  itself  or  to  secure  them  from  its 
own  connections.  Concessions  however  were  made  in  the  use 
of  such  charges  to  particular  shippers,  which  amounted  to  the 
payment  of  a  rebate,  and  when  the  owner  of  the  car  be- 
came a  dealer  in  the  commodity  transported,  the  fact  of  own- 
ership gave  him  an  important  advantage  over  his  competitor. 
A  contract  of  a  lumber  company  with  a  railroad  by  which 
it  agi'eed  to  build  a  tie  hoist  for  loading  ties  on  the  railroad 
company  cars,  and  to  haul  the  ties  to  a  certain  point  for  eight 
dollars  and  a  half  a  car  and  return  ten  per  cent. — when  the 
freight  was  received  to  apply  on  the  cost  of  the  hoist,  the  rate 
given  being  materially  less  than  the  published  rate, — this  was 
held  by  the  court  of  appeals  of  the  fourth  circuit  to  be  an  illegal 
discrimination  and  unenforcible.  See  C.  &  0.  R.  R.  v.  Standard 
Lumber  Co.,  174  Fed.  107,  1909.  Though  the  refusal  of  an  inter- 
state carrier  to  furnish  cars  for  the  shipment  of  cross  ties,  while 
furnishing  them  to  others  for  interstate  shipments  to  save 
freight,  constituted  a  discrimination,  and  that  as  cross  ties  were 
included  in  the  term  "lumber,"  it  would  constitute  a  discrimina- 
tion for  the  railroad  to  place  them  in  another  classification,  see 
American  T.  T.  Co.  v.  Kansas  City  Southern,  175  Fed.  28,  in 
the  circuit  court  of  the  fifth  circuit,  1909. 

§  211.  Discrimination  in  restricted  rates. — In  20  I.  C.  R.  R, 

p.  426.  the  commission  reaffirmed  its  conference  rulings  (see 
rules  34  and  225,  conference  rulings  bulletin  No.  4)  tliat  railroad 
tariffs  which  named  rates  for  the  transportation  of  coal  for 
railroad  use  more  than  the  rates  applicable  to  the  transportation 
for  commercial  coal  between  the  same  points,  was  an  unjust  dis- 
crimination and  unlawful.  It  ruled  that  a  tariff  providing  for 
reduced  rates  on  coal  used  for  steam  purposes,  or  that  the  carrier 
would  refund  part  of  the  regular  carrier  charge  on  the  presen- 
tation of  evidence  that  the  coal  was  so  used,  was  improper  and 
unlawful,  that  is  to  say,  that  the  carrier  had  no  right  to  attempt 
to  dictate  the  uses  to  which  commodities  transported  by  it  shall 
be  put  in  order  to  enjoy  a  transportation  rate.  The  carriers 
were,  therefore,  ordered  to  desist  from  maintaining  tariffs  which 


§    212]  THE   INTERSTATE   COMMERCE    ACT.  297 

contained  rates  applicable  wholly  upon  sliipinonts  for  a  particu- 
lar consignee,  or  when  the  commodity  transported  is  for  the  par- 
ticular use  or  rates  that  are  restricted  to  the  use  of  certain  ship- 
pers and  not  open  to  all  shippers  alike. 

It  was  also  ruled  that  a  carrier  may  not,  as  .sliippcr  over  the 
lines  of  another  carrier,  be  given  any  preference  in  the  applica- 
tion of  tariff  rates  on  interstate  shipments ;  but  it  may  lawfully 
and  properly  take  advantage  of  legal  tariff  joint  rates  applying 
to  a  convenient  junction  or  other  points  in  its  own  line,  pro- 
vided such  shipments  are  consigned  tlirough  to  such  points  from 
point  of  origin  and  are  in  good  faith  sent  to  such  billed  destina- 
tion. In  this  construction  of  section  2  the  commission  cited  the 
"Wight  case,  sirpra,  and  also  the  case  of  Pa.  R.  R.  Co.  v.  Interna- 
tional Coal  aiining  Company,  173  Fed.  1,  where  the  courts  con- 
demned the  charging  of  a  higher  rate  on  so-called  free  coal  than 
on  contract  coal.  See  also  ^litchell  Coal  &  Coke  Co.  v.  P.  R.  R. 
Co.,  81  Fed.  403.  On  this  subject  see  also  11  I.  C.  C.  R.  104;  16 
I.  C.  C.  R.  246,  512. 

The  Commissioner  Prouty  dissented,  agreeing  that  the  rate 
could  not  be  varied  according  to  the  use  to  which  the  article  is 
put.  but  he  thought  that  the  movement  of  coal  for  railroad  fuel 
supply  so  different  from  the  movement  of  coal  for  private  use 
that  a  different  system  of  rate  making  could  properly  be  applied 
to  its  transportation. 

§  212.  Discrimination  through  industrial  tap  lines  and  plant 
facilities. — The  discrimination  effected  through  allowances 
made  by  regular  carriers  to  so-called  tap  lines  and  plat  facilities, 
whether  formally  organized  as  railway  corporations  or  not,  has 
been  extensively  considered  by  the  commission.  Thus  in  17  I. 
C.  C.  R.  338,  the  Star  Grain  &  Lumber  Co.  case,  it  was  ruled 
that  the  commission  could  not  recognize  as  common  carriers 
under  the  act  any  of  the  lines,  that  did  not  publish  tariffs  in  ample 
form,  or  concur  properly  in  the  lawful  carriage  of  other  lines,  or 
did  not  file  annual  reports  and  keep  their  accounts  in  accordance 
with  the  form  prescribed  by  the  commission,  or  that  did  not  in  all 
respects  comply  with  the  law.  That  even  if  the  tap  line  or  in- 
dustrial line  was  duly  incorporated  and  complied  with  the  act 
in  these  respects,  the  commission  would  look  to  the  substance 
and  not  to  form,  in  cases  where  the  line  was  only  a  facility  of 
a  mill  or  its  proprietors.     Any  allowances  or  division  made  to 


298  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    2 

or  Tvith  the  tap  line  that  was  owned  or  controlled  directly  or  in- 
directly by  the  lumber  mill,  or  its  officers  or  proprietors,  and  be- 
yond the  logs  that  it  hauled  to  the  mill  had  no  traffic  except  such 
as  it  might  pick  up  as  a  mere  incident  to  serve  the  mill  as  a  plant 
facility,  would  be  discrimination  or  a  preference  and  an  unlawful 
departure  from  published  rates.  In  this  case  Commissioner 
Prouty  filed  a  separate  opinion,  stating  that  he  did  not  concur 
in  the  belief  that  none  of  the  tap  lines  were  bona  fide  common 
carriers,  and  that  many  of  the  tap  lines  had  developed  into  real 
common  carriers.  See  also  19  I.  C.  C.  R.  50,  and  18  I.  C.  C  R. 
517,  where  the  tap  line  was  constructed  and  used  exclusively  for 
the  company  owning  the  timber.  The  allowances  therefore  to 
the  company  were  clearly  unlawful. 

The  principle  announced  in  these  cases  of  so-called  tap  lines, 
in  the  lumber  districts  was  applicable  to  any  industrial  or  plant 
facility.  Thus  in  14  I.  C.  C.  R.  237,  the  commission  ruled  that 
a  manufacturing  plant  of  the  General  Electric  Company  of 
Schenectady,  which  enclosed  twelve  miles  of  broad  guage  switch- 
ing track  and  seven  miles  of  narrow  guage  electric  switching 
track,  with  its  own  motors  and  engines,  and  a  force  of  men,  parti- 
cularly the  internal  switching,  which  would  be  seriously  inter- 
fered with  by  the  switching  of  the  railroad  if  permitted  access  to 
the  plant,  was  not  entitled  to  compel  the  railroad  to  extend  its 
transportation  obligations  and  to  accept  and  deliver  cars  within, 
the  enclosure  to  meet  the  requirements  of  the  industry. 

The  case  of  the  Crane  Iron  "Works  at  Catasaqua  was  considered 
in  15  I.  C.  C.  R.  248  and  17  I.  C.  C.  R.  514,  where  the  company 
prayed  for  an  allowance  of  two  dollars  per  car  as  its  share  of  a 
through  rate  on  the  Philadelphia  &  Reading  Railroad.  But  the 
commission  ruled  that  whether  the  Crane  Company  was  a  com- 
mon carrier  or  not,  the  service  performed  by  the  railroad 
was  a  plant  facility  and  the  expenses  should  be  borne  entirely  hy 
the  complainant. 

As  to  what  constitutes  a  common  carrier  under  the  act,  see 
supra,  §  137.  A  common  carrier  may  be  sometimes  a  plant 
facility.  That  is,  it  may  be  properly  organized  and  may  do 
business  as  a  common  carrier,  and  yet  be  in  effect  a  plant  facility 
of  its  owner.  In  such  case  the  allowance  of  any  sum  in  excess  of 
a  fair  proportion  of  a  through  rate  would  be  a  discrimination 
violative  of  the  section. 


§    214]  THE  INTERSTATE   COMMERCE  ACT.  299 

§  213  (160).  Discrimination  through  interest  in  connecting 
company. — Another  device  for  ell'eeting  discrimination  is 
thruuyh  the  making  of  a  joint  rate  with  a  connecting  railroad 
controlled  by  the  shipper  out  of  proportion  to  the  value  of  the 
service  and  constituting  in  effect  a  rebate  to  the  shipper.  This 
was  illustrated  in  the  Ilutcliinson  Salt  case,  10  I.  C.  C.  U.  1. 
where  the  commission  found  tliat  the  connecting  railroad  did 
not  own  any  equipment  or  rolling  stock  and  was  not  in  any  way 
engaged  as  a  common  carrier,  and  that  the  granting  of  the  divi- 
sion of  the  through  rate  to  this  connecting  company  was  a  mere 
subterfuge  to  give  a  concession  in  the  rate  and  was  an  unlawful 
discrimination.  In  another  salt  case  involving  the  transporta- 
tion of  salt  westward  from  points  in  Michigan,  where  a  similar 
charge  was  made  as  to  the  alleged  interest  of  the  salt  producer  in 
a  boat  line  on  Lake  JMichigan,  10  I.  C.  C.  R.  148,  the  commission 
found  on  investigation  of  the  facts  that  the  share  of  the  through 
rate  allowed  to  the  boat  line  w^as  not  so  disproportionate  as  to 
amount  to  a  rebate,  and  therefore  that  the  discrimination  was 
not  established.  Discrimination  through  the  devices  of  a  con- 
necting railroad  in  the  division  of  joint  rates  was  further  dis- 
cussed by  the  commission  in  10  I.  C.  C.  R.  385,  in  an  opinion 
filed  Nov.  3,  1904,  wherein  the  commission  reported  the  results 
of  investigation  of  the  divisions  allowed  the  terminal  lines  in 
and  about  the  city  of  Chicago.  It  was  found  that  certain  con- 
necting railroads  were  practically  controlled  by  certain  large 
shippers  and  that  the  amounts  allowed  as  divisions  of  the  through 
rate  were  so  excessive  as  to  constitute  in  elTect  rebates  to  such 
shippers,  and  that  the  amounts  allowed  as  divisions  of  the  through 
specific  charges  had  been  formulated,  no  order  was  made.  The 
commission  ruled  that  to  the  extent  that  these  divisions  exceeded 
the  reasonable  charge  for  the  performance  of  the  service,  they 
were  an  unlawful  preference  and  discrimination  in  favor  of  the 
shipper  owning  the  railroad.  On  this  subject  see  also  the  report 
of  the  commission  for  1904,  pages  19  to  23. 

§  214  (161).  Discrimination  by  carrier  in  favor  of  itself  as  a 
shipper. — A  carrier  can  no  more  discriminate  in  favor  of  itself 
as  producer  and  shipper  than  in  favor  of  any  other  shipper,  said 
Judge  Cooley  in  4  I.  C.  C.  R.  296,  and  3  Int.  Com.  Rep.  302. 

There  is  a  difficulty  in  determining  the  fact  of  discrimination 


300  THE    INTERSTATE    COMMERCE    ACT.  [SECTION   2 

by  a  railroad  in  its  own  favor  as  a  carrier.  Tlins  in  a  proceed- 
ing against  t!ie  Delaware,  Lackawanna  &  Western  Railroad  Com- 
pan3',  3  Int.  Com.  Rep.  302,  and  4  I.  C.  C.  R.  29G,  supra,  it  ap- 
peared that  the  railroad  company  kept  no  separate  account  be- 
tween itself  as  a  carrier  and  itself  as  a  shipper  of  coal,  so  that 
there  was  no  means  of  determining  whether  it  carried  for  re- 
duced rates  as  a  carrier,  or  sustained  a  loss  as  a  dealer.  The  com- 
mission in  that  case  ruled  that  it  had  no  power  to  order  such  an 
account  to  be  kept.  It  could  however  determine  whether  the  rate 
charged  to  the  complainant  was  a  reasonable  one,  and  in  deter- 
mining that  issue  it  could  determine  the  price  at  which  the  rail- 
road company  sold  its  coal,  and  the  extent  of  its  own  profits  upon 
coal  marketed  compared  with  the  rates  charged  other  dealers  for 
transportation,  or  wdiether  it  made  any  profit  at  all,  could  be  in- 
quired into  by  any  tribunal  authorized  to  pass  upon  the  reason- 
ableness of  rates.  The  commission  said  in  the  former  case,  that 
even  if  the  carrier  kept  a  separate  account  showing  what  it 
charged  itself  for  transportation,  and  even  were  such  a  separate 
account  required,  it  would  not  be  a  safe  guide  in  determining 
whether  the  carrier  did  or  did  not  use  its  power  as  a  carrier  op- 
pressively. See  also  case  in  8  I.  C.  C.  R.  630,  another  coal  case, 
involving  the  rates  from  Myrick,  Missouri,  and  from  Rich  Hill, 
the  latter  being  owned  by  the  IMissouri  Pacific  Company.  The 
court  held  that  the  only  remedy  available  to  the  independent 
operator  was  to  secure  a  reasonable  rate,  as  the  carrier  could  so 
adjust  its  rates  that  the  moving  of  the  coal  could  be  conducted  at 
a  loss,  the  profit  being  derived  from  the  carriage,  and  in  that 
event  every  mine  operating  must  operate  at  a  loss. 

In  7  I.  C.  C.  R.  33,  the  railroad  company  owned  the  entire 
stock  of  a  development  company,  which  had  been  organized  for 
the  purpose  of  holding  certain  lands  of  the  railroad  company, 
and  caused  grain  to  be  purchased  in  the  name  of  the  develop- 
ment company  and  transported  over  the  lines  of  the  railroad 
company  and  sold  upon  the  market.  The  commission  said  that 
even  assuming  that  the  development  company  was  an  independ- 
ent entity,  and  that  the  nominal  freight  charges  were  actually 
paid  by  it,  still  it  was  merely  a  tool  in  the  hands  of  the  railroad 
company  and  the  act  accomplished  was  the  act  of  that  company. 
There  was  no  fixed  rate,  and  the  rate  actually  received  was  less 
than  was,  or  would  have  been,  charged  any  other  person  for  the 


^    215]  THE   INTEKSTATE    CUM -M  i;i{<  I:.    ACT.  301 

same  service  under  the  same  conditions.  Here  it  was  said  that 
this  was  a  clear  violation  of  section  2.  The  commission  in  this 
ease  distinguislied  the  coal  cases  above  cited,  saying  that  in  those 
cases  there  was  a  permanent  condition  which  must  be  met,  while 
this  was  an  unlawful  practice  wliich  must  be  stopped. 

In  the  Chesapeake  &  Ohio  Railroad  Company  case,  supra, 
there  was  a  contract  between  the  railroad  company  and  another 
railroad  for  the  sale  of  coal  to  be  transferred  over  its  line  at  a 
price  less  than  the  aggregate  cost  of  the  expense  items  and  its 
own  published  freight  rates.  The  court  held  that  this  transac- 
tion was  not  a  violation  of  section  2,  unless  the  transaction  was 
a  mere  device  to  cover  an  intentional  giving  of  a  less  rate  for 
carriage  to  some  than  to  others,  there  being  no  legal  ground  for 
assuming  that  the  loss  was  sustained  by  it  as  a  carrier  rather 
than  as  a  dealer,  and  also  that  if  the  carrier  did  not  credit  on  its 
books  its  freight  accounts  with  its  published  rate  and  did  not 
charge  the  loss  to  an  account  kept  with  the  article  dealt  in.  there 
would  seem  to  be  an  apparent  violation  of  the  2nd  and  Gth  sec- 
tions of  the  act;  but  at  most  only  a  technical  violation,  as  it  had 
a  right  to  suffer  a  loss  as  a  dealer.  The  court  could  not  find  any 
authority  for  saying  that  the  loss  under  such  a  contract  must 
necessarily  be  treated  as  a  loss  on  carriage,  there  being  no  evi- 
dence in  the  case  affecting  the  good  faith  of  the  contract,  and 
therefore  nothing  whereon  to  base  an  inference  that  the  transac- 
tion was  a  device  to  evade  the  law.  See  "commodity  clause" 
in  amendment  of  190G,  §  157,  supra. 

§  215  (162).  Discrimination  in  storage  of  goods,  etc. — An- 
other form  of  discrimination  condemned  by  the  commission  was 
presented  in  the  complaint  of  the  American  AYarehousemen's  As- 
sociation, 7  I.  C.  C.  R.  556,  which  set  forth  that  a  large  number 
of  railroads  unjustly  discriminated  in  offering  free  storage  of 
freight  in  various  ways  to  some  shippers  and  not  to  others,  in 
failing  to  collect  demurrage  charges  on  cars  detained  by  favored 
shippers,  by  storing  for  some  concerns  large  quantities  of  freight 
and  making  delivery  thereof  in  small  lots  to  purchasers,  and  by 
assuming  expenses  of  unloading,  loading  and  cartage  for  some 
sliippers  and  not  for  others.  A  large  volume  of  testimony  was 
taken  in  different  parts  of  the  country.  The  commission  ruled 
that  the  system  prevailing  was  open  to  grave  abuses,  and  that  the 


202  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    2 

allowance  of  sueli  privileges  as  storage  and  the  lil:e  was  clearly 
forbidden  by  section  2  of  tlie  statute.  The  effect  of  allowing 
special  facilities  for  storage  was  to  provide  a  favored  shipper 
with  branch  business  houses  in  large  cities.  The  investigation 
resulted  in  a  general  oi-der  requiring  carriers  to  state  in  their 
tariffs,  what  free  storage  was  granted  and  the  terms  and  condi- 
tions under  which  it  would  be  granted.  The  commission  said 
that  as  this  procedure  had  been  recommended  by  the  supreme 
court  in  the  Grand  Haven  Free  Cartage  case,  it  was  all  the  more 
applicable  in  the  case  of  storage,  which  was  expressly  mentioned 
in  the  act.  As  to  right  of  carrier  to  contract  for  storage  of 
through  grain  in  elevators  at  terminals  in  transit,  see  10  I.  C.  C. 
R.  309. 

§  216  (163).  Stoppage  in  transit  privileges.— The  privilege 
of  milling  in  transit,  tliat  is  of  stopping  in  transit,  for  the  pur- 
pose of  grinding  grain  into  flour  or  compressing  cotton,  or  saw- 
ing logs  into  lumber,  at  some  point  in  transit,  and  then  shipping 
the  manufactured  or  compressed  product  forward  at  the  through 
rate,  has  been  discussed  in  several  cases  by  the  commission.  See 
infra,  §  234.  In  8  I.  C.  C.  R.  121,  the  commission  commended  the 
practice  in  a  case  of  cotton  shipment,  saying  that  it  benefited 
both  the  railroad  company  and  the  producer  and  tended  to  place 
non-competitive  points  upon  equality  with  more  distant  competi- 
tive localities  from  which  lower  rates  were  in  force.  Such  privil- 
eges may  be  granted  or  withheld  by  the  carrier. 

The  receiving  of  cotton  from  a  shipper  and  having  it  com- 
pressed at  a  station  en  route  and  reshipping  to  eastern  points  at 
the  rate  equal  to  the  published  through  rate  is  not  an  unlawful 
discrimination  under  section  2,  when  all  parties  are  entitled  to 
the  same  privilege.  Cowen  v.  Bond,  39  Fed.  54  (So.  Dist. 
of  l\Iiss.).  It  is  immaterial  in  such  case,  that  the  arrangements 
are  made  to  induce  buyers  to  believe  that  the  cotton  was  actually 
raised  in  different  localities  than  where  it  was  in  fact  raised,  as 
the  deception  could  not  be  imputed  to  the  railroad  company. 
But  when  the  privilege  is  extended,  it  must  be  extended  to  all 
in  the  same  conditions  and  "similarly  situated."  See  infra, 
section  3. 

The  mere  fact  of  the  payment  of  a  local  rate  to  the  manufac- 
turing or  compressing  point  is  not  material,  if  there  was  from 


§    217 J  THE   INTERSTATE   COMMERCE    ACT.  303 

the  first  an  agreement  that  the  property  should  be  entitled  to 
the  privilege,  and  it  goes  forward  from  the  compressing  or 
manufacturing  point  upon  a  through  bill  from  the  point  of 
origin  to  the  destination. 

Another  application  of  the  milling  in  transit  privilege  was 
illustrated  in  30  I.  C.  C.  R.  193,  in  the  making  of  a  through 
rate  on  lumber  with  allowance  of  a  proportion  of  a  rate  for 
cost  of  moving  the  lumber  by  a  "tap  line"  from  the  forest  to 
the  mill.  The  commisson  ruled  that  this  allowance  could  only 
be  made  to  another  conuiion  carrier,  and  could  not  be  granted  to 
a  shipper  as  compensation  for  cost  of  moving  the  lumber  to  the 
mill. 

In  Laurel  Cotton  Mills  v.  Gulf  &  S.  I.  Railroad  Co.,  the  su- 
preme com^t  of  Mississippi  in  June,  1904,  37  So.  Rep.  134,  sus- 
tained a  right  of  recovery,  that  is,  it  held  a  petition  not  demur- 
able  under  a  contract  by  a  railroad  with  a  manufacturer  about 
to  erect  a  cotton  mill  to  give  it  a  milling  in  transit  rate  not  ex- 
ceeding certain  rates  to  certain  competitive  points.  The  court 
adopted  and  followed  the  opinion  of  the  commission  in  the 
lumber  tap  line  case  above  cited  as  to  the  legality  of  a  milling  in 
transit  rate. 

§  217  (164).  Unjust  discrimination  through  abuse  of  stop- 
page in  transit  privileges. — While  the  commission  has  recog- 
nized and  approved  the  allowance  of  through  rates  in  cases 
of  stoppage  in  transit  for  purpose  of  milling  wheat  into  flour 
and  compressing  cotton,  so  as  to  facilitate  the  movement  of  the 
great  staples  of  the  country  to  market,  this  privilege  has  been 
sought  to  be  applied  to  cases  where  there  was  no  manufacture 
or  compressing,  but  where  the  effort  was  to  secure  a  through 
rate  when  property  was  stored  for  a  time  at  an  intermediate 
point  on  the  through  line.  Thus  shipments  of  grain  were  carried 
to  Kansas  City  from  points  west  thereof  at  local  rates,  and  after- 
wards shipped  and  rebilled  from  Kansas  City  to  Chicago  at  the 
balance  of  the  established  through  rate  from  the  original  point 
of  shipment  to  Chicago.  There  was  no  agreement  for  the  through 
carriage  between  the  shipper  and  the  carrier  at  the  original 
point  of  shipment,  but  the  practice  was  to  allow  the  consignee  or 
other  owner  of  grain  at  Kansas  City  to  ship  from  Kansas  City 
to  Chicago  and  other  points  at  the  balance  of  the  through  rate 


30-i  THE    INTERSTATE    COMMERCE    ACT.        '     [SECTION    2 

upon  presentation  of  the  paid  expense  bill  to  Kansas  City.  The 
commission  ruled  that  such  shipment  and  re-shipment  did  not 
constitute  a  through  shipment  from  the  point  of  origin  to  the 
final  point  of  destination,  and  that  the  grain  so  shipped  and  re- 
shipped  was  not  entitled  to  the  benefit  of  the  through  rate  in 
force  and  that  the  shipment  from  the  point  of  origin  to  Kansas 
City  was  local,  resulting  in  the  grain  becoming  Kansas  City 
grain,  and  the  fact  that  it  had  come  from  a  point  further  west 
was  no  reason  for  applying  on  shipments  of  such  grain  from 
Kansas  City  any  less  or  different  rate  than  was  in  force  from 
Kansas  City.  The  commission  ruled  that  an  indispensable  ele- 
ment in  every  through  shipment  was  the  same — a  contract  for 
such  through  service,  and  an  agreement  between  the  parties  at 
the  inception  of  the  carriage  from  the  point  of  shipment  to  the 
destination  at  the  through  rate.  7  I.  C.  C.  R.  240.  The  same 
was  made  in  the  case  of  a  cattle  shipment.  3  I.  C.  C.  R.  450,  and 
2  Int.  Com.  Rep.  721. 

Any  devices  therefore  for  securing  a  through  rate,  where  the 
shipment  is  not  in  fact  a  through  shipment,  and  is  sper-ifically 
allowed  the  milling  in  transit  privilege  on  facts  not  justifying 
the  same,  would  be  an  unlawful  discrimination  and  violative  of 
this  section. 

§  218  (165).  Unjust  discrimination  in  passenger  service. — 

Unjust  discrimination  is  prohibited  in  the  transportation  of 
passengers,  as  well  as  property.  This  section  however  does  not 
prohibit  separate  cars  for  the  white  and  colored  races,  provided 
cars  and  accommodations  equal  in  all  respects  are  furnished  to 
both  and  the  same  care  and  protection  of  passengers  observed. 
1  I.  C.  C.  R.  428,  1  Int.  Com.  Rep.  719.  See  also  1  I.  C.  C.  R. 
208,  1  Int.  Com.  Rep.  611. 

TVhen  a  railroad  company  makes  a  reduction  from  regular 
passenger  fares  which  are  not  found  unreasonable,  it  may  law- 
fully require  that  a  person  desiring  to  avail  himself  of  such  re- 
duction shall  purchase  a  ticket  and  that  all  persons  not  holding 
such  reduced  rate  ticket  shall  pay  the  reasonable  ordinary  fare. 
10  I.  C.  C.  R.  217.  For  alleged  discrimination  in  parlor  car 
rates  as  between  through  and  local  passengers  not  sustained,  see 
10  I.  C.  C.  R.  221. 

The  regulation  published  on  regular  tariff  sheets  that  the 


5$    219]  TIIE   INTERSTATE    COMMERCE   ACT.  305 

conductoi-s  sliall  collect  twenty-five  cents  additional  fare  on  trains 
I'rom  passengers  without  tickets  was  not  an  unjust  discrimination. 
3  L  C.  C.  R.  5.12,  2  Int.  Com.  Rep.  7G6. 

It  has  been  ruled  by  the  commission  tliat  commutation  rates 
for  school  children  must  be  open  to  all  children  within  the  age 
limit.  See  17  I.  C.  C.  R.  144;  12  I.  C.  C.  R.  95.  Such  rates  are 
not  in  the  nature  of  charitj'  and,  therefore,  did  not  come  within 
the  exceptions  of  the  rule  in  sec.  22. 

While  a  carrier  has  a  wide  field  of  reasonable  discretion  in 
passenger  service  it  cannot  justify  an  unreasonable  discrimina- 
tion between  localities  in  refusing  to  stop  its  train  at  a  particu- 
lar place  on  certain  days  by  a  contract  not  to  do  so.  In  17  I.  C. 
C.  R.  396,  the  stoppage  of  trains  on  Sunday  at  a  mountain  resort 
was  brought  about  by  the  influence  of  the  patrons  of  the  place, 
and  it  was  ruled,  under  the  circumstances,  not  unreasonable. 

The  discrimination  involved  in  the  carrying  of  personal  bag- 
gage of  a  passenger  without  extra  charge,  is  not  undue  as  against 
a  passenger  without  baggage.  The  commission  said,  17  I.  C.  C. 
R.  p,  88,  that  a  railroad  could  properly  carry  for  one  charge  a 
passenger  and  his  personal  baggage,  and  could  provide  a  separ- 
ate car  for  transportation  of  baggage,  could  limit  the  amount  of 
baggage  to  be  carried  free,  and  make  a  charge  for  the  excess. 
The  commission  did  not  decide  whether  150  pounds  was  a  rea- 
sonable limitation  of  the  amount  of  baggage,  or  whether  the 
samples  of  a  drummer  ought  properly  to  be  carried  as  baggage 
at  all,  or  whether  the  excess  rates  charged  were  reasonable,  as 
these  questions  were  not  presented  by  the  record. 

§  219  (166),  Giving'  passes  to  shippers  prohibited. — A  rail- 
road official  who  gives  a  pass  for  interstate  transportation  as  a 
matter  of  personal  favor,  not  within  any  of  the  exceptions 
contained  in  section  22,  violates  sections  2  and  3  of  the  act. 
Charge  to  Grand  Jury  (N.  Dist.  of  Cal.),  66  Fed.  Eep.  146. 
One  riding  on  a  x^«iss  and  assuming  all  risks  of  accident  is 
bound  thereby  and  cannot  recover,  and  it  is  immaterial  that 
the  pass  was  issued  in  violation  of  the  act.  Duncan  v.  Maine 
Central  R.  R.  Co.,  113  Fed.  508. 

It  has  been  ruled  by  the  commission  that  the  giving  of  free 
transportation  to  shippers.  7  I.  C.  C.  R.  92,  or  any  free  trans- 
portation other  tlian  that  allowed  by  section  22  of  the  act  is 
illegal.    2  I.  C.  C.  R.  359  and  2  Int.  Com.  Rep.  243. 
20 


806  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    2 

The  supreme  court  has  in  recent  cases  sustained  the  validity 
of  stipulations  in  railway  passes  against  liability  for  injuries, 
where  parties  accept  the  passes  with  knowledge  of  such  con- 
ditions. See  Northern  Pacific  R.  Co.  v.  Adams,  192  U.  S.  440, 
48  L.  Ed.  513  (1904),  and  Boering  v.  Chesapeake  Beach  U.  Co.. 
193  U.  S.  442,  48  L.  Ed.  742  (1904). 

Since  the  above  rulings  were  made,  the  giving  of  passes  other 
than  to  certain  excepted  classes  is  prohibited  and  made  penal 
both  on  the  part  of  the  railroad  and  the  recipient,  see  §  156, 
supra. 

§  220.  Unjust  discrimination  in  telephone  service. — In  the 

first  telephone  case  that  was  before  the  commission,  20  I.  C.  C. 
R.  614  (1911),  it  was  ruled  that  contacts  between  old  sub- 
scribers and  the  company,  even  though  valid  when  made,  could 
not,  after  congress  had  undertaken  to  regulate  the  rates  and 
practices  of  telephone  companies,  be  accepted  as  justifying  its 
charges  as  between  its  subscribers  similarly  situated,  such  undue 
discrimination  being  forbidden  by  the  act.  It  seems  in  this  case 
that  a  few  subscribers  connected  with  the  new  exchange  were 
previously  connected  with  another  exchange,  which  had  been 
abandoned  by  the  defendant  company  from  motives  of  economy 
of  management  and  efficiency  in  service.  But  the  commission 
ruled  that  this  did  not  warrant  the  exaction  of  the  current  charges 
from  the  new  subscribers,  while  for  the  same  service  and  facili- 
ties the  old  subscribers  continued  to  pay  the  lower  charges 
formerly  exacted  at  the  old  excliange.  It  seems  that  there  was 
no  difference  either  in  the  physical  service  or  in  the  efficiency  of 
the  service,  which  was  rendered  by  the  defendant  to  the  old  sub- 
scribers at  the  old  exchange  and  to  its  new  subscribers  resident 
in  the  same  locality  who  paid  the  current  rates, 

§  221  (167).  Application  of  the  section. — This  section  only 
deals  with  the  discrimination,  which  consists  of  the  charging  one 
person  with  a  different  compensation,  than  is  charged  another 
for  a  like  and  contemporaneous  service  for  the  transportation  of 
a  like  kind  of  traffic  under  substantially  similar  circumstances 
and  conditions.  Forms  of  discrimination  which  relate  to  the 
furnishing  of  facilities,  such  as  car  service  and  the  like,  are 


§    221]  THE   INTERSTATE   COMMEKCE   ACT.  ;{U( 

prohibited  by  the  more  conii)reliei]sIvc  language  of  ser^tion  3, 
infra. 

The  mere  fact  of  the  payment  of  a  rebate  may  not  constitute 
''an  unjust  discrimination"  at  common  law,  or  under  the 
statutes,  at  least  prior  to  the  amendment  of  1903.  Thus  it  was 
held  in  a  state  case,  Laurel  Cotton  I\Iills  v.  Gulf,  etc., 
Railway  Co.,  supra,  by  tlie  supreme  court  of  IMissisisippi, 
that  if  there  is  no  unjust  discrimination,  an  agreement  ])y  a 
carrier  that  tliey  will  carrj-  goods  at  a  certain  rate  and  i-epay 
the  sliipper  a  part  thereof  as  a  rebate  after  the  shipment,  is 
not  illegal,  and  the  rebate  may  be  recovered  by  the  shipper  in 
a  proper  case.  But  under  the  publication  of  rates  required 
under  section  6  of  the  Interstate  Commerce  Act  and  especially 
in  view  of  the  provisions  of  the  Elkins  Act  of  February-  10, 
1903,  infra,  any  deviation  from  the  published  rate  constitutes 
an  offense.  If  a  rebate  therefore  is  paid  to  one,  it  must  be 
paid  to  all  vrnder  similar  circumstances,  and  the  rebate  must 
be  a  part  of  the  publislied  tariff. 

In  the  Beef  Trust  case,  Swift  v.  United  States,  supra,  the 
bill  alleged  that  the  defendants  as  a  part  of  their  unlawful 
combination  for  monopolizing  the  market,  were  obtaining  ar- 
rangements Avitli  the  railroads  whereby  by  means  of  rebates 
and  other  devices  they  paid  less  than  the  lawful  rates  for 
transportation.  The  supreme  court  said  that  this  did  not  neces- 
sarily charge  unlawful  acts,  as  the  defendants  might  severally 
lawfully  obtains  less  than  the  lawful  rates  for  transportation,  if 
the  circumstances  were  not  substantially  dissimilar  for  which 
the  regular  rates  were  charged,  as  if  they  furnished  their  own 
cars,  for  instance,  and  there  were  other  differences  in  the  service. 
But  as  the  charge  was  made  in  connection  with  the  alleged  at- 
tempt to  monopolize  the  market  in  violation  of  the  Anti-Tri>st 
Act,  the  court  said  that  no  more  powerful  instriunent  of  a  mo- 
noply  could  be  used  than  an  advantage  in  the  cost  of  transporta- 
tion, and  that  every  act  done  with  the  intent  to  produce  an  un- 
lawful result  is  unlawful.  The  charge  was  therefore  held  ma- 
terial in  connection  with  the  other  charges  in  the  bill.  See  supra, 
§  81. 

This  section  of  the  statute  has  no  application  where  the 
traffic  is  of  different  kinds  and  classes  not  competitive  with 


308  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    2 

each  other.  8  I.  C.  C.  R.  531  and  5  I.  C.  C.  R.  193,  3  Int.  Com. 
Rep.  841.  There  is  no  discrimination  under  this  section  in  the 
case  of  impartial  action.  It  must  consist  in  doing  for  or  allowing 
to  one  party  or  place  what  is  denied  to  the  other.  1  I.  C.  C.  R. 
401,  1  Int.  Com.  Rep.  703.  A  like  Idnd  of  traffic  within  the 
meaning  of  this  section  does  not  mean  taffic  that  is  identical,  but 
a  kind  that  is  capable  of  a  fair  and  just  classification.  4  I.  C.  C. 
R.  447,  3  Int.  Com.  Rep.  417.  The  section  has  no  application  to 
terminal  charges  in  different  cities,  7  I.  C.  C.  R.  513,  nor  is  there 
any  unjust  discrimination  involved  in  the  refusal  to  pay  mileage 
to  a  private  car  company.  1  I.  C.  C.  R.  132,  1  Int.  Com.  Rep. 
329. 

Discriminations  based  solely  upon  the  business  motives  of 
the  shipper  are  illegal.    6  I.  C.  C.  R.  85. 

§  222  (168).  Retention  of  overcharge. — The  Interstate  Com- 
merce Act  does  not  recognize  indeiinite  or  uncertain  transporta- 
tion charges.  The  idea  of  unequal  compensation  for  like  service, 
or  discrimination  in  the  treatment  of  persons  similarly  situated, 
is  repugnant  to  every  requirement  of  the  law,  and  a  party  to  an 
interstate  shipment  cannot  be  excluded  by  the  carrier  from  the 
privileges  afforded  to  other  patrons  in  the  same  locality  because 
of  his  refusal  to  pay  excessive  freight  charges,  even  though  an 
agreement  to  subsequently  refund  the  excess  should  accompany 
the  demand.  6  I.  C.  C.  R.  36.  The  retention  of  an  overcharge 
has  all  the  effect  of  extortion  and  unjust  discrimination,  and 
when  the  refund  of  an  excessive  charge  has  been  unnecessarily 
delayed  for  a  considerable  period,  the  officials  responsible  there- 
for become  fairly  chargable  with  wailful  intention  to  violate  the 
law. 

In  Ohio  Coal  Co.  v.  "Whitcomb,  123  Fed.  359,  circuit 
court  of  appeals,  7th  circuit,  an  extra  charge  of  two  dollars  per 
car  made  to  one  shipper  for  access  to  the  docks  was  held  under 
tlie  facts  to  be  discriminative  under  the  "Wisconsin  statute,  and 
an  agreement  by  the  shipper  to  pay  the  discriminating  charge 
in  order  to  obtain  the  service,  to  which  it  w^as  legally  entitled 
without  such  charge,  did  not  estop  him  from  maintaining  a  suit 
to  recover  back  the  sum  so  paid. 

§  223  (169).  Enforcement  of  the  section. — The  section  has 
no  application  to  cases  occurring  before  the  act  was  passed,  1  I. 


§    223]  THE   INTERSTATE   COMMERCE   ACT.  309 

C.  C.  R.  144,  1  l2it.  Coin.  Rep.  607,  that  is,  so  far  as  the  penalties 
imposed  by  the  other  sections  of  the  act  for  violation  of  its 
provisions  are  concerned.  It  has  l)cen  held  however  tliat  con- 
ti-acts  for  rebates  made  before  the  act  went  into  efl'ect  were 
thereafter  incapable  of  enforcement.  Southern  Wire  Co.  v.  St. 
etc.,  R.  Co.,  38:\Io.  .\pp.  191. 

It  is  no  defense  to  an  action  for  damages  for  discrimination 
in  rates  that  the  lower  rate  is  charged  between  the  same  termi- 
nals, because  certain  shippers  had  a  contract  extending  over  a 
term  of  years  based  on  lower  rates  which  were  then  in  force 
when  the  contracts  were  made,  while  other  shippers  had  no  such 
contacts.  See  Pa.  R.  R.  Co.  v.  International  Coal  ^Mining  Com- 
pany, C.  C.  A.  3rd  Circuit,  173  Fed.  p.  1.  The  court  said  that 
it  was  not  necessary  for  the  plaintiff  to  show  that  he  had  paid 
the  freight  rate  charge  under  protest.  The  court  said  that  the 
measure  of  damages  recoverable  in  such  a  case  is  the  difference 
between  the  amount  paid  by  plaintiff  and  the  amount  it  would 
have  paid  at  tlie  lowest  rate  charged  on  any  other  shipments 
carried  under  substaiitially  the  same  circumstances  and  condi- 
tions during  the  same  time ;  but  the  shipper,  who  has  been  given 
rebates,  could  not  maintain  an  action  to  recover  damages  for  dis- 
crimination because  he  was  not  granted  larger  rebates. 

In  a  suit  to  recover  damages  for  alleged  discrimination,  it  is 
sufficient  to  allege  that  the  defendant  had  charged  plaintiff  a 
given  rate  for  transportation,  and  for  like  services  under  sub- 
stantially the  same  circumstances  and  conditions  the  defendant 
had  charged  another  a  less  given  rate,  or  that  plaintiff  was 
charged  more  than  the  schedule  rate.  Kinnavey  v.  Terminal 
Railroad  Association.  81  Fed.  802.  In  this  case  it  was  held 
by  Adams,  J.,  of  the  eastern  district  of  Missouri,  that  it  was  not 
necessary  for  the  complainant  to  set  out  the  facts  showing  that 
the  conditions  were  similar,  but  that  it  was  sufficient  to  allege 
the  ultimate  fact  in  the  language  of  the  statute.  The  payment 
of  an  overcharge  in  such  case  is  not  a  voluntary  payment  pre- 
cluding recovery.  L.  &  N.  Consolidated  R.  Co.  v.  Wilson,  132 
Ind.  517  and  18  L.  R.  A.  105.  See  also  Murray  v.  Chicago  & 
Northwestern  R.  Co.,  35  C.  C.  A.  G2.  24.  92  Fed.  S6S,  affirming  62 
Fed.  24.  It  was  held  that  an  action  by  a  shipper  against  a 
carrier  for  unjust  discrimination  in  the  imposition  of  freight 
charges  paid  by  plaintiff,   lay  at   common  law,   regardless  of 


310  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    2 

fraud.  In  Wight  v.  United  States,  167  U.  S.  512.  42  L.  Ed.  258. 
the  con-v^ction  of  a  railroad  agent  for  \dohTtion  of  this  section 
in  granting  a  rebate,  was  affirmed. 

In  Union  Pacific  Railway  Company  v.  Goodrich,  149  U.  S.  680, 
37  L.  Ed.  896  (1893),  the  supreme  court  affirmed  the  judgment 
rendered  in  the  circuit  court  under  a  Colorado  statute  for  an  un- 
just discrimination  in  intrastate  traffic,  wherein  the  damages 
were  measured  by  the  amount  of  the  rebate  allowed  a  com- 
petitor. The  court  said  that  the  plaintiff  was  entitled  to  the 
same  terms  which  the  favored  company  received,  and  damages 
to  the  exact  extent  to  which  that  company  was  given  the 
preference. 

It  constitutes  no  defense  in  discrimination  between  persons 
that  the  pri^dlege  may  be  withdrawn  at  mil.  Butchers  & 
Drovers  Stockyards  Co.  v.  Railroad  Co.,  14  C.  C.  A.  290,  1.  c. 
297,  67  Fed.  35. 

As  to  right  to  enforce  rights  of  action  for  violation  of  this  sec- 
tion in  courts  of  law,  in  view  of  decisions  of  the  supreme  court 
requiring  resort  to  Interstate  Commerce  Commission  in  cases  cog- 
nizable by  the  commission,  see  infra  sections  8  and  9  of  the  Act. 

As  to  jurisdiction  of  equity  see  opinion  of  Grosscup,  J.,  in  U.  S. 
V.  M.  C.  R.  R.,  122  Fed.  544  (1903).  See  also  Elkins  Act  of  1903, 
infra,  §  422,  as  to  suits  in  equity  at  instance  of  the  government 
to  restrain  railroads  from  discriminations  in  rates. 

§  224.  Connecting  carrier  not  responsible  for  discrimination 
by  initial  carrier. — While  a  railroad  is  responsible  for  the 
rates  on  a  connecting  road,  which  it  operates  as  part  of  its  own 
line  (Penn.  R.  R.  Co.  v.  Interstate  Coal  Mining  Co.,  supra) ,  it  was 
held  by  the  supreme  court  in  Penn.  Refining  Co.  v.  Western  New 
York  &  Penn.  R.  R.,  supra,  that  a  connecting  carrier  which  re- 
ceives cars  from  an  initial  carrier  and  participates  in  the  through 
rate  which  is  reasonable  in  itself,  is  not  liable  for  a  discrimina- 
tion, alleged  to  have  been  made  by  the  initial  carrier  in  favor  of 
shippers  by  tanks  as  against  shippers  by  barrels,  as  the  wrong,  if 
any,  was  chargeable  to  the  initial  carrier  only. 

§  225  (171).  Effect  of  rebates  upon  contracts  of  affreight- 
ment.— In  Merchants  Cotton  Compress  Co.  v.  Insurance  Co., 
151  U.  S.  368,  38  L.  Ed.  195  (1894),  it  was  held,  that  there  was 


§    22G]  TIIK    INTERSTATE    COMMERCE    ACT.  311 

no1Iiiii<,'  in  tlie  Interstate  Commerce  Act  wlilch  vitiated  bills  of 
lading  or  which  by  reason  of  the  allowance,'  of  rebates  actually 
made  would  invalidate  a  contract  of  afTrcighlnicnt,  or  exempt  the 
railroad  company  from  liability  on  its  bills  of  lading.  This  was  a 
suit  of  an  insurance  company  which  had  paid  losses  claiming  to 
be  subrogated  against  the  railroad  company  on  bills  of  lading 
issued  to  the  owners  and  consignees  of  cotton.  It  was  not  shown 
that  the  owner  or  consignee  of  the  cotton  had  knowledge  of  the 
rebate. 

§  226  (171a).  Discrimination  in  allowance  to  private  trans- 
fer companies. — The  railroads  operating  west  from  St.  Louis 
made  the  rate  on  west  bound  traffic  from  East  St.  Louis  the 
same  as  from  St.  Louis,  and  out  of  this  rate  allowed  five  cents 
per  hundred  pounds  to  transfer  companies  hauling  less  than 
carload  lots  from  East  St.  Louis  to  St.  Louis.  The  commission 
(10  I.  C.  C.  R.  661),  without  deciding  whether  the  railroads 
could  properly  apply  the  St.  Louis  rate  to  the  station  of  a  bona 
fide  transfer  company  in  East  St.  Louis  and  absorb  the  cost  of 
transfer  to  St.  Louis,  nor  whether  by  proper  schedule  they 
could  allow  all  shippers  from  East  St.  Louis  a  fixed  sum  per 
hundred  pounds  for  transporting  their  merchandise  to  the  sta- 
tions in  St.  Louis,  ruled  that  an  allowance  from  the  rate  could 
not  be  made  to  a  carrier  company,  which  was  in  effect  only  a 
private  carrier  organized  and  doing  the  business  of  one  shipper, 
as  such  pajrment  would  be  in  effect  a  rebate  to  such  shipper. 


312  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    3 


Section  3. 

227.  Section  3.     Undue  or  unreasonable  preference  or  advantage  for- 

bidden. 

228.  Origin  of  the  section. 

229.  Relation  to  sections  1  and  2. 

230.  Preferences  of  localities  enforced  by  competition  are  not  unjust. 

231.  Application  of  the  competition  rule. 

232.  Whether  competition  is  controlling  is  a  question  of  fact. 

233.  Discrimination  between  domestic  and  foreign  traffic  in  import 

and  export  rates  not  unjust  preference. 

234.  Milling  in  transit  and  export  trade. 

235.  Application  of  the  import  rule  to  intermediate  points  on  the  line. 

236.  Competition   created  by  carriers. 

237.  The  "basing  point  system"  not  illegal. 

238.  Basing  points  not  exempt  from  regulating  power  of  commission. 

239.  Grouping  of  rates. 

240.  Qualifications  in  the  application  of  the  competition  rule. 

241.  Recognition  of  natural  advantages  of  localities  not  an   unjust 

preference. 

242.  Competing  cities  on  opposite  banks  of  rivers. 

243.  Differentials  between  competitive  cities. 

244.  Preference  in  demurrage  charges. 

245.  Uniform  demurrage  rules  recommended. 

246.  Different  forms  of  undue  preference. 

247.  Undue  preference  in  allowance  for  grain  elevator  service. 

248.  Undue  preference  in  wharfage  rights. 

249.  Undue  preference  in  management  of  freight  stations  and  ware- 

houses. 

250.  Undue  preference  in  car  service. 

251.  The  commission's  regulations  of  coal  car  service  sustained. 

252.  Discrimination  by  carrier  in  its  own  favor. 

253.  Undue  preference  in  private  cars. 

254.  Demurrage  and  other  charges  on  privately  owned  cars. 

255.  The  commerce  court  on  demurrage  charges  upon  private  cars. 

256.  Exclusive  use  of  excursion  or  sleeping  cars  of  one  owner. 

257.  Leasing  of  cars  does  not  carry  right  of  exclusive  use  by  owner. 

258.  Stoppage  in  transit  privileges. 

259.  Reconsignment  charges. 

260.  Transit  privileges. 

261.  Interference    by    state    railroad    commission    with    proportional 

tariff  rates. 

262.  Sidetracks  and  connections. 

263.  Undue  preference  in  denying  shippers  the  choice  of  route. 

264.  Undue  preference  in  aribitrary  division  of  territory. 


^    227]  THE  INTERSTATE   COMMERCE   ACT.  313 

265.  Rate  wars  and  undue  preferences. 

266.  Discrimination  in  kinds  of  traffic. 

267.  Preferences  against  traffic — must  involve  injury. 

268.  A  reasonable  regulation  of  carload  weights  not  preferential. 

269.  Differentials  between  grain  and  grain  products. 

270.  The  commission  not  concluded  by  ruling  of  state  commission. 

271.  Discrimination  in  mode  of  shipment. 

272.  Classification. 

273.  Uniform  classification  recommended. 

274.  Consultation  of  carriers  in  classification  not  illegal  combination. 

275.  Undue   preference   in   classification. 

276.  Power  of  commission  in  correcting  classification. 

277.  Reasonable  regulations  in  classifications. 

278.  Facilities  for  interchange  of  traffic. 

279.  Discrimination    in    exacting    prepayment    from    connecting    car- 

riers not  unjust  discrimination. 

280.  Discrimination  in  exacting  prepayment  from  shippers. 

281.  State  control  of  interchange  of  interstate  traffic. 

282.  State  and  municipal  control  of  terminals. 

283.  The  charging  of  local  rates  not  an  unjust  discrimination. 

284.  The  right  of  exclusive  through  routing. 

285.  Contract  rights  of  trackage. 

286.  Rights  of  connecting  carriers  as  to  milling  in  transit  privileges. 

287.  Exclusive  contracts  for  station  facilities  not  unlawful. 

§  227  (172).  Section  3.  Undue  or  unreasonable  preference 
or  advantage  forbidden.— Sec.  3.  That  it  shall  be  unlawful  for 
any  eoinmoii  c;iJTier  .subject  to  the  provisions  of  this  act  to  make 
or  give  any  undue  or  unreasonable  preference  or  advantage  to 
any  particular  person,  company,  firm,  corporation,  or  locality. 
or  any  particular  description  of  traffic  in  any  respect,  what- 
soever, or  to  subject  any  particular  person,  company,  firm,  cor- 
poration, or  localit3%  or  any  particular  description  of  traffic,  to 
any  undue  or  unreasonable  prejudice  or  disadvantage  in  any 
respect  whatsoever. 

[Fnolllties  for  Interelinnge  of  traffic. 1 

Every  common  carrier  subject  to  the  provisions  of  this  act, 
shall,  according  to  their  respective  powers,  afford  all  reasonable, 
proper,  and  ecptal  facilities  for  the  interchange  of  traffic  be- 
tween their  respective  lines,  and  for  the  receiving,  forwarding, 
and  delivering  of  pass(>ngers  and  propei'ty  to  and  from  tlieir 

[DiNcriniinntion  betT\'een  roniieetinp:  linen  forbiililenj] 

several  lines  and  those  connecting  therewith,  and  shall  not  dis- 
criminate in  their  rates  and  charges  between  such  connecting 
lines;  but  this  shall  not  be  construed  as  requiring  any  such 
common  cairier  to  give  the  use  of  its  tracks  or  terminal  facilities 
to  another  carrier  engaged  in  like  business. 


314  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    3 

§  228  (173).  Origin  of  the  section.— This  section  has  not 
been  amended.  It  was  said  by  the  supreme  court  in  tbe  Import 
Rate  Case,  162  U.  S.  197,  1.  c.  222,  40  L.  Ed.  940  (1896),  that  it 
was  modeled  upon  the  second  section  of  the  English  act,  for  the 
better  regulation  of  traffic  on  railways  and  canals,  of  July  10, 
1854,  and  the  eleventh  section  of  the  act  of  July  21,  1873,  en- 
titled ''An  Act  to  Make  Better  Provision  for  Carrying  into 
Effect  the  Railway  and  Canal  Act  of  1854,  and  for  other  pur- 
poses connected  therewith."  Section  2  of  this  English  act  of 
1854  is  as  follows,  17  and  18  Vic.  c.  31. 

"2.  Every  railway  company,  canal  company,  and  railway 
and  canal  company,  shall,  according  to  their  respective  powers, 
afford  all  reasonable  facilities  for  the  receiving,  and  forward- 
ing and  delivering  of  traffic  upon  and  from  the  several  rail- 
ways and  canals  belonging  to  or  worked  by  such  companies 
respectively,  and  for  the  return  of  carriages,  trucks,  boats,  and 
other  vehicles,  and  no  such  company  shall  make  or  give  any 
undue  or  unreasonable  preference  or  advantage  to  or  in  favor 
of  any  particular  person  or  company,  or  any  particular  descrip- 
tion of  traffic,  in  any  respect  whatsoever,  nor  shall  any  such 
company  subject  any  particular  person  or  company,  or  any 
particular  description  of  traffic,  to  any  undue  or  unreasonable 
prejudice  or  disadvantage  in  any  respect  whatsoever;  and 
every  railway  company  and  canal  company,  and  railway  and 
canal  company  having  or  working  railways  or  canals  which 
form  part  of  a  continuous  line  of  railway  or  canal,  or  railway 
and  canal  communication,  or  which  have  the  terminus,  station. 
or  wharf  of  the  one  near  the  terminus,  station,  or  wharf  of  the 
other,  shall  afford  all  due  and  reasonable  facilities  for  receiv- 
ing and  forwarding  all  the  traffic  arriving  by  one  of  such  rail- 
ways or  canals  by  the  other,  without  any  unreasonable  delay, 
and  without  any  such  preference  or  advantage,  or  prejudice  or 
disadvantage,  as  aforesaid,  and  so  that  no  obstruction  may  be 
afforded  to  the  public  desirous  of  using  such  railways  or  canals, 
or  railways  and  canals  as  a  continuous  line  of  communication, 
and  so  that  all  reasonable  accommodations  may,  by  means  of 
the  railways  and  canals  of  tlie  several  companies,  be  at  all  times 
afforded  to  the  public  in  that  behalf. ' ' 

Section  11  of  the  English  act  of  1873,  36  and  37  Vic.  c.  48, 
re-enacts  section  2  of  the  English  act  of  1854,  and  provides 
specifically  for  the  enforcement  of  the  duty  of  receiving,  for- 
warding and  delivering  from  and  to  other  companies.  For  his- 
tory of  this  second  section  of  the  English  act  of  1854,  see  opin- 
ion in  the  ease  of  L.  &  Y.  Railroad  Co.  v.  Greenwood,  Law  Reps. 


§    229]  THE  INTERSTATE   COMMERCE   ACT.  3li 


21  Q.  B.  D.  215.  The  equality  clause  of  the  Railway  Clauses  Con- 
soliclation  Act  of  1845  had  been  coii.strued  by  the  courts  to  mean 
equal  rates  for  the  carriage  of  goods  over  the  same  portions  of 
the  line,  and  did  not  apply  where  the  places  over  which  the 
goods  were  carried  were  not  the  same;  and  this  restricted  ap- 
plication led  to  the  more  comprehensive  provisions  or  the  act 
of  1854. 

It  will  be  seen  that  section  3  of  the  act  of  congress  to  regu- 
late commerce  inserts  the  word  "locality,"  which  does  not  ap- 
pear in  the  English  act,  so  that  any  undue  or  unreasonable 
preference  or  advantage  is  prohibited  to  any  particular  person, 
firm,  company  or  corporation  or  any  locality,  or  any  particulai' 
description  of  traffic. 

The  effect  of  the  English  cases  construing  the  preference 
branch  of  the  English  act  were  thus  summarized  by  Judge  Jack- 
son in  his  opinion  in  the  Party  Rate  case  in  the  circuit  court, 
43  Fed.  37  (1890),  (affirmed  by  the  supreme  court  in  145  U.  S. 
263,  supra) ,  quoting  from  a  report  of  the  English  Amalgamation 
Committee  of  1872,  page  130,  as  follows: 

"The  effect  of  the  decisions  seems  to  be  that  a  company  is 
bound  to  give  the  same  treatment  to  all  persons  equally  under 
the  same  circumstances,  but  there  is  nothing  to  prevent  a  com- 
pany, if  acting  with  a  view  of  its  own  profit,  from  imposing 
such  conditions  as  may  incidentally  have  the  effect  of  favoring 
one  class  of  trade  or  one  town,  or  one  portion  of  that  traffic, 
providing  the  conditions  are  the  same  to  all  persons,  and  are 
such  as  lead  to  the  conclusion  that  they  are  really  imposed  for 
the  benefit  of  the  railway  company." 

It  was  said  by  the  supreme  court  in  this  case,  145  U.  S.  263, 
as  to  both  sections  2  and  3,  p.  276:  "It  is  not  all  discriminations 
or  preferences  that  fall  wdthin  the  inhibition  of  the  statutes; 
only  such  as  are  unjust  and  unreasonable.  *  *  *  Indeed  the 
possibility  of  just  discrimination  and  reasonable  preferences  is 
recognized  by  those  sections  in  declaring  what  shall  be  deemed 
unjust. ' ' 

§  229  (174).  Relation  to  sections  1  and  2.— The  first  para- 
graph of  the  section  in  its  prohibition  of  any  undue  or  unrea- 
sonable preference  or  advantage  to  any  particular  person,  com- 
pany, firm  or  corporation,  or  the  subjection  of  any  particular 
person,  company,  firm  or  corporation  to  any  undue  or  imrea- 


316  THE    INTERSTATE    COMMERCE    ACT.  [oECTION    3 

sonable  prejudice  or  disadvantage  in  any  respect  whrtever,  is 
comprehensive  enough,  standing  alone,  to  include  the  prohibi- 
tion of  discrimination  contained  in  section  2,  and  such  is  the 
judicial  construction  in  England  of  the  term  "undue  or  unrea- 
sonable preference  or  advantage"  as  used  in  the  English  Rail- 
way and  Canal  Traffic  Act,  from  which  the  terms  of  this  sec- 
tion are  taken.  United  States  v.  D.  L.  &  W.  R.  Co.,  iO  Fed. 
101  (1889). 

Section  3  is  broader  than  section  2  in  that  it  is  not  limited  to 
discrimination  in  rates,  but  includes  any  form  of  unjust  dis- 
crimination or  preference  whereby  a  person,  a  class  of  business, 
a  locality,  or  a  kind  of  traffic  is  unjustly  prejudiced. 

That  part  of  the  section  which  forbids  a  carrier  from  making 
or  giving  any  undue  or  unreasonable  preference  or  advantage 
to  any  particular  description  of  traffic,  it  was  said  in  U.  S.  v. 
B.  &  0.  R.  Co.,  153  Fed.  997  (1907),  relates  to  the  property 
transported,  and  does  not  apply  to  either  the  method  of  trans- 
portation or  the  rate  charged  therefor. 

Section  1  prohibits  unreasonable  rates  and  the  reasonableness 
of  rates  can  only  be  determined  by  the  consideration  of  whether 
rates  are  relatively  reasonable.  A  rate  which  subjects  a  per- 
son or  community  or  any  kind  of  traffic  to  any  undue  or  un- 
reasonable prejudice  or  disadvantage  is  in  that  sense  an  unrea- 
sonable rate.  Proceedings  before  the  commission  and  the  courts 
contesting  the  rates  established  by  the  carriers  have  usually 
included  sections  1  and  3  and  not  infrequently  sections  1,  2,  3. 
and  4,  the  latter  when  the  long  and  short  haul  on  the  same  line 
are  involved.  Under  section  3  however,  it  is  only  the  relative 
reasonableness  of  a  rate  which  is  considered,  and  as  cases  of 
individual  discriminations  in  rates  have  been  considered  in 
connection  with  section  2,  the  cases  grouped  under  this  section 
will  be  those  relating  to  discriminations  "'between  shippers  other 
than  in  rates  and  to  alleged  preferences  to  localities  and  kinds 
of  traffic. 

§  230  (175).  Preferences  of  localities  enforced  by  competi- 
tion are  not  unjust. — Section  3  has  been  closely  related  to  sec- 
tion 4  in  the  judicial  discussion  of  the  relation  of  competition 
to  preferential  rates.  Section  3  contains  the  general  prohibi- 
tion of  undue  or  unreasonable  preference  or  advantage  to  any 


§    230]  THE    IXTERSTATK    (u.M.MI.l«  K    A(.i.  317 

locality,  while  section  4  contains  the  specific  prohibition  of  any 
greater  rate  for  a  shorter  than  for  a  longer  distance  over  the 
same  line.  After  the  decision  of  the  supreme  court  in  the  So- 
cial Circle  case  in  1897  (162  U.  S.  184),  infra,  section  4,  it  was 
ruled  by  the  commission  in  a  proceeding  involving  the  rehitive 
rates  to  Chattanooga  and  Nasliville  from  the  eastern  seaboard. 
5  I.  C.  C.  R.  546,  and  4  Int.  Com.  Rep.  213,  that  while  the  car- 
rier had  the  right  under  the  law  then  existing  to  judge  in  the 
first  instance,  whether  it  was  justified  in  making  the  greater 
charge  for  the  shorter  distance  under  section  4,  nevertheless 
the  third  section  of  the  act  forbiding  the  making  or  giving  of 
undue  or  unreasonable  preference  or  advantage  was  still  ap- 
plicable, and  that  where  such  unjust  preference  was  created, 
even  as  a  result  of  railway  competition,  compelling  a  lower 
charge  for  a  longer  haul,  the  carrier  should  apply  for  exemption 
under  the  proviso  of  the  fourth  section.  This  ruling  was  sus- 
tained in  the  circuit  court  and  circuit  court  of  appeals,  on 
somewhat  different  grounds,  39  C.  C.  A.  413  and  99  Fed. 
52,  but  was  reversed  in  the  supreme  court,  East  Tennessee,  etc., 
R.  Co.  V.  Commission,  181  U.  S.  1,  45  L.  Ed.  719,  729  (1901), 
who  said  that  the  effect  of  this  ruling  of  the  commission 
was  to  blend,  the  third  and  fourth  sections  in  such  a  manner  as 
to  necessarily  destroy  one  by  the  other.  The  prohibition  of  the 
third  section  was  directed  against  unjust  discrimination  or 
undue  preferences  arisiug  from  the  voluntary  or  wrongful  act 
of  the  carriers  complained  of,  and  does  not  relate  to  acts  the 
result  of  conditions  wholly  beyond  the  control  of  such  carriers. 
Where  the  competition  was  controlling,  the  preference  was  not 
undue  or  the  discrimination  unjust.  It  appeared  in  this  case 
that  there  was  a  margin  of  profit  in  the  rates  in  force  to  Nash- 
ville and  Memphis.  The  court  said  there  might  be  a  case  where 
the  carrier  would  not  be  allowed  to  avail  himself  of  the  competi- 
tive condition.  Thus  if  he  could  not  meet  the  competitive  rate 
without  transporting  the  merchandise  at  less  than  the  cost  of 
transportation,  and  therefore  bringing  about  a  deficiency  which 
would  increase  charg(!S  upon  other  business,  the  engaging  in 
such  competitive  traffic  would  both  bring  about  an  unjust  dis- 
crimination and  a  disregard  of  the  public  interest. 

The  court  said  that  the  question  whether  the  charges  were 
reasonable   or   otherwise,   and   whether   the   certain   discrimina- 


318  THE    INTERSTATE    COMMERCE    ACT.  [SECTION   B 

tions  were  due  or  undue  were  questions  of  fact  to  be  passed 
upon  by  tlie  eominission  in  tlie  light  of  all  the  facts,  and  the 
case  was  directed  to  be  remanded  and  the  proceedings  dis- 
missed without  prejudice  to  the  rights  of  the  commission  to 
proceed  with  the  further  investigation  of  the  facts. 

§  231  (176).  Application  of  the  competition  rule. — The  same 
ruling  has  been  made  in  several  cases  in  the  circuit  courts  and 
eircidt  courts  of  appeal.  Thus  in  Commission  v.  Atlantic  Rail- 
way Co.  et  al.,  35  C.  C.  A.  217,  and  93  Fed.  83,  the  court 
said  that  under  the  decisions  of  the  supreme  court  competi- 
tion was  a  factor  to  be  considered,  and  if  the  competition  was 
real  and  controlling,  it  created  substantially  different  circum- 
stances and  conditions,  and  where  such  lower  rate  was  so  in- 
duced, if  not  so  low  as  to  be  unreasonable  and  unremunerative 
to  the  carrier,  it  could  not  afford  a  basis  of  undue  and  unrea-, 
sonable  preferences  and  advantages  in  favor  of  the  competitive 
point  within  the  inhibition  of  the  third  section,  nor  be  unjust 
and  unreasonable  under  the  first  section  of  the  act.  It  would 
seem  however  that  under  the  rulings  of  the  supreme  court  even 
if  the  competition  is  controlling,  and  thus  creates  substantially 
different  circumstances  and  conditions  justifying  the  lower 
rate  for  the  entire  haul,  and  precluding  the  inference  of  an 
unjust  preference  therefrom,  it  would  still  remain  for  the  com- 
mission under  all  the  facts  to  determine  whether  the  established 
rates  were  reasonable  or  not. 

See  also  10  1.  C.  C.  Eep.  Ill,  where  the  commission  applied  the 
ruling  of  the  court  in  this  case  to  the  reasonableness  of  rates  from 
New  York  to  Chattanooga  and  Nashville.  In  12  I.  C.  C.  Rep.  68, 
the  commission  said  that  a  railroad  could  not  arbitrarily  deter- 
mine that  a  particular  mill  shall  compete  in  a  certain  market  with 
other  localities,  and  that  other  mills  on  its  line  shall  not  so 
compete,  particularly  where  the  discrimination  is  not  justified 
by  operating  conditions.  It  was  also  ruled,  13  I.  C.  C.  Rep.  56, 
that  dissimilar  circumstances,  which  justified  under  section  4 
a  greater  charge  for  a  shorter  than  a  longer  haul,  will  also  pre- 
vent such  rate  from  constituting  an  illegal  preference  or  ad- 
vantage under  section  3,  and  in  13  I.  C.  C.  Rep.  342,  that  a  car- 
rier may  in  its  own  interest,  if  it  so  desires,  carry  for  a  longer 
distance  over  its  own  lines  than  would  be  necessary  if  carried 


§    232]  THE   INTERSTATE    CO.MMEKCE    ACT.  ^^IH 

bctwcfn  the  same  points  over  the  line  of  its  competitor,  in  order 
to  obtain  a  portion  of  the  competitive  business,  upon  terms  that 
will  afford  some  profit.  It  did  not  necessarily  follow,  however, 
that  a  carrier  in  competing  for  traffic  in  tliis  way  thereby  sub- 
jects itself  to  an  order  compelling  it  to  do  so.  And  in  15  I.  C. 
C.  Rep.  11,  a  carrier  with  a  longer  route  is  not  obliged  as  a 
matter  of  law  to  meet  the  rate  of  a  short  line  competitor;  and 
neither  is  a  carrier  via  any  route  obliged  as  a  matter  of  law  to 
reduce  its  rates  because  a  short  line  competitor  reduces  its  rate, 
which  has  been  the  same  via  both  routes.  And  also,  15  I.  C.  C. 
Rep.  49,  the  commission  declined  to  lend  sanction  to  the  idea 
that  a  lower  rate  in  effect  via  one  line  than  via  another  line  is 
conclusive  evidence  of  an  unreasonable  rate. 

§  232  (177).  Whether  competition  is  controlling  is  a  ques- 
tion of  fact. — When  competition  enters  into  a  case  as  an  ele- 
ment, whether  or  not  there  is  an  undue  preference  or  advantage, 
that  is  whether  the  competition  is  controlling,  is  a  question  not 
of  law,  but  of  fact.  Commission  v.  L.  &  N.  Railroad  Co.,  73  Fed. 
409.  See  also  Brewer  v.  Central  Railroad  of  Georgia,  84  Fed. 
258;  Commission  v.  Western  A.  R.  Co.,  88  Fed.  186;  Commission 
V.  Cincinnati  &  P.  R.  Co.  et  al.,  124  Fed.  624. 

In  the  latter  case,  the  commission,  9  I.  C.  C.  R.  118,  had  found 
that  the  rates  from  Avestern  cities  to  Wilmington,  N.  C,  were 
prejudicial  and  unduly  preferential  to  Norfolk,  Richmond,  and 
other  Virginia  cities,  and  it  ordered  that  they  should  be  made 
upon  a  basis  of  125  per  cent  of  the  rates  contemporaneoiisly  in 
force  from  East  St.  Louis  to  Norfolk.  The  court  refused  to  en- 
force this  order,  holding  that  the  conditions  at  Norfolk  and 
Richmond,  by  reason  of  the  larger  number  of  carrying  lines,  both 
rail  and  water,  created  a  very  active  competition ;  and  further- 
more, the  fact  that  these  two  cities  were  in  what  was  known  as 
trunk  line  territoiy  and  Wilming-ton  was  in  what  was  known  as 
southern  territory,  where  there  were  fewer  transportation  lines 
and  less  active  competition,  resulting  in  higlier  rates  to  Wilming- 
ton, although  the  length  of  haul  was  about  the  same.  The  com- 
mission had  refused  to  recognize  tlie  higher  preferential  rates 
based  upon  the  location  in  the  soufliern  territory  in  another  case 
from  Wilmington.  See  9  I.  C.  C.  R.  17.  In  the  latter  case  the 
commission  said  it  was  the  first  case  during  their  fourteen  years 


320  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    3- 

experience  wliich  showed  a  through  rate  charge  over  connecting 
roads  in  excess  of  the  combination  charges  applying  to  and  from 
an  intermediate  point  on  the  through  line. 

As  to  the  competition  rule,  see  also  Commission  v.  L.  &  N.  R. 
Co.,  46  C.  C.  A.  685,  and  108  Fed.  988,  affirmed  by  the  supreme 
court  in  190  U.  S.  273  and  47  L.  Ed.  1047  (1903). 

For  application  by  the  commission  of  the  competition  rule 
to  alleged  preference,  see  10  I.  C.  C.  R.  29.  Where  the  prefer- 
ence in  rate  exceeds  the  competitive  rate,  there  is  as  to  such 
excess  a  case  of  undue  preference  under  this  section.  10  I.  C. 
C.  R.  342. 

§  233  (178).  Discrimination  between  domestic  and  foreign 
traffic  in  import  and  export  rates  not  unjust  preference. — An 

order  was  made  by  the  commission  in  ]\Iarch,  1889,  requiring 
that  imported  traffic  transported  to  any  place  in  the  United 
States  from  a  port  of  entry  or  place  of  reception,  whether  in 
this  country  or  in  an  adjacent  foreign  country,  should  be  taken 
on  the  inland  tariff  covering  other  freights. 

Later,  in  June  of  the  same  year,  in  3  I.  C.  C.  R.  137,  and  2  Int. 
Com.  Rep.  553,  the  commission  ruled  that  in  export  rates  the 
proper  method  was  to  add  to  the  established  inland  rates  from 
the  interior  to  the  seaboard  the  current  ocean  rates.  The  com- 
mission ruled  that  as  ocean  rates  were  not  subject  to  the  control 
of  the  act,  they  were  not  proper  for  consideration  in  creating 
a  dissimilarity  in  circumstances  and  conditions  within  the  mean- 
ing of  the  act.  The  parties  to  the  Export  Rate  case  complied 
with  the  order  of  the  commission,  but  the  import  rate  ruling 
was  contested  by  the  Texas  &  Pacific  Railroad  Company.  The 
commission  ruled  that  the  competition  of  ocean  lines  or  circum- 
stances affecting  the  movement  of  foreign  commerce  before 
reaching  our  own  country  did  not  constitute  a  dissimilarity  of 
circumstances  and  conditions  within  the  meaning  of  the  act. 
Their  ruling  was  sustained  by  the  circuit  court  in  a  proceeding 
to  enforce  the  order  of  the  commission,  52  Fed.  187,  and 
also  by  the  circuit  court  of  appeals,  6  C.  C.  A.  653,  57  Fed. 
948.  The  latter  court  thought  that  some  discrimination  in 
rates  might  be  justified  under  the  circumstances,  but  that  the 
rates  imposed  were  unreasonable.     The  supreme  court  in  16^2  U. 


§    233]  THE   INTERSTATE   COMMERCE   ACT.  321 

S.  197,  40  L.  Ed.  940  (1896),  reversed  both  eourts  and  directed  the 
dismissal  of  the  bill  (Justices  Harlan,  Brown  and  Fuller,  C.  J.. 
dissenting).  The  court  said  that  the  purpose  of  congress  was 
to  facilitate  and  promote  commerce,  and  not  to  reinforce  the 
provisions  of  the  tariff  laws,  and  that  the  effort  of  the  commis- 
sion to  deprive  inland  consumers  of  the  advantage  of  through 
rates  seemed  to  create  the  miscliief  which  it  was  one  of  tlie  ob- 
jects of  the  act  to  remedy,  and  that  among  the  circumstances 
and  conditions  to  be  considered,  as  well  in  the  case  of  traffic 
originating  in  foreign  ports  as  in  the  case  of  traffic  originat- 
ing within  the  limits  of  the  United  States,  was  competition 
at  the  seaports,  and  in  deciding  whether  rates  and  charges, 
made  at  a  low  rate  to  secure  foreign  freights  which  would  other- 
wise go  by  competitive  routes  are  or  are  not  undue  and  unjust, 
the  fair  interest  of  the  carrier  companies  and  the  welfare  of 
the  community  which  is  to  receive  and  consume  the  commodities, 
are  to  be  considered.  The  supreme  court  said  that  the  fact  that 
there  was  a  considerable  disparity  between  other  and  local  rates 
did  not  warrant  the  circuit  court  of  appeals  in  finding  that 
the  disparity  constituted  an  undue  discrimination,  as  no  such 
issue  was  made  before  the  conmiission,  and  the  defendant  was 
entitled  to  have  the  reasonableness  of  the  rate  considered,  in  the 
first  instance  at  least,  by  the  commission  upon  a  full  considera- 
tion of  all  the  circumstances  and  conditions  upon  which  a  legiti- 
mate order  could  be  based.  Especially  was  this  true  when  there 
was  no  person,  firm  or  corporation  claiming  that  he  or  they  had 
been  aggrieved  by  the  disparity  in  the  rates,  the  party  com- 
plaining being  the  commission'itself. 

This  decision  was  construed  as  applying  to  export  rates  as 
well  as  to  import  rates.  The  commission  in  its  report  of  1897 
said  that  the  carriers  insisted  that  this  decision  controlled  the 
rates  for  inland  carriage  to  the  seaboard  of  traffic  for  export, 
and  recommended  that  congress  amend  the  act  giving  the  com- 
mission power  to  control  inland  rates,  both  import  and  export, 
but  no  such  amendment  has  been  enacted. 

It  is  therefore  a  question  of  fact  whether  rates  upon  export 
or  import  traffic  as  well  as  those  upon  domestic  traffic  are  un- 
reasonable and  unjustly  preferential,  but  as  a  matter  of  law, 
it  is  not  any  violation  of  the  act  for  the  carrier  to  make  a  lower 
21 


322  THE    INTERSTATE    COMMERCE    ACT.  [SECTION   3 

rate  to  the  point  of  export  or  from  the  port  of  import  upon  the 
traffic  which  is  exported  or  imported  than  upon  that  which  is 
locally  consumed.    See  8  I.  C.  C.  R.  214. 

§  234.  Milling  in  transit  and  export  trade. — In  14  I.  C.  C. 
Rep.  356,  the  commission  considered  the  case  of  a  miller  in  the 
city  of  New  York  who  competed  in  export  business  with  ship- 
pers from  the  west,  and  it  was  ruled  that  as  he  was  not  entitled 
to  a  milling  in  transit  privilege,  that  he  should  have  the  same 
rate  upon  grain  which  he  subsequently  ground  into  export  flour 
that  the  carriers  accorded  to  interior  mills  upon  export  flour. 

The  ruling  of  the  commission  in  this  case  was  affirmed  by  the 
circuit  court,  S.  T>.  of  N.  Y.,  three  judges  concurring,  168  Fed. 
131  (1909),  which  denied  a  temporary  injunction  against  the 
enforcement  of  the  ruling.  The  court  said  in  its  opinion  that 
the  commission  was  an  administrative  tribunal  dealing  with  prac- 
tical problems,  and  as  long  as  parties  affected  by  its  orders  appear 
and  are  fully  heard,  it  has  power  to  grant  such  relief  as  the  facts 
shown  upon  the  investigation  call  for,  even  though  such  facts 
may  be  presented  by  evidence  technically  outside  of  the  issues 
raised  hy  the  pleadings,  but  were  germane  to  the  subject  matter 
of  the  investigation.  The  commission  was  therefore  empowered, 
where  it  found  that  a  discrimination  existed  against  a  shipper 
or  commodity  to  prescribe  a  relative  rate  so  that  the  charge 
should  be  the  same  as  that  for  its  similar  services  to  other  ship- 
pers or  another  similar  commodity,  instead  of  fixing  an  abso- 
lute maximum  rate,  which  would  enable  the  carriers  to  continue 
the  discrimination  by  reducing  the  rate  to  other  shippers  or  on 
the  other  commodities. 

See  comments  on  this  decision  by  the  commission  in  the  an- 
nual report  of  1909,  p.  30. 

§  235  (179).  Application  of  the  import  rule  to  intermediate 
points  on  the  line. — It  was  ruled  by  the  commisssion,  8  I.  C.  C. 
R.  214,  after  the  decision  in  the  Import  Rate  case,  that  in  the 
ayjplication  of  export  grain  rates  the  carrier  should  in  no  case 
make  the  rate  from  any  point  to  the  seaboard  less  than  from  any 
intermediate  point  on  the  same  line,  and  that  a  rate  on  export 
flour  from  Minneapolis  which  was  one  and  one-half  cents  less 
than  the  domestic  rate  to  the  port  of  export,  with  no  correspond- 


§    23G]  THE   INTERSTATE    COMMERCE   ACT.  323 

ing  concessions  to  intermediate  millers,  was  an  unlawful  discrim- 
ination, and  that  any  line  participating  in  any  such  lower  ex- 
port rate  on  flour  from  ^Mnneapolis  must  make  a  corresponding 
reduction  on  the  same  article  from  all  intermediate  points.  See 
also  9  I.  C.  C.  R.  534. 

As  to  the  publication  of  rates  on  export  traffic,  see  infra,  sec- 
tion G.  See  also  8  I.  C.  C.  R.  185,  and  8  I.  C.  C.  R.  110.  The 
commission  said  in  the  case  first  cited  that  the  Import  Rate  de- 
cision did  not  bar  the  import  and  export  traffic  from  the  purview 
of  the  commission,  although  it  did  require  that  conditions  abroad 
as  well  as  at  home  should  be  considered,  and  that  the  interests 
of  classes,  and  not  a  single  class,  should  be  taken  into  account. 
See  8  I.  C.  C.  R.  304. 

§  236  (180).  Competition  created  by  carriers. — In  the  Nash- 
ville and  Chattanooga  Rate  case,  supra,  the  circuit  court  of 
appeals  in  an  opinion  by  Judge  Taft,  1.  c.  424,  commented  upon 
the  fact  that  the  competition  at  Nashville  Avas  between  railroads 
under  the  same  control,  the  Louisville  &  Nashville  railroad  own- 
ing the  majority  of  the  stock  of  the  Nashville,  Chattanooga  &  St. 
Louis  Railroad  Company,  and  that  but  for  the  restriction  of 
normal  competition  by  the  Southern  Traffic  Association  the  situa- 
tion of  Chattanooga  would  win  for  her  certainly  the  same  rates 
as  Nashville.  The  supreme  court  in  its  opinion  reversing  the 
I'ase,  held  that  the  commission  and  the  circuit  court  and  circuit 
court  of  appeals  had  proceeded  upon  an  erroneous  construction 
of  the  act,  in  holding  that  a  preference  enforced  by  controlling 
competition  could  be  unjust,  and  that  the  assertion  that  the  road 
from  Chattanooga  to  Nashville,  growing  out  of  the  stock  owner- 
sliip,  was  in  effect  the  Louisville  &  Nashville,  was  necessarily 
antagonistic  to  the  express  finding  of  the  commission  that  the 
carriers  through  Chattanooga  and  Nashville  were  placed  in  posi- 
tion where  they  must  meet  the  competition  to  Nashville  or 
abandon  all  traffic  to  that  point.  The  court  said  that  it  could  not 
undertake  the  duty  of  weighing  the  evidence  and  determine  the 
issues  of  fact,  which  the  statute  required  the  commission  in  the 
first  instance  to  pass  upon,  and  the  case  was  therefore  directed 
to  be  re-committed  to  the  commission  for  that  purpose. 

In.  Commission  v.  Southern  Railway  Co.,  117  Fed.  741, 
the  railroad  company  had  acquired  the  ownership  of  the  only 


324  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    3 

road  Avhicli  had  previously  competed  for  the  business  to  a  cer- 
tain point,  but  it  was  hek1  that  this  eouki  not  affect  the  ques- 
tion wliether  its  rates  uTijustly  discriminated  against  such  point 
in  favor  of  another  point  where  competition  existed,  where  it 
affirmatively  appeared  that  the  rates  to  the  non-competitive 
point  had  not  been  increased  since  the  purchase  of  the  com- 
peting road. 

In  the  later  case  of  Ijiterstate  Commerce  Commission  v.  L.  &  N. 
Railroad  Co.,  190  U.  S.  273,  1.  c.  p.  283,  47  L.  Ed.  1047  (1903), 
the  supreme  court  said  that  if  by  agreement  or  combination 
among  carriers  it  w^as  found  that  at  a  particular  point,  rates 
were  unduly  influenced  by  a  suppression  of  competition,  that 
fact  would  be  proper  to  consider  in  determining  the  question 
of  undue  discrimination  and  the  reasonabl-eness  per  se  of  the 
rates  to  such  possible  competitive  points.  It  must  be  an  actual 
and  not  possible  competition.  See  also  infra,  section  4.  It  there- 
fore is  a  question  of  fact  to  be  determined  by  the  commission 
whether  the  preference  is  induced  by  the  competition,  and 
whether  competition  is  forced  upon  the  carrier  or  whether  the 
preference  is  effected  through  an  agreement  or  combination 
stifling  competition.  But  if  the  preference  is  compelled  by  the 
competition,  then  it  is  not  unjust,  under  section  3,  though  the 
rates  may  still  be  unreasonable  per  se  and  on  this  ground  vio- 
lative of  section  1  of  the  act. 

§  237  (181).  The  "Basing  Point  System"  not  illegal.— The 

commission  in  several  cases  had  condemned  what  had  been  called 
the  "Basing  Point  System"  prevailing  in  the  south.  4  I.  C.  C. 
R.  686,  3  Int.  Com.  Rep.  482  and  6  I.  C.  C.  R.  342 ;  6  I.  C.  C. 
R.  361  ;  8  I.  C.  C.  R.  J  42.  This  system  consisted  in  basing  local 
rates  according  to  the  relative  distance  of  the  local  points  by  the 
distance  of  such  points  from  the  competitive  points,  the  rate  being 
ascertained  in  each  case  by  adding  to  the  through  rate  to  the  bas- 
ing point,  the  local  rate  from  that  point  back  to  the  local  point, 
the  result  being  that  the  local  points  were  given  an  advantage  re- 
sulting from  their  proximity  to  the  basing  point  in  proportion  to 
the  degree  of  such  proximity.  The  Interstate  Commerce  Com- 
mission on  the  complaint  of  a  merchant  of  La  Grange,  Alabama, 
made  an  order  upon  the  railroad  to  desist  from  charging  upon 
this  basing  rate  to  La  Grange  based  upon  its  rate  to  Atlanta,. 


§    238]  TUE   INTERSTATE    COMMERCE   ACT.  325 

the  basing  point.  The  circuit  court  sustained  the  order  of  the 
commission.  102  Fed.  709.  This  judgment  was  reversed  by  the 
circuit  court  of  appeals,  108  Fed.  Rep.  988,  and  the  judgment  of 
the  latter  court  was  affirmed  by  the  supreme  court,  Commission  v. 
L.  &  N,  Railroad  Co.,  snpra.  The  latter  court  said  that  as  it  was 
conceded  that  the  rate  on  the  through  freight  from  New  Orleans 
to  Atlanta  was  the  result  of  competition  to  Atlanta,  there  was  a 
resulting  dissimilarity  of  circumstances  wliich  prevented  any  un- 
just preference  in  the  fact  of  a  high  charge  to  LaGrange,  and  that 
there  was  no  just  cause  of  complaint  in  giving  to  the  local  stations 
the  advantage  resulting  from  their  proximity  to  Atlanta,  the 
competitive  point,  as  the  same  result  would  have  followed  if  the 
rate  had  been  fixed  at  Montgomery,  the  competitive  point  nearer 
to  New  Orleans,  and  the  local  rate  fixed  from  thence  on. 

It  was  subsequently  ruled  by  the  commission  (1907),  in  12  I. 
C.  C.  R.  372,  that  in  a  territory  where  the  basing  point  had  been 
m  operation  since  the  advent  of  railroads,  rates  to  a  competing 
point  made  by  a  combination  of  the  through  rate  to  the  nearest 
trade  center  and  the  local  beyond,  need  not,  under  the  con- 
struction of  the  fourth  section  by  the  supreme  court,  be  reduced 
to  the  basis  of  every  neighboring  point  of  like  distance,  when 
the  other  points  in  the  group  whose  rates  are  sought  have  the 
advantage  of  water  or  other  competition.  This  was  prior  to 
the  amendment  of  the  fourth  section  by  the  act  of  1910. 

§  238.  Basing  points  not  exempt  from  regulating  power  of 
commission. — In  Interstate  Commerce  Commission  v.  Chicago 
R.  1.  .^  P.  Co.,  218  U.  S.  88.  54  L.  Ed.  946  (1910),  the  su- 
preme court  (Justices  "White,  Holmes,  and  Lurton  dissent- 
ing) reversed  the  circuit  court  of  the  northern  district  of  Il- 
linois, 171  Fed.  G80,  which  had  enjoined  the  enforcement  of  an 
order  of  the  commission  reducing  the  class  rates  on  through 
freight  from  the  Atlantic  seaboard  to  the  ]Missouri  river  cities. 
It  was  claimed,  and  a  majority  of  the  circuit  judges  held,  that 
this  order  was  beyond  the  power  of  the  commission,  as  if  intro- 
duced a  new  system  of  rate  making  which  had  theretofore  had 
the  Mississippi  river  as  a  basing  point;  but  the  supreme  court 
held  that  on  the  finding  of  the  commission,  which  carried  with 
it  the  presumption  of  correctness,  that  the  through  rates  to  the 
Missouri  river  cities  were  too  high  and  unreasonable,  that  the 


326  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    S 

commission  had  the  power  to  readjust  the  rates,  although  that 
involved  a  change  in  the  basing  points  theretofore  established 
in  rate  making.  The  supreme  court  in  this  case  quoted  from  the 
opinion  of  the  commission  14  I.  C.  C.  R.  312. 

"We  are  not  impressed  with  the  view  that  maldng  rates  on 
certain  basing  lines  should  be  abolished.  No  system  of  rate 
making  has  been  suggested  as  a  substitute  for  it,  except  one 
based  upon  the  postage  stamp  theory  or  one  based  strictly  upon 
mileage.  Either  of  tliese  would  create  a  revolution  in  transpor- 
tation affairs  and  chaos  in  commercial  affairs  that  had  been 
builded  upon  the  system  of  rate  making  now  in  effect.  It  must 
not,  however,  be  assumed  that  a  basing  line  for  rates  may  be  es- 
tablished and  be  made  an  impassable  barrier  for  through  rates, 
or  that  cities  or  markets  located  at  or  upon  such  basing  line  have 
any  inviolable  possession  of  or  hold  upon  the  right  to  distribute 
traffic  in  or  from  the  territory  lying  beyond.  Development  of 
natural  resources,  increase  in  population,  growth  of  manufactur- 
ing or  producing  facilities  and  increased  traffic  on  railroads, 
create  changed  conditions  which  may  warrant  changes  in  rates 
and  in  rate  adjustments  in  order  to  afford  just  and  reasonable 
opportunity  for  interchange  of  traffic  between  points  of  produc- 
tion and  points  of  large  consmuption. ' ' 

And  the  supreme  court  added: 

"It  was  the  sense  of  the  commission,  however,  that  such 
points  could  not  be  immovable  forever  and  fixed  forever  against 
power  of  changing,  or  that  through  rates  based  on  such  points 
must  be  exempt  from  regulation  no  matter  what  their  character, 
or  be  constituted  at  the  will  of  the  railroads  of  the  sum  of  local 
rates  or  the  sum  of  rates  from  one  basing  point  to  another,  how- 
ever unjust  the  rates  might  be." 

The  commission  has  ruled,  18  I.  C.  C.  R.  502,  that  if  the  basing 
point  system  is  adopted,  it  must  be  applied  alike  to  all  places 
where  real  dissimilarity  of  circumstances  or  controlling  competi- 
tion does  not  exist.  See  also,  as  to  application  of  system  in  rate 
making,  16  I.  C.  C.  R.  20,  56,  182,  134,  254;  7  I.  C.  C.  R.  30,  197, 
302. 

In  this  connection  see  orders  of  the  commission  upon  applica- 
tion for  relief  from  the  long  and  short  haul  provision  of  section 
4  and  creating  zones  of  traffic  as  basing  points  in  connection 
with  transcontinental  traffic,  §  297,  infra. 

§  239  (182).  Grouping  of  rates. — ^While  section  4  of  the  act 
prohibits  the  charging  of  a  greater  rate  for  the  shorter  distance, 
there  is  no  prohibition  against  charging  the  same  aggregate  rates 


§    239J  THE  INTERSTATE   COMMERCE   ACT.  327 

on  like  traffic  for  the  longer  distance  over  the  same  line  in  the 
same  direction.  There  is  in  the  act  no  requireinent  of  mile- 
age apportionment  of  rates.  The  commission  in  several  cases 
has  passed  upon  the  so  called  "group"  or  "blanket"  rates, 
that  is,  the  making  of  the  same  rates  for  different  points  situ- 
ated on  the  same  line,  or  on  different  lines  under  the  same  control 
communicating  vith  a  common  centre  and  being  the  same  or 
approximately  the  same  distance  from  such  centre  and  posses- 
sing substantially  the  same  commercial  relations.  The  principle 
was  applied  in  2  I.  C.  C.  R.  540,  and  2  Int.  Com.  Eep.  313,  to  a 
large  iiunibor  of  mines  composing  a  coal  mining  district  extend- 
ing across  the  state  of  Illinois  to  points  in  western  Wisconsin, 
Iowa  and  Minnesota,  the  distance  by  some  part  of  the  route  being 
substantially  a  fair  equivalent  for  the  distance  from  other  points 
and  the  commercial  necessities  being  substantially  the  same  for 
all. 

In  another  case  the  grouping  of  coal  rates  at  the  rate  of  ninety 
cents  per  ton  for  a  distance  covering  a  radius  of  forty  miles 
around  Pittsburgh,  Pennsylvania,  was  sustained.  2  I.  C.  C.  R. 
618,  2  Int.  Com.  Rep.  436.  The  commission  said  that  actual 
undue  prejudice  or  damage  of  which  the  rate  is  the  cause  must 
result  to  more  favorably  situated  producers  to  render  a  group 
rate  unlawful.  In  this  case  the  commission  cited  the  practice 
under  the  English  Railway  &  Canal  Traffic  Act  of  1854,  where  it 
had  been  held  that  the  grouping  of  rates  was  not  unlawful,  unless 
ns  a  matter  of  fact  the  effect  was  to  produce  an  undue  prefer- 
ence, and  noted  that  the  new  English  act  of  1888  had  made 
specific  provision  for  grouping  of  rates  in  conformity  with  the 
rule  which  had  been  acted  on  by  the  commissioners  and  the 
courts.  See  also  4  I.  C.  C.  R.  533,  and  3  Int.  Com.  Rep.  460. 
where  groupings  of  mines  in  the  Lehigh  anthracite  coal  region 
was  held  to  involve  no  unreasonable  disadvantage. 

Thus  in  4  I.  C.  C.  R.  417,  3  Int.  Com.  Rep.  400,  it  was  found 
that  the  rates  on  ivlicat  and  ivlieat  flonr.  for  reasons  peculiar 
to  the  territory  lying  west  of  the  ]\Iississippi  river  and  com- 
prising the  large  portion  of  Texas,  the  state  of  ^Missouri  and  a 
considerable  portion  of  Kansas,  were  grouped  without  refer- 
ence to  distance.  In  7  I.  C.  C.  R.  92,  the  subject  of  grouping 
of  rates  was  considered  in  its  application  to  the  rates  on  milk, 
which  was  fixed  at  a  uniform  rate  from  all  interstate  shipping 


328  THE    INTERSTATE    COMMERCE    ACT.  [SECTION   3 

stations  along  the  lines  of  the  New  York,  Susquehanna  &  Western 
Railroad  west  of  the  Hudson  river  to  the  points  of  delivery  at 
Weohawken,  Hoboken  and  Jersey  City.  The  commission  said, 
reaffirming  6  I.  C.  C.  R.  131,  that  the  practice  of  making  one 
rate  for  the  same  product  over  a  very  large  district  and  thus 
equalizing  the  burdens  of  transportation  to  the  same  market  was 
only  justified  under  special  and  exceptional  circumstances.  The 
(rircnmstances  in  this  case  were  peculiar,  in  that  the  furnishing 
of  an  extra  perishable  article  like  milk  in  no  greater  quantity 
than  is  required  for  daily  use  in  a  great  city  was  a  business  which 
falls  naturally  to  those  producers  nearest  the  city  who  were  able 
to  provide  the  needed  supply.  The  commission  found  under  the 
facts  that  a  uniform  or  blanket  rate  from  all  stations  of  the  road 
was  an  unreasonable  preference  to  the  more  distant  stations,  and 
said  there  should  be  at  least  four  divisions,  extending  respect- 
ively forty  miles,  fifty-two  miles,  one  hundred  miles,  one  hun- 
dred and  ninety  miles  and  stations  beyond  one  hundred  and 
ninety  miles,  with  rates  adjusted  to  the  respective  groups  ac- 
cording to  distance.  On  this  application  of  the  grouping  of  rates 
to  milk  traffic,  see  2  I.  C.  C.  R.  272,  and  2  Int.  Com.  Rep.  162. 

In  5  I.  C.  C.  R.  478,  and  4  Int.  Com.  Rep.  183,  '' blanket"  or 
group  class  rates  applying  upon  the  Northern  Pacific  road  for 
a  distance  of  over  five  hundred  and  eighty  miles  were  found 
relatively  unreasonable. 

In  7  I.  C.  C.  R.  43,  group  rates  of  seventy  per  cent,  on  sec- 
ond class  articles  and  forty-four  per  cent,  on  third  class  apply- 
ing within  a  distance  of  two  hundred  and  seventy-one  miles 
from  Pritchard.  Alabama,  to  Verona,  ]\Iississippi,  on  shipments 
over  an  extreme  distance  of  six  hundred  and  forty  miles  to 
East  St.  Louis,  and  which  in  the  next  two  hundred  miles  fall 
to  thirty  per  cent,  on  second  class  and  twenty-two  per  cent,  on 
the  third  class,  were  ruled  prima,  facie  unreasonable  and  unjustly 
discriminative  against  points  within  the  'group  which  were 
nearer  to  East  St.  Louis,  and  unfair  as  to  shipments  from 
Verona.  The  commission  said  however  that  there  were  probably 
circumstances  under  which  a  group  rate  of  this  kind  might  be 
justifiable,  and  no  order  was  made  pending  an  opportunity  for 
the  defendant  to  readjust  its  group  scale,  or  justify  the  apparent 
discrimination. 


§    240]  THE   INTERSTATE   COMMERCE   ACT.  329 

§  240  (183).  Qualifications  in  the  application  of  the  com- 
petition rule. — The  judicial  construction  of  tlie  term  "unjust 
preference"  by  the  eliuiination  therefrom  of  the  preferences 
compelled  by  railway  competition  has  very  materially  affected 
the  enforcement  of  the  third  section  by  the  commission.  Thus 
during  the  first  ten  years  after  tlie  enactment  of  the  law,  the 
commission  proceeded  upon  a  different  theory  of  the  law,  and 
the  decisions  reported  in  the  first  six  volumes  of  the  Interstate 
Commerce  Commission  Reports,  and  all  of  the  Interstate  Reports, 
in  the  construction  of  this  section  as  well  as  of  section  4,  are 
based  upon  the  theory  tliat  tlie  competition  of  railways  subject 
to  the  act  was  not,  although  it  was  conceded  that  water  competi- 
tion was,  a  justification  of  a  higher  rate  for  the  shorter  haul 
and  the  resulting  preference  of  localities.  In  8  I.  C.  C.  R.  107, 
the  commission  said  that  the  greater  charge  for  the  shorter  than 
for  the  longer  haul  over  the  same  line  in  the  same  direction  had 
been  made  in  no  case  which  had  been  presented  to  them,  except 
where  the  competition  existed  at  the  longer  distance  points  and 
was  set  up  as  the  sole  excuse  for  such  greater  charge. 

But  under  the  decisions  of  the  supreme  court,  the  application 
of  the  competitive  rule  is  subject  to  the  following  qualifica- 
tions: First,  the  competition  must  compel  the  lower  rate;  that 
is,  the  competition  must  be  controlling.  The  carrier  must  either 
reduce  its  rates  or  lose  the  business.  Second,  the  competition 
must  not  be  created  by  the  carrier ;  that  is,  the  preference  must 
not  be  affected  through  an  agreement  or  combination  of  the  car- 
rier with  other  carriers  stifling  competition.  Third,  the  competi- 
tive rate  must  be  at  the  preferred  point  remunerative  to  the 
carrier.    Fourth,  the  rates  must  be  reasonable  in  themselves. 

This  reasonableness  of  rates  in  themselves  must  be  deter- 
mined in  the  light  of  all  the  circumstances.  The  commission  has 
ruled,  9  I.  C.  C.  R.  581,  following  the  decision  of  Chairman 
Coolcy  in  2  I.  C.  C.  R.  231  and  2  Int.  Com.  Rep.  137,  that  no 
rates  can  be  reasonable  in  themselves  within  the  contempla- 
tion of  tlie  act  which  are  made  regardless  of  proportion;  that 
rates  to  be  reasonable  must  be  under  all  the  facts  and  cir- 
cumstances relatively  reasonable.  In  the  ease  cited,  the  com- 
mission ruled  that  although  there  was  a  substantial  dissimilar- 
ity of  circumstances  and  conditions  as  between  Nashville  and 
intermediate  points  on  the  Louisville  &  Nashville  Railroad  to 


330  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    3 

Louisville,  so  that  section  4  of  the  act  did  not  apply,  that  a  dif- 
ference of  one  cent  in  the  rates  fully  offset  this  difference  in  cir- 
cumstances and  conditions,  and  that  any  greater  difference 
rendered  the  rates  from  the  intermediate  points  relatively  un- 
reasonable in  violation  of  sections  1  and  3,  although  the  com- 
mission said  that  it  did  not  feel  competent  to  say  that  the  rates 
from  the  intermediate  points,  independent  of  the  Nashville 
rate,  were  absolutely  unreasonable  in  and  of  themselves. 

The  commission  has  considered  the  claims  of  unjust  prefer- 
ence in  the  adjustment  of  rates  as  between  localities  in  a  great 
variety  of  cases  from  all  parts  of  the  country.  Thus  in  8  I.  C. 
C.  R.  608,  the  subject  of  the  transcontinental  rates  was  con- 
sidered, and  it  was  ruled  that  the  rates  from  Denver  to  San  Fran- 
cisco should  not  be  higher  than  the  rates  from  IMissouri  river 
points  to  San  Francisco.  It  was  found  however  that  the  rate 
on  sugar  might  be  higher  to  Denver  from  San  Francisco  than 
to  the  jMissouri  river  on  the  ground  that  the  circumstances  and 
conditions  governing  the  traffic  were  different  when  it  was  car- 
ried to  Missouri  river  points  than  when  it  stopped  at  Denver, 
but  that  there  was  nothing  shown  justifying  higher  intermediate 
rates  on  any  article  west  bound. 

In  10  I.  C.  C.  R.  460,  decided  January  17,  1905,  the  differ- 
ential between  Wichita  and  Kansas  City  and  other  Missouri 
river  points  of  fifteen  cents  against  "Wichita  was  ruled  excessive. 
In  a  former  case,  6  I.  C.  C.  R.  586,  such  a  differential  was 
held  violative  of  the  long  and  short  haul  clause,  but  that  decision 
was  rendered  before  the  construction  of  the  clause  by  the  su- 
preme court.  As  railroad  competition  existed  at  Kansas  City, 
a  higher  charge  to  Wichita  was  justified,  but  the  amount  of  the 
differential,  fifteen  cents  per  one  hundred  pounds,  on  sugar  in 
carloads,  was  ruled  unduly  preferential  under  section  3.  The 
rate  from  New  Orleans  to  Wichita,  forty  cents  per  one  hundred 
pounds,  was  also  ruled  to  be  unreasonable  per  se. 

In  8  I.  C.  C.  R.  503,  the  rates  from  St.  Louis,  Nashville  and 
Chattanooga,  to  Hampton  and  Palatka,  in  Florida,  were  ruled 
prejudicial  to  the  Hampton  merchants.  That  while  the  com- 
petition at  Palatka  justified  a  lower  rate,  the  difference  should 
not  be  greater  than  the  local  rate  from  Palatka  to  Hampton. 
In  9  I.  C.  C.  R.  160,  rates  on  sugar  from  New  Orleans  to  Tif- 
ton,  Georgia,  were  ruled  unduly  prejudicial  as  compared  with 


§    241]  THE   INT?:FtSTATE   COMMERCE   ACT.  331 

rates  to  other  Georgia  points.  See  also  on  general  subject  of 
undue  preference  to  localities,  8  I.  C.  C.  R.  31G,  and  8  I.  C.  C. 
R.  290. 

"Where  an  existing  relation  of  rates  is  found  to  be  unduly 
preferential  as  between  localities,  the  discrimination  may  be 
corrected  by  raising  one  rate  or  reducing  the  other,  provided 
of  course,  the  rate  when  adjusted  is  reasonable  in  itself.  See  10 
I.  C.  C.  R.  456.  In  this  case  it  was  ruled  that  the  existence  of 
water  competition  between  Buffalo  and  New  York  did  not 
justify  any  wider  difference  in  the  rates  from  Saginaw  and 
Buffalo  to  points  on  the  New  York  and  Long  Branch  Rail- 
road than  existed  in  the  rates  from  those  shipping  points  to- 
New  York. 

These  and  other  cases  cited  under  the  different  topics  of  this 
section  wall  illustrate  the  almost  infinite  variety  of  circum- 
stances bearing  upon  the  complex  question  of  the  adjustment 
of  rates  between  localities. 

§  241  (184).  Recognition  of  natural  advantages  of  localities 
not  an  unjust  preference. — The  commission  has  repeatedly  ruled 
that  a  town  favorably  situated  for  trade,  possessing  natural 
advantages  therefor,  is  entitled  to  the  benefits  in  rates  natur- 
ally arising  from  such  location.  See  5  I.  C.  C.  R.  571,  4  Int. 
Com.  Rep.  230 ;  10  I.  C.  C.  R.  148  (the  Michigan  Salt  Case) .  The 
law  requires  the  regulation  of  railroad  charges  according  to 
the  ascertained  rights  of  persons  and  places,  and  it  is  not  an 
agency  for  the  regulation  of  trade  by  enabling  shippers  or 
communities  to  do  business  by  putting  them  on  even  terms  with 
rivals  more  remote  from  competitive  territory.  6  I.  C.  C.  R. 
458,  8  I.  C.  C.  R.  409.  The  equal  right  of  a  competing  lo- 
cality is  neither  increased  nor  diminished  by  municipal  sub- 
scriptions advanced  for  the  building  of  a  road.  2  I.  C.  C.  R. 
147  and  2  Int.  Com.  Rep.  95. 

The  refusal  to  give  a  through  rate  is  not  an  unjust  discrim- 
ination to  a  locality  when  the  same  rule  is  applied  to  all  towns 
and  the  privilege  accorded  to  none,  although  the  refusal  may 
operate  prejudicially  to  one  town  and  favorably  to  another,  as 
the  discrimination  must  consist  in  doing  for  Or  allowing  to  one 
party  or  place  what  is  denied  to  another,  1  I.  C.  C.  R.  401,  and 
1  Int.  Com.  Rep.  703. 


332  THE    INTERSTATE    COMMERCE    ACT.  [SECTION   3 

Neither  can  a  railroad  be  held  to  discriminate  against  a 
town  which  it  does  not  reach  and  in  whose  carrying  trade  it 
does  not  partidipate.    5  I.  C.  C.  R.  264,  and  4  Int.  Com.  Rep.  65. 

"While  the  commission  has  conceded  that  the  recognition  of 
natural  advantages  of  localities  is  not  unjustly  preferential,  yet 
it  has  also  ruled  that  the  mere  fact  that  one  point  is  larger 
than  another  with  more  business  does  not  justify  a  discrimina- 
tion in  its  favor,  9  I.  C.  C.  R.  42,  and  that  one  of  the  underly- 
ing principles  of  the  act  was  equality  between  great  and  small. 
See  also  2  I.  C.  C.  R.  25  and  2  Int.  Com.  Rep.  32. 

§  242  (185).  Competing  cities  on  opposite  banks  of  rivers. — 
The  principle  that  a  city  is  entitled  to  the  benefits  arising  from 
its  location,  and  that  when  it  enjoys  exceptional  advantages  in 
one  respect  it  should  not  therefore  be  subjected  to  discrimination 
in  other  respects,  has  been  applied  in  the  case  of  cities  situated 
on  the  banks  of  rivers,  which  railroads  must  cross  by  expensive 
bridges  for  which  an  arbitrary  toll  is  charged,  or  which  must 
be  allowed  for  in  an  apportionment  of  through  rates.  Several 
such  instances  have  been  presented  to  the  commission.  Thus 
the  cases  of  Omaha  and  Council  Bluffs,  St.  Louis  and  East  St. 
Louis,  Cincinnati  and  Louisville  were  presented,  though  in  the 
latter  case  the  cities  are  situated  on  the  opposite  banks  of  the 
Ohio  river  some  distance  apart,  but  are  competitors  for  the 
business  of  the  same  territory. 

In  the  case  of  Cincinnati,  7  I.  C.  C.  R.  180,  complaint  was 
made  by  the  Freight  Bureau  of  the  Chamber  of  Commerce 
against  the  higher  rates  charged  from  Cincinnati  than  Louis- 
ville to  southern  points.  The  commission  said  that  the  loca- 
tion of  Cincinnati  upon  the  north  bank  of  the  Ohio  river  and 
the  fact  that  the  railroads  leading  south  must  cross  that  river 
by  expensive  bridge  charges  justified  a  higher  differential  from 
Cincinnati  over  rates  from  Louisville  on  the  south  bank  of  the 
river.  As  the  commission  had  nothing  before  it  except  the 
fact  of  distance,  it  did  not  pass  any  opinion  as  to  whether  the 
existing  differentials  were  just  or  excessive. 

In  the  case  of  Omaha  and  Council  Bluffs,  7  I.  C.  C.  R.  386, 
it  was  ruled  that  there  was  no  unjust  discrimination  against 
Omaha  in  the  fact  that  rates  to  points  in  Iowa  were  higher 
for  Omaha  than  for  Council  Bluffs  by  the  amount  of  the  bridge 
toll  on  an  expensive  bridge  over  the  INIissouri  river.'    It  was 


§    243]  THE    INTERSTATE    COMMERCE    ACT.  333 

said  in  the  opinion  that  all  like  or  group  rates  were  frequently 
applied  to  cities  considerably  further  apart  than  Omaha  and 
Council  Bluifs,  but  that  the  usage  in  this  regard  was  not  so 
uniform  and  well  established  as  to  make  their  application  to 
those  cities  even  prima  facie  unjust. 

In  5  I.  C.  C.  R.  57  and  3  Int.  Com.  Rep.  701,  an  East  St. 
Louis  miller  was  ruled  entitled  to  the  advantage  of  his  location 
on  the  east  side  of  the  river  as  against  his  competitors  on  the 
other  side  of  the  river  in  St.  Louis,  and  a  railroad  ter- 
minating in  East  St.  Louis  which  allowed  St.  Louis  millers  a 
rebate  for  the  cost  of  their  teams  across  the  bridge  to  the  rail- 
road station  was  unjustly  discriminating  against  the  East  St. 
Louis  miller,  and  the  latter  was  therefore  entitled  to  a  reduc- 
tion of  six  cents  a  barrel  as  to  flour  handled  by  him  to  the 
station  on  the  rates  in  force,  as  long  as  the  railroads  bore  that 
amount  of  the  cost  of  carriage  for  the  St.  Louis  shippers. 

§  243  (186).  Differentials  between  competitive  cities.— The 
intense  competition  of  modern  commerce  is  illustrated  in  the 
complaints  made  to  the  commission  by  the  Boards  of  Trade  or 
other  commercial  organizations  of  different  cities  against 
alleged  discrimiiiations  in  the  relative  railroad  rates  to  com- 
peting localities.  The  differentials  allowed  by  the  trunk  line 
associations,  particularly  on  the  grain  traffic  from  the  west  to 
the  seaboard,  as  between  the  different  seaboard  cities,  have 
been  very  exhaustively  investigated.  Thus  in  the  case  of  the 
alleged  discriminations  against  Boston,  1  I.  C.  C.  R.  436  and 
1  Int.  Com.  Rep.  756,  the  commission  ruled  in  1888  that  the 
then  existing  differentials  between  Boston  and  New  York, 
being  ten  cents  per  hundred  pounds  on  the  first  and  second 
classes,  and  five  cents  per  hundred  on  the  four  other  classes, 
<m  traffic  from  west  of  Buffalo,  were  not  unreasonable.  The 
conclusion  was  based  upon  the  greater  cost  of  transportation 
to  Boston,  the  greater  volume  of  business  to  and  from  New 
York,  the  competition  by  water  and  through  lakes  and  canal  and 
Hudson  river  to  New  York,  and  the  geographical  and  com- 
mercial advantages  of  New  York. 

Later  however  in  1802,  the  commission  re-examined  the 
subject  and  concluded  that  the  differential  was  excessive  and 
should  be  made,  not  by  adding  an  arbitrary  sum  to  the  New 


334  THE    INTERSTATE    COMMERCE    ACT.  [SECTION   3 

York  rate,  but  by  adding  a  percentage,  ten  per  cent,  to  the 
New  York  rate.  In  this  case  the  commission  ruled  that  the  doc- 
trine of  estoppel  was  not  applicable,  as  the  commission  was  not 
a  court,  and  that  the  whole  spirit  and  scope  of  the  act  made  the 
report  and  order  of  the  commission  in  no  sense  final,  except  in 
the  sense  that  the  parties  may  be  impressed  with  the  justice  of 
the  order  and  acquiesce  therein.  5  I.  C.  C.  R.  166,  3  Int.  Com, 
Rep.  830. 

In  1898  the  commission,  on  the  complaint  of  the  New  York 
Produce  Exchange,  investigated  the  differentials  allowed  by 
the  railroads  of  two  cents  to  Philadelphia  and  three  cents  to 
Baltimore  below  the  New  York  rate  on  grain,  flour  and  pro- 
visions. 7  I.  C.  C.  R.  612.  The  commission  made  an  exhaus- 
tive investigation  of  the  commerce  of  the  three  ports,  and  con- 
eluded  that  the  differentials  were  legitimately  based  upon  the 
competitive  relations  of  the  c&rriers,  and  did  not  result  in  any 
unlawful  preferences  or  advantage  to  Philadelphia  or  Balti- 
more over  the  city  of  New  York.  It  was  contended  in  this 
case  that  the  rates  were  really  made  by  the  trunk  line  associa- 
tions, but  the  commission  ruled  that,  so  far  as  the  alleged  viola- 
tion of  the  third  section  was  concerned,  this  was  immaterial. 

Still  another  application  was  made  in  1904;  and  in  an  opinion 
In  11  I.  C.  C.  R.  13,  the  differentials  were  again  considered,  this 
time  relating  only  to  export  trade.  The  commission  ordered  a 
reduction  of  two  cents  on  flour  at  Baltimore  and  one  cent  at 
Philadelphia,  allowing  the  existing  export  differentials  other- 
wise to  remain  in  force.  Commissioner  Clemens  dissented,  say- 
ing that  lie  did  not  think  that  competing  carriers  could  lawfully 
effect  though  the  agency  of  the  commission  a  restraint  of  com- 
petition in  trade  between  themselves  and  the  ports,  when  such 
action  on  their  own  part  would  be  unlawful. 

On  a  complaint  of  the  Saginaw  Board  of  Trade  (17  I.  C.  C. 
R.  128),  it  was  ruled  that  the  proximity  of  Detroit  and  Toledo 
to  the  great  channels  of  through  transportation  and  their  loca- 
tion on  direct  through  routes  where  the  amount  of  traffic  is 
very  great  and  the  general  operating  and  traffic  conditions  are 
favorable,  are  elements  that  cannot  be  ignored  by  the  rate 
maker  and  must  necessarily  tend  to  lower  rates  than  can  be 
accorded  to  communities  that  are  removed  from  these  great 
streams  of  traffic. 


§    245]  THE   INTERSTATE   COMMERCE   ACT.  335 

Cases  of  alleged  discrimination  in  relative  rates  between 
conii)eting  cities  have  been  investigated  iu  diU'erent  sections 
of  the  country.  As  in  the  case  of  alleged  unreasonable  rates, 
the  conclusions  of  the  commission  are  not  adjudications,  and 
as  the  commission  observed  in  the  case  of  the  Boston  differen- 
tial, they  do  not  preclude  the  commission  itself  from  reinves- 
tigation. A  rate,  which  is  relatively  reasonable  at  one  time,  may 
become  through  changed  conditions  relatively  unreasonable. 

§  244.  Preference  in  demurrage  charges. — Undue  preference 
between  competing  cities,  or  between  competitors  in  business, 
may  be  shown  iu  the  allowance  of  demurrage ;  that  is,  in  allow- 
ing time  unreasonably  small  in  one  place  and  unreasonably  long 
in  another,  8  I.  C.  C.  Rep.  351.  Sec  also  7  I.  C.  C.  Rep.  591.  The 
commission  may  afford  relief  from  the  imposition  of  demurrage 
charges  upon  a  showing  that  the  complainant  is  so  subject, 
either  to  unjust  discrimination  or  to  the  payment  of  unreason- 
able charges,  13  I.  C.  C.  Rep.  571.  After  allowing  a  reasonable 
time  for  unloading  cars,  the  carrier  may  impose  such  charges  for 
further  detention  as  will  afford  a  speedy  relief  to  its  equipment. 
If)  I.  C.  C.  Rep.  116.  Where  a  railroad  extends  the  time  of  free 
delivery  at  one  place,  they  must  treat  alike  all  points  similarly 
situated,  see  16  I.  C.  C.  Rep.  497.  The  commission,  however,  has 
no  jurisdiction  over  the  question  of  whether  the  demurrage 
charges  exacted  by  the  carrier  constitute  a  lawful  lien  upon  the 
property,  13  I.  C.  C.  Rep.  571.  The  right  of  a  railroad  to  exact 
demurrage  charges  while  the  cars  are  standing  on  a  siding  owned 
and  operated  by  the  railroad,  which  was  constructed  for  the 
use  of  complainant,  is  not  affected  by  the  fact  that  the  cars  are 
owned  by  the  complainant. 

§  245.  Uniform  demurrage  rules  recommended. — The  cora- 
mis.sion  in  its  23rd  annual  report  (1900)  calls  attention,  p.  13. 
to  the  adoption  of  a  uniform  code  of  car  demurrage  rules  by  the 
National  Association  of  Railway  Commissions,  an  association 
comprising  the  membership  of  all  the  state  railroad  commissions 
of  the  United  States.  A  report  was  made  to  this  association 
showing  that  the  transportation  system  of  the  country  was  very 
much  embarrassed  by  the  undue  holding  of  cars  by  shippers  and 
receivers  of  freight.    A  code  of  rules  was  prepared  by  this  asso- 


336  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    3 

ciation,  the  most  cliaraoteristic  features  of  which  are  the  tendency 
of  limiting  "free-time"  to  the  actual  requirements  of  the  con- 
signor and  consignee  and  the  refusal  of  recognition  to  rules 
which  are  employed  as  instruments  of  discrimination.  The  code 
thus  adopted  by  the  National  Association  has  been  endorsed  by 
the  Interstate  Commerce  Commission.  The  commission  says  in 
this  report  that  it  has  been  estimated  by  competent  authority  that 
the  general  adoption  and  enforcement  of  demurrage  rules  allow- 
ing the  smallest  measure  of  free  time  consistent  with  the  needs 
of  the  public  is  equivalent  to  the  addition  of  100,000  cars 
for  the  country's  available  car  supply.  The  commission  says 
also  "Co-operation  between  the  federal  and  state  railroad  com- 
missioners with  a  view  to  securing  the  maximum  of  transporta- 
tion efficiency  and  at  the  same  time  assuring  equal  services  to 
shippers  and  receivers  in  all  parts  of  the  county,  so  far  as  they 
may  be  possible,  augurs  well  for  the  future  government  regula- 
tion." 

r 

§  246.  Different   forms    of   undue   preference. — It   may   be 

stated  generally  that  any  form  of  discrimination  between  per- 
sons or  localities  in  the  performance  of  any  of  the  duties  of  a 
carrier,  whether  such  duties  are  imposed  by  the  common  law,  or 
by  statute,  or  by  contract,  would  be  violative  of  this  section. 
Thus  the  failure  to  publish  through  rates  to  a  particular  town, 
while  such  through  rates  are  established  and  published  to  other 
points  on  the  road,  operates  as  an  unlawful  discrimination 
against  that  town.    9  I.  C.  C.  R.  221. 

In  any  of  the  so  called  "accessorial  services"  which  may  be 
rendered  by  the  carrier,  there  must  be  no  unjust  preference  of 
localities  or  individuals  in  providing  such  services.  Any  in- 
justice resulting  from  the  allowance  and  non-allowance  by  the 
carriers  of  such  privileges  and  facilities  is  violative  of  section 
3,  as  well  as  of  section  2.    See  7  I.  C.  C.  R.  556. 

•The  differential  between  carload  and  less  than  carload  rates 
may  be  unjustly  prejudicial  to  localities,  as  well  as  unjustly 
discriminative  as  between  individuals.  See  9  I.  C.  C.  R.  318, 
and  section  2,  supra. 

Where  the  circumstances  and  conditions  of  the  localities  are 
dissimilar,  there  can  be  no  unjust  preference  under  section 
3,  as  there  can  be  unjust  discrimination  under  section  2.     See 


55    247 J  THE  INTERSTATE   COMMERCE   ACT.  337 

Grand  Haven  Cartage  Case,  supra.  Tims  it  is  not  an  unjust 
discrimination  against  a  town  situated  on  a  branch  line  to 
charge  it  a  higher  rate  than  an  intermediate  point  on  the 
through  line,  even  though  such  intermediate  point  enjoys  the 
same  rate  as  the  terminal  point,  5  I.  C.  C.  JX.  44  and  3  Int. 
Com.  Eep.  706. 

In  4  I.  C.  C.  R.  131  and  3  Int.  Com.  Rep.  162,  the  commission 
ruled  that  the  acquisition  and  consolidation  by  a  carrier  under 
one  system  or  arrangement  of  different  competing  lines  of  road 
serving  the  same  territory  in  the  carriage  of  competitive  trdfifio 
to  the  same  markets  did  not  allow  it  to  take  advantage  of  the 
privilege  to  deprive  the  public  of  the  benefits  of  fair  competition, 
nor  afford  warrant  for  oppressive  discrimination  for  its  own 
interests,  such  as  equalizing  profits  of  the  several  divisions ;  but 
that  its  duty  to  the  public  required  that  its  service  must  be  alike 
to  all  who  were  situated  alike. 

A  carrier  in  order  to  build  up  and  foster  industries  on  its  line 
cannot  lawfully  refuse  to  carry  the  products  of  like  industries 
located  on  connecting  lines.  15  I.  C.  C.  R.  620;  12  I.  C.  C.  R. 
183;  13  I.  C.  C.  R.  460. 

It  was  held  in  Foster  v.  C,  C,  C.  &  St.  L.  R.  Co.,  56  Fed. 
434,  that  the  action  of  a  railroad  passenger  agent  guaranteeing 
that  a  theatrical  troupe  to  whom  he  sold  a  party  rate  ticket 
should  arrive  at  its  destination  in  a  given  time,  was  not  a  giving 
of  an  undue  or  unreasonable  preference,  and  the  guarantee  was 
held  valid  and  enforcible. 

§  247.  Undue  preference  in  allowance  for  grain  elevator 
service. — The  commission  in  several  cases  had  considered  the 
matter  of  allowance  by  the  railroads  to  the  owners  and  operators 
of  elevators.  Thus,  it  ruled,  12  I.  C.  C.  R.  112,  that  it  was  an  un- 
lawful preference  to  furnish  at  certain  cities  on  its  line  elevator 
allowance  or  other  free  services  in  connection  with  the  elevation, 
transfer,  mixing,  cleaning,  clipping,  drying,  weighing,  storage, 
loading  out  or  shipment  of  grain  wliieli  were  not  at  the  same 
time  granted  or  furnished  in  like  or  equivalent  service  or  allow- 
ance to  the  same  degree  of  extent  at  another  city  on  the  line. 

It  was  also  ruled,  12  I.  C.  C.  R.  85.  that  a  carrier  could  con- 
struct and  operate  an  elevator  itself  or  furnisli  elevation  by 
arrangement  with  the  owner  of  an  elevator;  and  the  amount  of 
22 


338  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    3 

compensation  paid  by  the  carrier,  owner,  or  an  elevator  render- 
ing this  service,  was  of  no  concern  to  shippers  or  other  carriers 
unless  it  operated  to  affect  the  rates  charged  by  the  carrier  of 
the  grain  traffic  or  by  some  device  a  portion  of  the  allowance  is 
returned  by  the  shipper  and  thus  becomes  a  rebate ;  but  it  was 
not  a  rebate  when  the  allowance  did  not  exceed  the  actual  cost. 

In  the  matter  of  the  allowance  by  the  Union  Pacific  Ry.  Co.  to 
Peavey  &  Co.,  14  I.  C.  C.  R.  315,  317,  510,  it  was  ruled  that 
the  allowance  made  to  the  company  for  the  cost  of  clearing  the 
commercial  benefits  growing  out  of  the  mixing,  treating,  storing, 
weighing,  or  inspecting  of  the  grain,  was  an  undue  preference 
and  unlawful.  This  latter  order  was  taken  into  court;  and  in 
Peavey  &  Co.  v.  Union  Pacific  R.  Co.,  et  al.,  176  Fed.  409  (1910), 
it  was  held  by  the  judges  of  the  8th  circuit  that  tliis  order  was 
beyond  the  power  of  the  commission  and  was  therefore  enjoined, 
as  in  effect  it  prohibited  all  compensation  to  the  owner  or  opera- 
tor of  the  elevator  for  elevation  and  transfer  in  transit.  In  this 
opinion  the  court  said  that  the  amendment  of  1906  had  continued 
the  non-regulation  and  practice  of  allowing  reasonable  compen- 
sation for  elevation  and  transfer  in  transit  to  shippers  who  arc 
also  owners  of  elevators ;  and  the  clear  limitation  in  that  amend- 
ment of  the  power  of  the  commission  to  the  determination  of  the 
reasonableness  of  allowances ,  then  made  was  an  implied  and 
effective  prohibition  of  the  commission  forbidding  the  allowance 
to  the  shippers  or  owners  of  reasonable  compensation  for  eleva- 
tion and  transfer  in  transit  of  grain  through  their  elevators. 
The  court  said  further  the  allowance  was  not  a  rebate  because 
it  was  not  a  concession  from  the  public  schedules,  but  an  allow- 
ance in  accordance  with  them.* 

The  payment  of  elevator  charges  was  involved  in  a  later  ease 
in  the  circuit  court  of  appeals,  8th  circuit,  in  Union  Pacific  R. 
Co.  V.  Updyke  Grain  Co.,  178  Fed.  223  (April,  1910).  The 
tariffs  of  the  railroad  offered  compensation  for  elevation  of  grain 
in  transit  on  condition  that  cars  delivered  by  it  loaded  to  eleva- 
tors or  connecting  lines  should  be  returned  to  it  empty  within 
forty-eight  hours  after  their  delivery.  The  rules  which  governed 
the  switching  and  disposition  of  cars  provided  that  foreign  cars 
and  cars  belonging  to  the  companies,  which  had  a  direct  connec- 
tion with  the  switching  territory,  should  be  delivered  or  sent  to 
their  owners,  so  that  the  complainants,  who  were  the  oAvners  of 


•  Aff'd  (modified),  by  sup.  et.  (Nov.  1911),  32  S.  Ct  22.     Supra,  §  151. 


§    248]  THE   INTERSTATE   COMMERCE   ACT.  339 

elevators  upon  railroad  tracks  otlicr  tlian  tliose  of  the  Union  Pa- 
cific Company,  could  not  j)ossil)]y  rctuin  such  cars  of  that  com- 
pany after  they  were  unloaded,  while  Pcavey  &  Co.,  which  had  an 
elevator  on  the  tracks  of  the  Hnion  Pacific  Company,  could  de- 
liver such  cars  back  to  such  company  immediately  after  they 
were  unloaded ;  and  the  Union  Pacific  Company  paid  it  compen- 
sation for  elevating  the  grain  unloaded  from  these  cars  where 
it  refused  to  pay  the  complainants  any  compensation  for  un- 
loading cars  of  like  character.  The  court  held  that  this  course 
of  proceeding  approached  an  undue  prejudice  of  omplainants, 
who  were  awarded  damages  in  reparation;  but  where  the  delay 
in  the  return  of  the  cars  was  not  due  to  the  Union  Pacific  Com- 
pany but  to  the  companies  having  connecting  lines,  it  was  held 
that  the  complainants  were  not  entitled  to  any  damages.  In 
this  case  the  court  said  elevation  of  this  nature  is  a  part  of  trans- 
portation which  railroad  companies  are  required  to  furnish  on 
request.  They  have  the  legal  right  either  to  funish  it  themselves 
or  to  hire  others  to  provide  it.  Since  they  have  the  right  to  era- 
ploy  others  to  provide  elevation,  they  also  have  the  indispensable 
right  to  prescribe  the  terms  upon  which  they  will  make  this  em- 
ployment, provided  always  those  terms  are  neither  unjust  nor 
discriminatory. 

In  12  I.  C.  C.  Rep.  85,  the  commission  defined  elevation  as 
unloading  grain  from  cars  or  grain  carrying  vessels  into  a  grain 
elevator  and  unloading  it  out  again  after  a  period  not  to  exceed 
ten  days;  that  the  term  as  used  in  the  statute,  did  not  include 
treatment,  grading,  or  cleaning  of  the  grain,  and  that  retention 
beyond  ten  days  became  storage.  For  discussion  of  subject  of 
elevation,  see  15  I.  C.  C.  R.  90;  15  I.  C.  C.  R.  341;  16  I.  C.  C. 
R.  337. 

§  248.  Undue  preference  in  wharfage  rights. — The  jurisdic- 
tion of  the  comntission  extends  to  the  c;ise  of  a  corporation 
created  to  carry  on,  comformably  to  a  municipal  ordinance  and 
confirmatory  statute  intended  to  secure  public  shipping  facili- 
ties, a  wharfage  business  at  a  seaport,  and  to  furnish  terminal 
facilities  for  a  railroad  and  steamship  system  of  which  it  forms 
a  part,  and  by  which  it  is  controlled  through  a  holding  com- 
pany ;  and  a  lease  to  a  shipj^er  of  one  of  the  piers  and  improve- 
ments thereon  belonging  to  a  terminal  company,  which  relieves 
him  from  payment  of  all  wharfage  and  storage  charges  other 


340  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    3 

than  such  as  may  be  included  in  the  yearly  rental,  enabling  him 
to  acquire  practically  a  monopoly  of  the  export  of  cotton-seed 
products,  constitutes  an  unlawful  preference  under  the  act  to 
regulate  commerce  where  other  shippers  are  not,  and  cannot  be, 
afforded  the  facilities  on  the  same  conditions.  Southern  P.  T. 
Co,  V.  Interstate  Commerce  Commission,  219  U.  S.  -198,  55  L.  Ed. 

(1911).     This  case  was  distinguished  from  that  of  Louisville 

&  N.  R.  V.  AVest  Coast  Naval  Stores  Co.,  198  U.  S.  483,  49  L.  Ed. 
1135,  where  the  complainant  company  was  found  to  have  the 
same  privilege  of  using  the  wharves  of  the  railroad  company  as 
other  shippers  had.  It  was  also  distinguished  from  the  case  of 
Weems  S.  B.  Co.  v.  Peoples'  S.  B.  Co.,  214  U.  S.  344,  53  L.  Ed. 
1024,  where  there  were  two  independent  lines  of  steamboats 
one  claiming  the  right  to  use  the  wharves  of  the  other  on  the 
ground  that  the  wharves  had  been  dedicated  to  the  public  and 
the  fact  was  found  adversely  to  the  contention. 

§  249.  The  management  of  freight  stations  and  warehouses 
must  be  without  preference. — The  circuit  court  of  Oregon  in 
U.  S.  ex  rel.  v.  Oregon  R.  &  N.  Co.,  159  Fed.  975,  in  1908,  held 
that  while  a  railroad  could  grant  the  privilege  to  one  person  to 
erect  a  warehouse  on  its  right  of  way  and  refuse  a  like  privilege 
to  another,  yet  that  the  warehouseman  for  whom  the  orders  for 
cars  were  given,  was  the  agent  of  the  carrier,  and  the  latter  was 
bound  to  see  that  the  agent  was  guilty  of  no  negligence  or  un- 
faithful performance  of  dutj^;  and  if  the  rules  established  by 
the  management  of  the  stations  or  warehouses  operated  to 
prejudice  one 'class  of  patrons,  or  if  the  manner  of  distributing 
the  ears  subjected  the  storers  and  exporters  to  an  undue  or  un- 
reasonable prejudice  and  disadvantage  and  favored  the  ware- 
housemen who  were  also  engaged  in  the  business  of  buying  and 
exporting,  there  was  a  violation  of  the  law. 

The  hours  of  business  may  also  involve  undue  and  unreason- 
able prejudice  and  disadvantage  to  shippers.  Thus,  in  10  I.  C. 
C.  R.  378,  the  commission  ruled  that  such  a  case,  where  com- 
Ijlaint  was  made  of  a  closing  hour,  4 :30,  as  earlier  than  that  in 
competing  cities,  was  a  inatter  within  their  jurisdiction,  though 
the  exceptional  hour  was  for  the  time  justified  by  the  congestion 
of  traffic. 


§    2;'50]  THE   INTERSTATE   COMMEnCE    ACT.  341 

§  250  (189).  Unjust  preference  in  car  service. — The  provid- 
ing of  reasonable  car  facilities  for  its  patrons  is  a  common  law 
duty  of  the  carrier,  and  this  service  must  be  rendered  without 
unreasonable  discrimination  either  in  charges  or  in  the  facili- 
ties afforded.  This  common  law  duty,  which  is  enforced  in  the 
different  states  under  state  statutes  and  at  common  law,  is 
emphasized  by  and  may  be  enforced  under  tlie  provisions  of 
this  section  as  to  interstate  traffic.  Localities  as  well  as  ship- 
l)ers  may  be  prejudiced  by  the  unjust  discriminations  in  the 
supply  of  cars.  This  right  is  further  enforced  by  the  amend- 
ment of  1889,  specifically  authorizing  the  issue  of  a  writ  of  man- 
damus {infra,  section  23),  for  the  furnishing  of  cars  and  other 
facilities.  In  United  States  v.  West  Virginia  &  Northern  Rail- 
road Co.,  125  Fed.  252.  the  United  States  circuit  court  of  West 
Virginia  granted  a  mandamus  to  compel  the  carrier  to  cease 
preferences  in  the  supply  of  cars  to  certain  coal  mines.  The 
court  said  it  was  the  legal  duty  of  the  railroad  company  in  fur- 
nishing cars  to  coal  mines  along  its  line  to  distribute  the  same 
impartially  without  unjust  discrimination  or  favoritism,  and 
that  such  distribution  should  be  based  on  a  disinterested  and 
intelligent  examination  of  the  mines,  by  experts,  and  upon  a 
consideration  of  all  the  factors  which  go  to  make  up  the  capac- 
ity of  the  mines,  the  production,  the  equipment  for  the  use  for 
handling  and  loading  of  the  product  being  secondary  because 
it  could  quickly  and  easily  be  increased  to  meet  the  require- 
ments. The  distribution  of  cars  was  found  to  have  been  unduly 
preferential  to  certain  companies,  this  conclusion  being  based 
upon  an  estimate  of  the  capacity  of  the  mines  and  the  percent- 
age of  cars  allotted  to  each.  See  also  to  same  effect  United 
States  V.  Norfolk  &  Western  R.  Co.,  109  Fed.  831 ;  infra,  section 
23  of  act. 

It  was  ruled  by  the  commission,  1  I.  C.  C.  R.  594  and  1  Int. 
Com.  Rep.  787,  that  it  was  not  a  valid  excuse  for  refusal  to  fur- 
nish a  fair  allotment  of  cars  of  a  certain  class  that  they  could 
be  more  profitably  emploj'^ed  and  could  supply  the  wants  of  a 
larger  number  of  shippers  on  another  portion  of  the  line.  It 
also  ruled  that  undue  preference  of  a  locality  or  of  a  shipper 
in  the  ear  service  is  established  by  showing  that  there  is  a  con- 
siderable delay  in  furnishing  cars,  while  other  localities  or  ship- 
pers are  furnished  with  comparative  promptness.    9  I.  C.  C.  R. 


342  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    3 

207.  For  other  eases  of  discrimination  before  the  commission 
in  providing  cars  for  coal,  see  10  I.  C.  C.  E.  226 ;  10  I.  C.  C.  R. 
47.  the  commission  in  several  cases  has  awarded  reparation  in 
damages  for  discrimination  in  car  service. 

In  Harp  v.  Choctaw  &  G.  R.  Co.,  61  C.  C.  A.  405,  and  125 
Fed.  Rep.  445  (eighth  circuit),  in  1903,  it  was  held  in  a  case 
where  discrimination  in  car  service  was  claimed  in  violation  of 
the  Arkansas  statute,  that  a  carrier  transporting  large  quanti- 
ties of  coal  is  entitled  to  make  regulations  in  respect  to  the 
manner  of  receiving  and  transporting  it  so  that  it  may  be 
handled  safely,  expeditiously  and  economically  without  inter- 
ference with  the  carrier's  other  business,  and  regulations  wiiich 
are  also  designed  to  promote  such  business  cannot  be  complained 
of  on  the  ground  that  they  operate  to  give  a  preference  to  one 
who  complies  with  them  or  in  a  discrimination  against  one  who 
does  not.  The  furnishing  therefore  of  cars  to  certain  mine 
OAvners,  who,  through  agreements  with  the  company,  had  con- 
structed private  spur  tracks  to  their  mines,  while  refusing  to 
furnish  cars  for  loading  on  the  station  track  to  owners  who  had 
constructed  no  spur  track,  did  not  constitute  an  undue  prefer- 
ence either  under  the  common  law  or  the  Arkansas  statute, 
which  prohibited  the  giving  of  any  preference  in  the  furnish- 
ing of  cars.  The  court  found  that  the  volume  of  business  was 
such  that  to  permit  the  use  of  the  station  tracks  for  loading  cars 
in  that  manner  would  not  only  interfere  with  the  operation  of 
the  trains,  but  also  cause  serious  loss  and  inconvenience  to  other 
shippers  and  the  public.  It  was  lield  hj  the  state  court  under 
the  same  statute  that  there  w^as  no  undue  preference  between 
localities  when  there  were  not  enough  ears  to  supply  all.  The 
court  cited"  as  the  leading  case,  Oxlaid  v.  Northeastern  R.  Co., 
15  Common  Bench,  N.  S.  680,  construing  the  English  Canal  and 
Traffic  Act  of  1854,  upon  w^hicli  the  Interstate  Commerce  Act 
was  based.  Little  Rock  &  St.  L.  R.  Co.  v.  Oppenheimer,  44  L. 
R.  A.  353,  64  Ark.  271. 

The  commission  has  ruled  that  it  is  not  the  duty  of  a  carrier 
to  notify  the  shipper  when  he  can  obtain  cars  for  the  removal 
of  freight,  if  by  reasonable  inquiry  he  can  obtain  such  informa- 
tion himself,    i  I.  C.  C.  R.  608  and  1  Int.  Com.  Rep.  778. 

It  was  said  by  the  commission  in  another  case,  1  I.  C.  C.  R. 
374  and  1  Int.  Com.  Rep.  688,  where  damages  were  claimed  for 


§    251]  THE   INTERSTATE   COMMERCE   ACT.  343 

alleged  violation  of  tlie  act  in  llie  failure  to  furnish  cars  for 
coal  shipments,  that  tli£  inability  of  a  earier  to  furnish  cars  as 
fast  as  demanded  by  shippers  was  not  a  violation  of  the  act. 
where  the  company  had  an  adequate  freight  equipment  for 
ordinary  conditions,  but  owing  to  an  extraordinary  demand  for 
coal  cars  due  to  exceptional  conjunction  of  circumstances,  was 
unable  to  supply  them  as  fast  as  the  shippers  demanded.  Un- 
der such  circumstances,  the  company  performed  its  duty  when 
it  furnished  the  cars  ratably  and  fairly  at  the  mines  along  its 
line  in  i)roportion  of  their  freights  until  the  emergency  had 
passed.  Neither  was  a  carrier  responsible  for  the  detention  of 
ears  by  shippers  longer  than  was  necessary,  when  it  appeared 
that  the  company  did  all  in  its  power  to  enforce  the  prompt  un- 
loading of  the  cars.  See  also  as  to  carriers'  duty  in  the  matter 
of  ear  equipment,  2  I.  C.  C.  Rep.  90,  and  2  Int.  Com.  Rep.  G7. 

§  251.  The  commission's  regulations  of  coal  car  service  sus- 
tained.— The  complex  (luestions  involved  in  the  daily  distribu- 
tion of  coal  cars  in  time  of  car  shortage,  to  coal  mines  under 
the  peculiar  conditions  of  that  industry,  are  illustrated  in  the 
rulings  of  the  commission,  12  I.  C.  C.  Rep.  308;  13  I.  C.  C.  Rep. 
440,  and  13  I.  C.  C.  Rep.  451.  These  orders  were  based  upon 
the  peculiar  conditions  of  the  industry,  which  required  the 
disposition  of  the  product  as  soon  as  the  coal  was  brought  on 
the  surface,  as  it  is  impracticable  to  store  the  coal,  and  the  pro- 
duction of  the  mine  is  therefore  dependent  upon  the  quantity 
that  can  be  removed  each  day,  and  the  daily  distributions  of 
cars  are  made  to  the  mines  to  permit  their  removal  of  the  avail- 
able output  for  eacli  day.  Unforeseen  periods  necessarily  arise 
when  the  shortage  of  cars  to  meet  the  demand  takes  place  not- 
withstanding the  full  performance  by  the  carriers  of  their  duty, 
because  of  the  wide  fluctuations  of  the  demand  and  the  deten- 
tions of  the  cars  at  the  terminal  points.  These  conditions  have 
required  regulation  of  the  distribution  of  coal  cars.  This  sit- 
uation required  the  handling  of  four  classes  of  cars:  1.  System 
cars  OAvned  by  the  carriers  and  in  use  for  the  transportation  of 
the  coal.  2.  Company  fuel  cars,  used  for  coal  for  fuel  pur- 
poses of  the  carrier.  3.  Private  cars  owned  by  coal  mining 
companies,  or  shippers  or  consumers,  and  used  for  the  benefit 
of  their  owners,  and  4.  Cars  owned  by  other  railroad  compa- 


3-14  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    3 

nies  for  the  purpose  of  supplying  such  other  companies  with 
fuel.     The  commission  ordered  that  in  time  of  car  shortage, 
when  the  daily  distribution  was  made,  that  the  railroad  should 
count  against  the  mine  receiving  the  same,  company  fuel  cars, 
foreign  railway  cars  or  private  cars;  and  the  commission  re- 
quired the  railroad  to  establish  regulations  for  the  period  of 
two  years  from  July  1st,  1908,  providing  for  the  counting  of 
all  such  cars.     The  scope  of  the  order  was,  however,  modified 
by  authorizing  the  railroad  company  to  deliver  to  a  particular 
mine  the  foreign  railway  fuel  cars,  the  private  cars  and  the 
company  fuel  cars  consigned  to  such  mine,   even  though   the 
number  might  exceed  the  prorata  share  of  the  cars  attributable 
to  the  mine  when  ascertained  by  taking  into  account  all  the  cars 
which  the  order  required  to  be  considered.     Where,  however, 
the  number  of  such  cars  was  less  than  the  prorata  share  of  the 
mine,  the  order  only  permitted  the  carrier  to  add  a  sufficient 
number  of  system  cars  to  make  up  the  rightful  prorata  number. 
The  railroad  company  brought  suit  to  enjoin  this  order  of 
the  commission,  and  the  circuit  court   (Illinois)   held  that  the 
railroad  was  entitled  to  an  injunction  restraining  the  enforce- 
ment of  the!  order  of  the  commission,  in  so  far  as  it  directed  the 
taking  into  account  of  the  cars  employed  by  the  railroad  in  haul- 
ing its  own  fuel.     This  was  on  the  theory  that  these  cars  were 
not  engaged  in  commerce  as  commerce.    173  Fed.  930.    The  su- 
preme court,  Interstate  Com.  Com.  v.  Illinois  Central  Ry.  Co., 
215  U.  S.  452,  54  L.  Ed.  280  (1910),  reversed  this  decision,  hold- 
ing that  this  was  an  administrative  order  of  the  commission  with- 
in the  scope  of  the  power  delegated  by  congress;  that  commerce, 
in  the   constitutional  sense,  included  the   instrumentalities  by 
which  commerce  was  carried  on,  and  extended  to  the  coal  ears 
owned  by  the  railway  company  engaged  in  interstate  commerce, 
wherein  it  received  coal  and  used  it  solely  for  its  own  fuel  pur- 
poses; and  that  the  court  would  not  review  the  discretion  of 
such  administrative  order  of  the  commission  in  determining  that 
a  certain  distribution  for  a  term  of  two  years  was  fair  and  rea- 
sonable as  a  means  of  prohibiting  the  unjust  discrimination  for- 
bidden by  the  act. 

The  court  said  that  in  view  of  the  facts  found  by  the  com- 
mission as  to  the  preference  and  discrimination  resulted  from 
the  failure  to  count  the  company  fuel  ears  in  the  daily  distribu- 


§    251]  THE   INTERSTATE    COMMKUCE   ACT.  345 

tion  iu  times  of  car  shortage,  and  in  the  far  reaching  preference 
and  discriminations  set  forth  in  the  answer  of  the  commission, 
which  were  taken  as  true,  as  the  cause  was  submitted  on  bill 
and  answer,  the  subject  was  clearly  within  the  sweeping  pro- 
vision of  section  3  of  the  act  prohibiting  preferences  and  dis- 
criminations, and  the  order  was  within  the  comprehensive  pow- 
ers conferred  by  the  amendatory  act  of  1906.  The  divergence 
and  even  conflict  in  the  systems  of  coal  car  distribution  in  times 
of  shortage  enforced  by  the  different  railroad  systems  illustrated 
by  such  cases  as  Logan  Coal  Co.  v.  Penn.  R.  Co.,  154  Fed.  497 ; 
U.  S.  ex  rel.  Pitcairn  Coal  Co.  v.  B.  &  0.  R.  Co.,  165  Fed.  113, 
and  cases  therein  cited,  and  also  Majestic  Coal  &  Coke  Co.  v. 
111.  Cent.  R.  Co.,  162  Fed.  810;  and  divergence  of  the  systems 
illustrated  a  complexity  of  the  subject  which  required  and  justi- 
fied the  broad  discretion  imposed  in  the  Interstate  Commerce 
Commission  to  make  the  uniform  rulings  required  to  prevent 
preferences  and  discriminations  in  the  commerce  of  the  country. 

Subsequently  to  this  decision  of  the  supreme  court  in  1910  the 
system  of  coal  car  distribution  practiced  on  the  Pennsylvania 
railroad  was  condemned  by  the  commission,  see  19  I.  C.  C.  R. 
356,  and  the  commission  adhering  to  its  previous  ruling  that 
the  owner  of  private  cars  was  entitled  to  their  exclusive  use  and 
that  foreign  railway  fuel  ears  assigned  to  a  particular  mine, 
again  ruled  that  all  such  cars  must  be  counted  against  the  dis- 
tributory  share  of  the  mine  receiving  them  and  that  the  defend- 
ant 's  rule  providing  that  the  capacity  in  tons  of  such  ' '  assigned ' ' 
cars  shall  be  deducted  from  the  rated  capacity  of  the  mine  receiv- 
ing them,  and  th.at  the  remainder  was  to  be  regarded  as  the 
rated  capacity  of  the  mine  in  the  distribution  "assigned"  cars 
was  unlawful  and  discriminatory.  The  commission  said  that 
the  law  not  only  gave  the  shipper  a  right  to  an  equal  or  a  justly 
ratable  use  of  the  facilities  of  an  interstate  carrier,  but  the  as- 
surance that  no  other  shipper  shall  fare  ratably  better  at  the 
hands  of  the  carrier.  The  utmost  obligation  of  the  carrier  un- 
der the  law  was  to  equip  itself  with  sutBcient  cars  to  meet  the 
requirements  of  a  mine  for  actual  shipment.  See  also  20  I.  C. 
C.  R.  52. 

In  these  cases  there  was  a  difference  of  opinion  in  the  com- 
mission not  only  on  the  power  to  award  damages  to  a  complain- 
ant, see  infra,  §  387,  but  also  on  the  method  of  rating  lines.     The 


346  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    3 

minority  contended  that  the  physical  capacity  of  the  mine  was 
the  only  proper  basis  for  car  distribution,  while  the  majority 
adopted  the  rule  of  considering  not  only  physical  capacity  but 
the  commercial  output. 

§  252.  Discrimination  by  carrier  in  its  own  favor. — As  the 
carrier  may  not  discriminate  in  favor  of  itself  in  violation  of 
section  2  when  it  is  both  a  carrier  and  a  shipper,  so  it  may  not 
discriminate  by  the  unjust  preference  in  certain  localities  by 
the  same  means,  see  svpra,  section  2.  Such  a  preference  was  in- 
volved in  the  matter  of  coal  car  distribution  considered  in  the 
preceding  section ;  and  it  was  upon  the  ground  that  the  supreme 
court  would  not  interfere  with  the  administrative  order  of  the 
eonunission  made  for  the  purpose  of  securing  equality  and  pre- 
venting an  undue  preference,  that  the  system  of  car  distribu- 
tion sustained  in  that  case  was  enforced. 

In  Commission  v.  Chesapeake  &  Ohio  R.  R.  Co.,  sirpra,  a  con- 
tract by  a  carrier  for  the  delivery  of  the  coal  belonging  to  the 
first  at  a  fixed  price  was  held  to  operate  to  give  the  purchaser 
an  undue  preference  in  violation  of  section  3,  and  the  contract 
was  therefore  illegal  and  unreasonable,  and  its  further  perform- 
ance was  enjoined.     See  supra,  section  2. 

It  was  held  by  the  supreme  court  in  the  Illinois  Central  Coal 
Car  Distribution  Case,  supra,  §  251,  that  a  railroad  com- 
pany is  not  at  fault  for  failure  to  deliver  all  the  coal  cars 
called  for  in  times  of  shortage,  if  the  equipment  of  the  coal 
cars  was  reasonably  adequate  to  meet  all  normal  conditions,  al- 
though it  became  insuificient  at  times  because  of  extraordinary 
circumstances  against  which  it  was  in  reason  impossible  to  pro- 
vide. 

§  253.  Undue  preference  in  private  cars.— -The  subject  of  the 
use  of  private  cars  and  their  abuse  in  causing  undue  preference 
has  been  the  subject  of  frequent  discussion  by  the  commission, 
both  in  its  decisions  and  reports.  The  act  has  been  amended, 
see  section  1,  supra,  in  accordance  with  the  recommendations 
of  the  commission,  so  that  the  private  cars  by  whomsoever  owned, 
used  in  transportation  and  refrigeration,  and  all  the  facilities 
of  transportation  used  in  interstate  commerce,  are  under  the: 


§    253]  i'lll^    INTERSTATE    COMMERCE    ACT.  347 

control  and  regulation  of  the  cominission.  AYliile  the  owner  of 
the  private  cars  is  thus  under  the  control  of  tlie  coniiuissiou, 
the  carrier  is  none  the  less  responsible  for  all  the  necessary  in- 
cidents of  transi)ortation  and  is  bound  to  furnish  them  to  all 
without  discrimination  and  without  undue  preference. 

In  9  I.  C.  C.  Rep.  1 ,  the  commission  said  that  the  carrier  could 
refuse  to  haul  private  cars  at  all,  or  to  only  haul  those  of  a  cer- 
tain class  and  refuse  to  haul  others  of  a  little  different  or  sub- 
stantially different  class.  In  this  case  the  private  car  was  that 
of  a  commercial  Scdesman  and  was  stocked  with  his  samples  of 
men's  clothing  and  furnishings.  The  commission  said  that  in 
comparison  with  the  private  car  services  rendered  for  pleasure 
journeys  and  theatrical  companies,  the  service  was  so  different 
and  unusual  as  to  justify  a  greater  compensation,  or  even  the 
refusal  of  the  car  altogether. 

As  to  tank  cars,  which  have  been  the  subject  of  frequent  dis- 
cussion in  the  decisions  of  the  commission,  see  -t  I.  C.  C.  Rep. 
131,  and  3  Int.  Com.  Rep.  162,  the  commission  said  it  was  the 
carrier's  duty  to  equip  its  road  with  the  instrumentalities  of 
carriage  suitable  to  the  traffic,  and  to  furnish  them  alike  to 
all,  and  its  duty  to  furnish  equipment  could  not  be  transferred 
to  nor  acquired  by  shippers.  "Where  it  accepted  and  used  cars 
owned  by  ship]:)ers  and  others,  in  legal  contemplation,  it  adopted 
them  as  its  own  for  the  purpose  of  rates  and  carriage.  The  car- 
rier could  not  by  any  device,  such  as  the  payment  of  unreason- 
able rent,  avoid  the  duly  of  equal  charges  for  equal  service.  See 
also  1  I.  C.  C.  Rep.  503,  and  1  Int.  Com.  Rep.  722 ;  6  I.  C.  C. 
Rep.  295. 

The  carrier,  however,  has  the  i-ight  to  fix  its  rates  according 
to  the  cost  of  the  service  rendered,  as  between  the  transporta- 
tion in  tank  cars  and  barrels.  See  Penn.  Refining  Co.  v.  W.  N.  Y. 
&  P.  R.  Co.,  supra. 

It  was  said  also  by  Judge  Cooley  in  an  early  ease.  1  I.  C.  C. 
Rep.  503,  and  1  Int.  Com.  Rep.  722,  that  it  is  properly  the  busi- 
ness of  the  carrier  to  supply  the  rolling  stock  for  the  freights 
it  offers  and  purposes  to  carry,  and  that  if  the  diversity  and 
peculiarities  of  traffic  are  such  tliat  this  is  not  practical,  the 
consignors  must  supply  it  themselves,  and  that  the  carrier  must 
not  allow  his  own  deficiencies  in  this  particular  to  be  the  means 


348  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    3 

of  eomipetiiig  to  the  disadvantage  of  those  who  make  use  of  the 
traffic  and  the  facilities  it  supplies,  citing  Railroad  Co.  v.  Pratt, 
22  Wall.  123,  22  L.  Ed.  827  (1875). 

Tliis  subject  was  discussed  by  the  commission  in  the  Califor- 
nia Fruit  Case,  9  I.  C.  C.  Rep.  182,  where  it  is  said  that  it  must 
be  conceded  that  the  leasing  of  equipment  by  carriers  of  refrig- 
erator cars,  afforded  opportunities  for  unfair  advantage,  but  that 
carriers  were  allowed  by  the  law  to  procure  equipment  for  busi- 
ness by  lease  as  well  as  by  purchase,  and  they  were  not  pro- 
hibited from  leasing  from  a  shipper,  nor  are  they  compelled  to 
lease  from  all  shippers  because  they  do  from  one.  As  to  the 
reasonableness  of  charges  for  private  cars  and  for  refrigeration, 
see  §  154  et  seq.,  supra;  and  as  to  unjust  discrimination  upon 
shippers  in  connection  therewith,  see  §  210,  supra.  See  also  ex- 
tended discussion  of  the  subject  of  private  cars  by  the  commis- 
sion in  its  annual  deport  for  1904,  prior,  however,  to  the  amend- 
ment of  the  act,  placing  such  cars  under  the  jurisdiction  of  the 
commission. 

§  254.  Demurrage  and  other  charges  on  privately  owned 
cars. — The  commission  has  ruled  upon  the  subject  of  privately 
owned  cars,  13  I.  C.  C.  Rep.  378,  that  where  the  cars  are  owned 
by  shippers  and  hired  by  the  carriers  on  a  mileage  basis,  they 
are  subject  to  demurrage  when  such  cars  stand  upon  the  tracks 
of  the  carrier,  either  at  the  point  of  origin  or  at  the  point  of 
destination,  but  are  not  so  subject  when  upon  either  the  private 
track  of  the  owner  of  the  car,  or  the  private  track  of  the  con- 
signee. The  carrier  must  charge  demurrage  in  all  cases  where 
demurrage  is  imposed  by  tariff  provision  upon  its  own  equip- 
ment, except  where  the  privately  owned  car  is  upon  the  pri- 
vately owned  siding  or  track  and  the  carrier  is  paying  or  is  re- 
sponsible for  no  rental  or  other  charge  upon  such  ear.  The 
privately  owned  car,  in  the  sense  in  which  that  expression  is 
used,  is  the  car  owned  by  an  individual  firm  or  corporation  for 
the  transportation  cf  the  commodities  which  they  produce  or 
in  which  they  deal. 

§  255.  The  commerce  court  on  demurrage  charges  upon  pri- 
vate cars. — In  Procter  and  Gamble  Co.  v.  United  States  et  al., 
the  United  States  commerce  court  (July  20,  1911)  affirmed  the 


§    257J  THE    INTERSTATE    CO-M.MKKCE    ACT.  349 

order  of  the  commission  dismissing  tlie  complaint  of  the  peti- 
tioner seeking  to  set  aside  the  order  of  the  commission  whicli 
had  refused  to  dechire  illegal  exaction  of  demurrage  charges 
made  by  a  railroad  company  against  the  private  cars  of  the 
company  after  they  had  been  delivered  to  the  company  and  were 
standing  on  its  private  tracks.  The  court  said  it  was  not  neces- 
sary to  decide  whether  the  railroad  could  refuse  or  be  required 
to  haul  private  cars.  Whatever  may  be  its  duty  in  that  regard, 
sucii  terms  can  be  imposed  as  a  condition  of  hauling  them  as 
have  a  reasonable  relation  to  the  service  in  which  they  are  em- 
ployed. The  railroads  were  entitled  to  require  that  there  should 
be  a  reasonably  dei)endent  supply  and  tluit  the  cars  should  not 
be  withdrawn  at  will  to  serve  the  private  purposes  of  the  owner, 
but  should  be  kept  in  active  and  steady  use,  and  to  that  end 
that  they  should  be  on  a  footing  in  this  respect  with  other  cars. 
The  purpose  of  the  demurrage  was  to  force  the  cars  back  into 
use,  and  delay  was  made  expensive  so  that  it  might  be  made  an 
object  to  the  shipper  which  could  not  afford  to  disregard. 
The  exaction  of  demurrage  from  private  cars  the  same  as  others 
was  therefore  neither  arbitrary  nor  unjust  nor  violative  of  the 
owner's  rights. 

§  256  (192).  Exclusive  use  of  excursion  or  sleeping  cars  of 
one  owner. — The  same  principle  applies  in  cases  of  special 
classes  of  cars,  such  as  excursion  and  sleeping  cars  for  passen- 
gers. A  railroad  company  may  acquire  cars  of  any  class,  by 
construction,  by  purchase,  or  by  contract  for  their  use,  and  no 
one  can  compel  a  railroad  company  to  select  among  these  sev- 
eral modes  or  to  contract  with  all  carriers.  This  principle  was 
applied  by  the  commission  in  3  I.  C.  C.  E.  577,  and  2  Int.  Com. 
Kep.  792,  in  ruling  that  it  was  not  unjustly  preferential  for  a 
railroad  company  to  refuse  to  haul  the  excursion  cars  of  one 
car  company,  when  it  had  a  sufficient  supply  of  excursion  cars 
for  its  business  from  other  company  with  whom  it  had  con- 
tracted. 

§  257  (193).  Leasing  of  cars  does  not  carry  right  of  exclu- 
sive use  by  ov^^ner. — It  is  the  duty  of  a  carrier  to  equip  its  road 
with  the  means  of  transportation,  and  in  the  absence  of  excep- 
tional conditions  those  means  must  be  open  impartially  to  all 
shippers  of  like  traffic. 


350  THE    INTERSTATE    COMMERCE    ACT.  [SECTION   3 

The  commission  said  in  one  of  the  numerous  tank  line  cases. 
5  I.  C.  C.  R.  415,  4  Int.  Com.  Rep.  162,  that  ownership  of  a 
car  rented  to  a  carrier  for  a  full  consideration  did  not  of  itself 
entitle  the  owner  to  the  exclusive  use  of  such  car,  and  if  he 
could  stipulate  for  such  use,  it  must  be  upon  such  terms  as  shall 
not  constitute  an  unjust  discrimination  against  shippers  of  like 
traffic  excluded  from  use  of  the  car.  Where  a  carrier  pays  mile- 
age for  a  car  which  it  employs  in  the  service  of  the  shipper,  it 
is  the  carrier  and  not  the  party  or  company  from  whom  the  car 
is  rented  who  furnished  the  car  to  the  shipper,  and  in  such  ease 
there  is  no  privity  of  the  contract  between  the  car  ow^ner  and 
the  shipper.    6  I.  C.  C.  R.  295. 

§  258  (194).  Stoppage  in  transit  privileges. — The  privilege 
of  stoppage  in  transit,  including  the  right  of  milling  grain  in 
transit  or  of  compressing  cotton,  which  the  commission  sustained 
as  a  legitimate  privilege  extended  by  carriers,  must  not  be 
so  extended  as  to  operate  as  an  undue  preference  to  localities  or 
unjust  discrimination  between  individuals.    See  supra,  section  2. 

The  commission  said  in  9  I.  C.  C.  R.  373,  that  if  stop-over 
privileges  are  granted  for  any  purpose,  all  the  facts  and  cir- 
cumstances connected  therewith  should  be  clearly  stated  in 
the  published  tariff  so  that  the  public  generally  may  enjoy  the 
benefits.  In  this  case  the  grain  was  shipped  through  St.  Louis 
with  stop-over  privilege  in  East  St.  Louis  for  cleaning,  sack- 
ing, or  any  other  purpose,  the  shipment  afterwards  carrying 
the  proportional  or  balance  of  through  rate  from  East  St. 
Louis.  The  commission  in  this  case,  how^ever,  condemned  the 
practice  of  shipping  to  East  St.  Louis  on  a  local  rate  for  the 
purpose  of' "trying  the  market,"  and  then  shipping  on  a  re- 
duced proportional  rate  to  a  southern  point.  See  also  7  I.  C. 
C.  R.  240,  where  a  similar  practice  was  condemned. 

In  the  lumber  "Tap-line"  case,  10  I.  C.  C.  R.  193  (supra, 
§  163),  the  commission  said  that  it  might  be  urged  with  force  that 
practices  of  this  kind  were  not  sanctioned  by  the  act,  and 
that  it  had  intimated  that  view  in  1  I.  C.  C.  R.  401,  1  Int. 
Com.  Rep.  703.  The  practice  had  become  so  general  that  vast 
amounts  had  been  invested  in  industrial  plants  upon  the  faith 
of  the  continuance  of  these  privileges;  and  no  doubt  their 
allowance  had  cheapened  the  cost  of  transportation  and  prob- 


§    260]  THE   INTERSTATE    COM  MKIUK    ACT.  -J51 

ably  of  inamiffifiture.  T'lie  commission  concluded  that  when 
once  the  principle  of  milling  in  transit  was  admitted  it  could 
be  a[)pliod  to  the  manufacture  of  logs  into  lumber.  See  supra, 
§§  216,  217. 

In  1  I.  C.  C.  K.  401  and  1  Int.  Com.  Rep.  703,  the  commis- 
sion ruled  that  the  ]^rivilege  of  sto{)page  in  transit  should  not 
be  extended  so  as  to  give  to  the  merchants  of  a  town  the 
privilege  of  shipping  their  goods  from  the  point  of  purchase  to 
their  own  locality,  and  thence  to  the  place  where  the  goods 
may  be  sold  by  them  at  the  same  rate  at  which  they  would 
have  been  charged  if  there  had  been  l)ut  one  shipment  from  the 
point  of  purchase  to  the  point  of  final  delivery. 

§  259.  Reconsignment  charges. — In  the  ease  of  Southern 
Railway  Company  v.  St.  Louis  Hay  &  Grain  Co.,  214  U.  S.  297, 
53  L.  Ed.  1004  (1909),  the  supreme  court  reversed  the  circuit 
court  of  appeals  of  the  7th  circuit  in  153  Fed.  728,  and  the  cir- 
cuit court  for  the  eastern  district  of  Illinois,  149  Fed.  649,  which 
had  rendered  judgment  in  favor  of  the  company  for  the  amount 
awarded  by  the  commission  and  an  attorney's  fee  for  an  alleged 
unreasonable  and  excessive  charge  for  permitting  a  reconsign- 
ment of  hay  at  East  St.  Louis.  The  company  bought  hay  and 
had  it  shipped  to  East  St.  Louis  and  there  unloaded  and  in- 
spected, and  reloaded  for  southern  markets.  Taking  the  re- 
loaded cars  therefrom  involved  the  use  of  the  cars  for  a  time, 
and  there  was  some  expense  for  hauling  the  ears;  and  the  rail- 
road company  charged  from  four  to  five  dollars  a  car,  equivalent 
to  two  cents  per  hundred  pounds.  The  commission  ruled  that  this 
was  an  unreasonable  charge  and  allowed  only  half  the  amount. 
11  I.  C.  C.  R.  90,  and  for  this  the  circuit  court  gave  judgment 
which  was  affirmed  by  the  court  of  appeals.  The  supreme  court 
reversed  this  judgment  and  ordered  the  case  remanded  to  the 
Commerce  Commission  for  further  investigation  and  report. 
The  court  said  the  railroad  was  not  limited  to  the  actual  cost  of 
the  privilege ;  that  it  had  the  right  to  make  a  reasonable  profit. 
See  also  11  I.  C.  C.  R.  486,  where  the  commission  dismissed  a 
somewhat  similar  complaint. 

§  260.  Transit  privileges. — AVliore  a  railroad  allows  the  com- 
])ression  of  cotton  in  transit  at  the  nearest  point,  the  commission 


352  THE    INTERSTATE    COMMERCE    ACT.  [SECTION   S 

held,  12  1.  C.  C.  E.  312.  that  it  cannot  varj-  that  rule  so  as  to  give 
certain  shippers  the  opportunity  to  avoid  it  and  thereby  receive 
an  advantage  wMch  is  not  given  to  shippers  generally. 

As  to  compression  of  cotton  in  transit,  see  also  12  I.  C.  C. 
Rep.  312;  13  I.  C.  C.  Rep.  187;  and  for  adjustment  of  rates  on 
compressed  and  uncompressed  cotton,  see  15  I.  C.  C.  Rep.  222; 
16  I.  C.  C.  Rep.  131;  17  I.  C.  C.  Rep.  12. 

It  vras  argned  before  the  commission  that  it  was  without 
power  to  direct  a  carrier  to  grant  a  transit  privilege.  But  the 
commission  answered,  16  1.  C.  C.  Rep.  232,  that  there  could  be 
no  question  as  to  the  right  and  power  of  the  commission  to  order 
the  removal  of  an  unjust  discrimination  and  to  prescribe  such 
reasonable  rates  and  regulations  as  would  afford  such  removal; 
see  also  15  I.  C.  C.  Rep.  138. 

The  same  principle  was  applied  in  12  I.  C.  C.  Rep.  210,  where 
it  was  held  that  the  privilege  of  stopping  hogs  in  transit,  shipped 
from  western  points  to  the  east  in  order  that  they  could  be 
sorted  and  re-consigned  under  a  through  rate  from  point  of 
origin,  could  not  be  enforced  against  carriers  in  favor  of  any 
specific  point  or  shipper,  in  the  absence  of  lawfully  established 
tariffs  making  such  privileges  open  to  the  public.  "While  the 
commission  has  conceded  what  could  be  said  in  favor  of  milling 
and  manufacturing  in  transit,  it  has  also  commented  upon  the 
irregular  and  discriminatory  practices  that  are  invited  and  pos- 
sible under  the  practices.    See  16  I.  C.  C.  Rep.  232. 

§  261  (195).  Interference  by  state  railroad  commission  with 
proportional  tariff  rates. — The  term  ''proportional  tariffs"  has 
been  given  to  freight  rates  applying  upon  shipments  with  stop- 
page in  transit  privileges,  that  is,  where  the  commodities  shipped 
originate  beyond  the  place  of  shipment,  when  their  ultimate 
destination  is  beyond  the  point  to  which  the  proportional  rates 
apply.  In  a  recent  Texas  case,  it  appeared  that  the  State  Rail- 
road Commission  had  issued  an  order  that  the  Chicago,  Rock 
Island  &  Texas  railroad  company  should  cancel  all  its  so-called 
proportional  tariffs  on  grain  products  from  and  to  points  reached 
by  its  railway,  whether  local  or  in  connection  with  any  other 
lines  of  railroad.  A  bill  was  filed  by  the  owner  of  a  grain  elevator 
at  Fort  Worth  engaged  in  the  purchase  of  grain  from  the  country 
north  of  Texas  for  the  purpose  of  shipment  by  export  from  the 


§    2G2J  TUE   INTERSTATH    COMMEKIK    A(   1  .  353 

Gulf  ports,  allet,dng  that  these  jji-oportional  local  tariffs  had  been 
filed  with  the  Interstate  Commerce  Commission  and  relate  wholly 
to  interstate  traffic.  The  court  held  that  the  order  of  the  state 
railroad  commission  was  illegal  and  void,  that  it  had  no  jurisdic- 
tion or  control  over  the  proportional  tariff  rates  in  question ;  and 
a  temporary  injunction  was  issued  against  the  enforcement  of 
the  order  so  far  as  the  commission  was  concerned ;  the  court  de- 
clining to  grant  any  injunction  against  the  railroad  company,  on 
the  gi-ound  that  it  was  fully  able  to  respond  in  damages  for  any 
failure  to  carry  out  its  contract.  Rosenbaum  Grain  Co.  v.  C.  R. 
&  T.  R.  Co.,  130  Fed.  4G.  The  order  granting  the  tempor- 
ary injunction  was  affirmed  in  circuit  court  of  appeals.  130  Fed. 
Rep.  110. 

§  262  (196).  Sidetracks  and  connections. — Another  form  of 
leged  preference  has  grown  out  of  the  practice  of  building  sidings 
and  spurs  for  connecting  the  main  track  of  a  railroad  with  in- 
dustrial enterprises,  such  as  mills,  furnaces  and  elevators. 

The  amendment  of  the  act  in  1006  has  given  the  commission 
the  power,  upon  the  application  of  a  shipper,  or  a  branch  rail- 
road, to  order  the  making  of  a  switch  connection.  As  to  the  rul- 
ings of  the  commission  thereunder,  see  supra,  §  158. 

Some  states,  as  South  Dakota  (R.  S.  So.  Dakota,  1899,  sec- 
tion 253),  and  Nebraska  (Laws  of  1887,  Ch.  60),  have  made  a 
statutory  provision  for  such  connections.  The  statute  of  the 
latter  state  was  construed  as  authorizing  the  state  railroad  com- 
mission to  require  the  railroad  company  to  grant  the  right  to 
erect  an  elevator  upon  the  right  of  way  at  a  specified  point  on 
the  same  terms  and  conditions  which  it  had  already  granted  to 
other  persons  the  right  to  erect  elevators  tliereat.  The  supreme 
court  held  in  Missouri  Pacific  Railway  Co.  v.  Nebraska,  164  U.  S. 
403,  41  L.  Ed.  489  (1896),  that  this  Nebraska  statute  so  construed 
as  requiring  a  railroad  <;ompany  to  grant  to  the  petitioners  a  right 
to  build  and  maintain  a  permanent  structure  on  their  right  of 
waj'  was  a  taking  by  the  state  of  the  privat'^  property  without 
the  owner's  consent  for  private  use,  and  was  violative  of  due 
process  of  law  and  the  fourteenth  amendment.  The  court  how- 
ever limited  its  decision  to  this  point,  and  said  that  the  question 
of  the  power  of  the  legislature  to  compel  the  railroad  company 
to  erect  and  maintain  an  elevator  for  the  use  of  the  public,  or  to 


354  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    3 

compel  it  to  permit  all  persons  to  enjoj'  equal  facilities  of  access 
from  their  own  lands  to  its  tracks  for  the  purpose  of  shipping 
or  receiving  gi-aiu  or  otlier  freight  was  not  involved,  as  the  order 
of  the  commission  was  not  limited  to  the  temporary  use  of  the 
tracks  nor  to  the  conduct  of  the  business  of  the  railwaj"  company. 

In  Illinois,  railroads  were  required  by  "the  state  constitution, 
article  13.  section  5,  to  permit  connections  to  be  made  to  their 
tracks  so  that  any  consignee  of  grain  in  bulk  and  any  public 
warehouse,  coal  bank  or  coal  yard  may  be  reached  by  the  cars 
on  the  railroad.  In  Chicago,  etc.,  R.  Co.  v.  Suffern,  129  111. 
274,  it  was  held  that  a  railroad  company  was  not  justified  in 
refusing  to  ship  coal  over  its  own  railroad  off  of  a  switch  road 
to  the  shipper's  mine  simply  because  the  shipper  also  shipped 
on  another  carrier's  line. 

The  question  was  considered  in  one  of  the  Louisville  Stockyard 
cases.  Butchers  &  Drovers  Stockyard  Co.  v.  Railroad  Co.,  14 
C.  C.  A.  290,  1."  c.  p.  297,  67  Fed.  35,  whether  it  was  a 
discrimination  which  could  be  controlled  or  restrained  by  the 
courts  for  a  railroad  company  to  refuse  to  furnish  a  sidetrack 
or  not  to  its  customers  and  furnish  such  accommodations  to  an- 
other similarly  situated.  The  court  said  in  an  opinion  by  Jus- 
tice Taft  that  this  question  was  very  difficult,  both  at  common 
law  and  ,under  the  statute.  It  was  held  however  not  to  be 
involved  in  the  case  before  the  court,  as  there  was  such  a  dif- 
ference between  the  business  of  the  complainant  and  that  of 
the  other  abutters  upon  the  spur  track  as  to  make  the  re- 
fusal of  the  company  to  grant  the  sidetrack  to  the  complainant 
entirely  reasonable,  this  differenece  consisting  of  the  fact  that 
the  complainants'  traffic  was  live  stock  and  that  of  the  other 
abutters  dead  freight,  making  the  conditions  of  deliveries  and 
shipments  entirely  distinct. 

In  Harp  v.  C.  0.  &  G.  R.  Co.  (Ark.),  118  Fed.  169,  the 
court  held  that  a  railroad  was  under  no  obligation  to  build  a 
spur  track  to  coal  mines  for  private  benefit  of  the  owner,  nor 
was  it  liable  for  damages  for  unlawful  discrimination  because 
of  refusal  to  build  such  track,  although  it  had  assisted  and  per- 
mitted other  spurs  to  be  built.  The  judgment  was  affirmed  in 
the  circuit  court  of  appeals,  but  on  another  ground.  61  C.  C. 
A.  405,  ]  25  Fed.  445. 

This  decision  was.  approved  and  followed  in  Robinson  v.  B. 


§    263]  THE   INTERSTATE    COMMERCE    ACT.  355 

&  0.  Railroad  Co.,  ]29  Fed.  7.33,  wlicre  it  was  lield  that 
the  carrier  in  his  right  to  make  reasonable  regidations  for  the 
delivery  of  freight  was  not  eoiiipcllcd  to  r<!(eiv(;  coal  at  a  siding 
where  merchandise  other  tlian  coal  was  received,  merely  be- 
cause tlie  place  was  more  acceptal)le  to  a  shipper,  when  it  had 
designated  the  siding  lor  receiving  coal  and  the  siding  was  not 
an  unreasonable  place. 

In  anotlier  stockyards  case,  that  of  the  Interstate  Stockyards 
Co.  V.  Railroad  Company,  99  Fed.  473,  the  court  laid  down 
the  general  proposition  tliat  a  "common  carrier  of  inter- 
state freight  cannot  lawfully  deny  switch  connection  and  serv- 
ice to  one  person,  place  or  locality,  or  kind  of  traffic,  which  it 
affords  to  otliers  similarl\-  situated."  Tliis  question  however 
must  be  construed  in  connection  with  the  special  facts  of  the 
case,  the  alleged  discrimination  being  by  a  city  belt  line  which 
was  required  under  the  city  ordinance  and  state  statute  to  grant 
switch  connections  to  all  persons  and  to  render  service  in  re- 
spect to  all  freight  upon  equal  and  impartial  terms.  This  road 
was  enjoined  from  discontinuing  the  receipt  of  live  stock  from 
from  sidings  which  had  been  theretofore  constructed  and  main- 
tained. 

Assuming  tliat  there  can  be  no  unjust  preference  in  the  re- 
fusal of  switch  connections  unless  the  circumstances  and  con- 
ditions are  similar,  it  is  difficult  to  see  how  in  any  case  the  court 
can  compel  a  carrier  to  con.struct  and  maintain  such  a  siding 
for  private  use  in  its  own  right  of  way  at  its  own  expense.  Ne- 
braska V.  Missouri  Pacific  Ry.  Co.,  supra.  There  seems  to  be 
no  case  where  either  the  commission  or  the  court  has  enforced 
the  construction  and  maintenance  of  such  switch  connections. 
See  7  I.  C.  C.  R.  194,  where  such  an  application  was  unsuccess- 
fully made.  The  carrier  is  not  bound  in  every  instance  to 
furnish  under  legal  compulsion  the  same  terminal  faciliti.es  for 
all  descriptions  of  traffic.  It  is  sufficient  if  reasonable  provi- 
sion is  made  in  this  legard,  and  what  is  reasonable  in  a  given 
instance  depends  largely  upon  the  conditions  and  surroundings 
of  a  particular  locality.    See  9  I.  C.  C.  R.  61. 

§  263  (197).  Undue  preference  in  denying  shippers  the 
choice  of  route. — Another  form  of  undue  preference  condemned 
by  the  connnission  is  tJie  practice  of  initial  carriers  in  joint  con- 


356  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    3 

tinuous  routes  of  reserving  to  themselves  the  exclusive  control 
of  the  routing  of  freight,  and  denying  to  shippers  any  choice 
or  control  in  the  selection  as  between  different  established 
routes,  the  route  being  determined  by  the  carrier's  agents  ac- 
cording as  they  may  desire  to  distribute  the  shippers'  business 
among  one  another  from  time  to  time  or  for  any  reason  what- 
ever. The  commission  ruled  in  the  California  Fruit  case,  9  I. 
C.  C.  R.  182,  that  this  practice  was  in  violation  of  the  statute, 
subjecting  the  shippers  to  undue  and  unreasonable  prejudice 
and  giving  the  carriers  undue  and  unreasonable  preference 
and  advantage.  See  also  3  I.  C.  C.  R.  658,  3  Int.  Com.  Rep.  33. 
The  United  States  circuit  court  for  the  southern  district  of 
California,  in  123  Fed.  597,  and  132  Fed.  829,  sustained  this 
view  and  ordered  the  enforcement  of  the  order  of  the  commission, 
and  held  that  the  agreement  betAveen  the  carriers  constituted  a 
traffic  pool,  violative  of  sec.  5  of  the  act.  But  this  judgment 
was  reversed  by  the  supreme  court.  Southern  Pacific  Co.  et  al.  v. 
Interstate  Commerce  Commission,  200  U.  S.  536,  50  L.  Ed.  585 
(1906).  The  court  said  that  the  rule  of  the  carriers  where  the  . 
right  of  routing  beyond  its  own  terminal  was  reserved  to  the  ini- 
tial carrier  as  a  condition  for  guaranteeing  through  rates  to  the 
shipper,  was  not  violative  of  sec.  3  or  sees.  5  or  6  of  the  Interstate 
Commerce  Act ;  that  the  rule  was  intended  to  break  up  rebating 
and  that  there  was  nothing  in  the  act  which  prevented  the  car- 
riers from  agreeing  upon  a  routing  of  the  freight. 

§  264  (198).  Undue  preference  in  arbitrary  division  of  ter- 
ritory.— Another  practice  condemned  by  the  commission  as  vio- 
lative of  the  rights  of  shippers  in  creating  undue  preference 
was  the  arbitrary  division  of  territory  under  the  agreement  of 
the  Southern  Railway  and  Steamship  Association,  6  I.  C.  C. 
R.  195,  whereunder  the  commission  found  that  the  rates  on 
traffic  of  certain  classes  Avere  made  higher  from  Chicago  and 
Cincinnati  to  southern  territory  than  they  otherwise  would  be, 
for  the  purpose  of  securing  to  the  lines  from  the  northeastern 
cities,  ti'ansportation  of  that  traffic  from  the  territory  set  apart 
to  them,  under  the  agreement,  and  that  this  raised  the  pre- 
sumption of  the  unreasonableness  of  the  rates  in  such  territory. 
The  commission  found  that  this  division  of  territory  was  with- 
out warrant  in  law  and  to  have  been  made  for  the  benefit  of 


§    265]  THE   INTERSTATE   COMMERCE   ACT.  357 

carriers  without  regard  to  the  interests  of  shippers  in  the  ter- 
ritory, to  whom  it  was  in  effect  a  denial  of  the  privilege  of 
shipping  their  goods  to  market  by  the  line  or  route  they  may 
prefer.  See  also  8  I.  C.  C.  R.  185,  wherein  the  commission 
made  a  report  on  the  export  rates  froin  ]ioints  east  and  west 
of  the  Mississippi  river,  and  said  that  it  was  neither  sound  in 
principle  or  equitable  in  practice  for  railroad  lines  to  create 
artificial  differential  in  the  rates,  whereby  the  product  of  one 
section  is  assigned  to  one  market  and  the  product  of  another 
section  assigned  to  another  market. 

§  265  (199).  Rate  wars  and  undue  preferences. — The  rela- 
tion of  rate  wars  to  the  reasonableness  of  rates  was  considered 
under  section  1,  supra,  §  191.  2  I.  C.  C.  E.  231  and  2  Int.  Com. 
Rep.  137.  In  the  rate  war  prevailing  in  the  southern  freight 
traffic  in  June  and  July,  189-1,  great  disparities  in  rates  were  sud- 
denly produced  at  intermediate  points  by  the  large  reduction 
in  rates  to  Knoxville  at  the  commencement  of  this  war.  See  6 
I.  C.  C.  R.  632.  The  commission  made  an  inquiry  of  its  own 
motion.  7  I.  C.  C.  R.  377;  see  also  eighth  annual  report  of  the 
commission,  1894,  pp.  20  to  24.  The  commission  held  that  the 
maintenance  of  the  usual  rates  to  intervening  points  during 
the  period  of  such  reduced  rates  to  the  terminal  points  was  an 
unwarranted  discrimination  and  entitled  the  shippers  from  in- 
termediate points  to  reparation  for  the  excess  paid  by  ther^ 
duing  such  rate  war.  On  the  subject  of  passenger  rates  and 
rate  wars,  see  also  2  I.  C.  C.  R.  543  and  2  Int.  Com.  Rep.  340. 

These  decisions  of  the  commission  were  rendered  especially 
in  view  of  the  long  and  short  haul  requirement  of  section  4, 
and  prior  to  the  ruling  of  the  supreme  court  that  railroad 
competition  created  a  dissimilarity  of  conditions  within  the 
meaning  of  the  section.  The  ruling  however  of  the  supreme 
court  that  the  competitive  rate  must  be  remunerative  (see 
supra,  §  230.  would  of  itself  prevent  the  extreme  reductions 
condemned  by  the  commission. 

As  to  undue  preference  and  discrimination  in  passenger 
rates,  see  supra,  section  2. 

As  to  applications  for  injunctions  in  rate  wars  by  carriers  and 
shippers,  see  annual  report  of  1896.  page  43. 

For  account  of  ''rate  war"  injunctions  filed  by  a  competing 


358  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    3 

carrier,  a  trust  company  representing  security  holders  of  the 
carrier,  and  a  complaining  shipper  during  rate  war  between 
Seaboard  Air  Line  and  the  Southern  Railway  Company  in 
1896,  see  annual  report  of  commission  for  1896,  page  43. 

§  266  (200).  Discrimination  in  kinds  of  traffic. — The  first 
paragraph  of  section  3  also  prohibits  any  undue  or  unreasonable 
preference  or  advantage  of  any  particular  description  of  traffic 
in  any  respect  whatever.  It  was  held  in  the  Oregon  Short 
Line  &  U.  N.  R.  Co.  v.  Northern  Pacific  Railway  Co.,  ninth  cir- 
cuit, 9  C.  C.  'A.  409,  61  Fed.  158  (1894),  that  this  first  paragraph 
of  the  third  section  forbidding  discriminations  against  any  lo- 
cality or  description  of  traffic  is  for  the  protection  of  the  locality 
or  traffic  itself,  and  cannot  be  invoked  by  a  carrier  against  a 
connecting  carrier  for  alleged  discriminations  in  the  matter  of 
requiring  prepayment  of  freight  and  car  mileage.  The  court 
said  that  it  was  not  competent  for  a  railroad  company  to  appro- 
priate the  grievances  of  a  citizen  or  locality  under  section  3  and 
complain  on  account  of  it. 

Goods  offered  for  shipment  from  a  given  point  must  be  car- 
ried for  the  established  rate  from  such  point,  in  the  absence  of 
a  though  routing,  regardless  of  the  point  where  the  goods 
originated.  Bigbee  Packet  Co.  v.  M.  &  0.  R.  Co.  (So.  Dist.  of 
Ala.),  60  Fed.  545  (1893)  ;  4  L  C.  C.  R.  611,  3  Int.  Com.  Rep.  515. 

Discriminations  against  kinds  of  traffic  have  been  involved 
with  discrimination  against  localities  where  the  industries  dis- 
criminated against  are  establislied.  and  especially  when  raw 
materia]  and  manufaciured  products  are  in  any  sense  competi- 
tive. This  is  illustrated  in  the  litigation  resulting  from  the 
competition  between  the  packing  houses  of  Chicago  and  those 
which  have  been  established  in  the  stockraising  section  in  the 
west  where  the  industries  located  in  Chicago  are  directly  con- 
cerned in  keeping  down  the  rates  on  live  stock  to  that  point  as 
compared  wiUl  the  rates  on  packing  house  products.  See  4  I. 
C.  C.  R.  158,  also  4  I.  C.  C.  R.  611,  3  I.  C.  C.  R.  515,  and  10  I. 
C.  C.  R.  428.  The  commission  made  an  order  in  this  latter  case 
brought  on  the  complaint  of  Chicago  Live  Stock  Exchange,  pro- 
hibiting the  carrier  from  charging  higher  rates  for  transporting 
cattle  to  Chicago  from  points  west  than  for  transorting  live  stock 
properties.  The  circuit  court,  northern  district  Illinois,  after 
an  exhaustive  investigation,  declined  to  enforce  this  order,  141 


§    266]  THE   INTERSTATE    COMMERCE   ACT.  359 

Fed.  1003,  and  the  judgmeTit  was  affirmed  l)^'  the  supreme  court 
in  209  U.  S.  108,  52  L.  Ed.  705.  in  1908.  The  court  lield  that 
there  Avas  no  presumption  of  wrong  arising  from  a  change  of  rate 
by  a  carrier  nor  was  there  any  universal  rule  that  the  rate  on  raw 
material  should  not  be  higher  tlian  on  tlie  manufactured  product. 
The  cost  of  carriage  and  risk  of  injury  might  excuse  a  higher  rate 
on  live  stock  than  on  dessed  meats  and  packing  house  products, 
and  tlie  reduction  of  the  freight  rates  for  packing  house  products 
did  not  work  an  undue  and  unreasonable  preference  when  it  was 
induced  by  competition  and  did  not  directly  injure  or  influence 
the  shippers  of  live  stock.  The  court  said  in  this  case  that  the 
railroads  were  the  private  property  of  their  owners,  and  while 
from  the  public  character  of  the  work  in  which  they  are  engaged 
the  public  has  the  right  to  prescribe  rules  for  securing  faithful 
and  efficient  service  and  equality  between  shippers  and  com- 
munities, in  no  proper  sense  is  the  public  a  general  manager,  and 
it  followed  that  the  railroad  companies  could  contract  with  ship- 
pers for  a  single  transportation  or  for  successive  transportations, 
subject  though  it  may  be  to  a  change  of  rates  in  the  manner 
provided  in  the  act;  and  in  fixing  their  own  rates,  the  carriers 
may  take  into  account  competition  with  other  carriers,  provided 
only  that  the  competition  is  genuine  and  not  a  pretense.  For 
subsequent,  Oct.  1911,  case  of  discrimination  against  packing 
house  products  in  favor  of  live  hogs,  from  Iowa  points  to  the 
east,  see  21  I.  C.  C.  R.  490. 

The  same  alleged  discrimination  between  kinds  of  traffic  and 
localities  wherein  tlie  competing  industries  were  located  were 
shown  in  the  complaint  of  the  ^lissouri  and  Kansas  millers 
against  the  differential  between  wheat  and  flour,  where  the  dis- 
crimination operated  in  favor  of  the  Texas  mills  as  against  the 
mills  of  Missouri  and  Kansas.    See  infra,  §  269. 

Questions  of  undue  preference  of  kinds  of  traffic  have  been 
raised  by  manufaeurers  in  respect  to  raw  material  and  manufact- 
ured product  for  the  protection  of  their  local  industries  against 
competition,  and  also  by  the  manufacturers  of  and  dealers  in  com- 
modities, wliich  were  commercially  competitive,  as  anthracite 
and  bituminous  coal,  4  I.  C.  C.  R.  535,  3  Int.  Com.  Rep.  460. 
This  question  of  undue  preference  to  particular  kinds  of  traffic 
was  also  involved  with  the  subject  of  carload  and  less  than  ear- 
load  rates,  supra,  §  206.  See  3  I.  C.  C.  R.  473,  2  Int.  Com.  Rep. 
742;  5  I.  C.  C.  R.  638,  4  Int.  Com.  Rep.  285. 


360  THE    INTERSTATE    COilMERCE    ACT,  [SECTION    3 

§  267  (201).  Preferences  against  traffic— must  involve  in- 
jury.— Undue  preference  against  traffic  must  ordinarily  be  such 
that  injuri/  is  caused  thereby  to  some  party  or  locality.  The  com- 
mission said  in  10  I.  C.  C.  E.  173,  one  of  the  Louisville  Stock- 
yards cases,  with  reference  to  a  claim  that  a  refusal  to  receive 
carloads  of  live  stock  from  a  connecting  carrier,  when  carloads 
of  dead  freight  were  received,  that  this  involved  an  undue 
preference  of  the  dead  freight,  that  this  refusal  to  receive  live 
stock  did  not  in  any  respect  benefit  dead  freight.  If  an  undue 
discrimination  was  found,  the  carrier  might  comply  with  the 
order  by  ceasing  to  deliver  dead  freight,  and  if  this  latter 
alternati^-e  was  adopted,  complainant  would  not  be  benefited 
and  other  shippers  would  be  greatly  injured.  See  also  Butch- 
ers &  Drovers  StockTards  Co.  v.  L.  &  X.  K.  Co..  U  C.  C.  A.  290, 
67  Fed.  35  (1895). 

When  manufacturing  industries  are  established  in  localities 
it  often  happens  that  a  slight  change  in  the  adjustment  of 
transportation  charges  as  to  the  raw  material  and  manufac- 
tured product  or  article  may  be  sufficient  to  close  manufac- 
turing plants  at  some  points  and  increase  the  output  at  others 
located  elsewhere. 

This  was  the  contention  in  the  Chicago  Live  Stock  case,  but  the 
supreme  court,  supra,  sec.  266,  held  that  there  was  no  presump- 
tion of  wrong  arising  from  a  change  of  rate  by  a  carrier,  nor 
Avas  there  any  universal  rule  that  the  rate  of  the  raw  material 
should  not  be  higher  than  on  the  manufactured  product.  It  was 
admitted,  however,  that  as  a  general  rule,  the  manufactured  prod- 
uct carried  a  higher  rate  than  the  raw  material. 

§  268  (202).  A  reasonable  regulation  of  carload  weights  not 
preferential. — It  was  ruled  in  7  I.  C.  C.  R.  255,  that  a  rule  made 
by  a  carrier  which  had  not  provided  track  scales  at  stations. 
forbidding  shippers  to  load  cars  above  a  specified  weight  of 
marked  capacity  of  the  car  under  the  so-caUed  penalty  of  an 
increased  rate  on  the  excess  weight,  was  not  unlawful,  pro- 
vided the  increase  in  charges  for  the  excess  weight  was  not  un- 
reasonable, and  the  margin  between  such  maximum  and  the 
carriers'  minimum  of  carloads  of  grain  was  so  wide  that  ship- 
pers could  readily  comply  with  both  rules.  Such  rules  how- 
ever must  be  shown  upon  the  carriers'  posted  schedule.     See 


§    269]  THE   INTERSTATE   COMMFRCE   ACT.  361 

infra,  section  C.  In  this  case  it  was  also  rnlcM]  that  rules  for 
minimum  carload  weights  for  corn  or  other  grain  which  va- 
ries with  the  size  of  cars  furnished  by  the  carrier  are  unreason- 
iible,  in  that  they  would  inevitably  confuse  and  puzzle  shippers 
and  consignees,  and  subject  them  to  excessive  charges  resulting 
from  arbitrary  weights,  and  increase  the  number  of  overcharge 
claims  and  afford  many  opportunities  for  discrimination  in 
rates  between  competing  shippers.  The  commission  said  there- 
fore that  the  carrier  should  enforce  a  fixed  and  reasonable  mini- 
mum carload  rate  for  corn  and  other  grain  irrespective  of  the 
capacity  of  the  cars  furnished  by  it  to  shippers. 

In  another  case,  3  I.  C.  C.  R.  241  and  2  Int.  Com.  Rep.  599, 
the  commission  held  that  a  rule  was  reasonable,  which  prescribed 
the  minimum  vreight  of  a  carload  of  cattle  at  a  certain  rate,  and 
then  charged  by  the  hundred  pounds  for  any  excess  of  weight 
over  the  minimum.  The  commission  said  that  such  a  rule  was 
more  just  and  reasonable  than  the  practice  of  making  a  carload 
rate  irrespective  of  weight  leaving  the  shipper  to  load  into  the 
car  as  many  cattle  as  he  pleased  and  was  able  to  put  into  it,  and 
the  fact  that  some  dii^culties  were  found  to  exist  in  the  prompt 
and  accurate  weighing  of  the.  cattle  was  not  a  reason  for  abolish- 
ing the  new  rule,  but  rather  for  improving  and  perfecting  it. 

§  269  (203) .  Differentials  between  grain  and  grain  products. 
— This  question  has  been  extensively  discussed  before  the  com- 
mission. The  millers  located  in  wheat  producing  territory 
strouglj'-  insisted,  that  flour  being  more  easily  handled,  was  en- 
titled to  at  least  an  equal  rate  with  wheat.  On  the  other  hand, 
the  millers  located  in  Texas  out  of  the  wheat  producing  terri- 
tory were  directly  interested  in  a  high  differential  between  wheat 
and  flour,  so  as  to  at  once  secure  an  adequate  supply  of  wheat 
and  exclude  competing  flour.  It  appeared  from  the  testimony 
in  the  proceeding  instituted  before  the  commission  by  the  millers 
of  j\fissouri  and  Kansas  that  the  Texas  railroads  were  in  the 
habit  of  increasing  this  differential  during  harvest  time  for  the 
benefit  of  the  Texas  flour  mills.  The  commission  ruled,  4  I.  C. 
C.  R.  417,,  and  3  Int.  Com.  Rep.  400,  that  a  differential  of  five 
cents  per  hundred  pounds,  that  is,  five  cents  per  hundred  pounds 
higher  on  flour,  was  v/arranted  by  the  peculiar  conditions,  but 
that  a  larger  differential,  such  as  had  been  maintained  for  con- 


362  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    3 

siderable  periods,  worked  an  unjust  discrimination  and  was  un- 
lawful. 

In  8  T.  C.  C.  R.  304,  decided  some  nine  years  later,  tlie  com- 
mission reaffirmed  this  ruling  saying  that  the  advantages  were 
not  sufficient  to  warrant  interference  with  the  established  dif- 
ferential; and  in  the  same  opinion,  the  differential  between 
corn  and  corn  meal  ia  the  same  territory  was  made  not  to  ex- 
ceed three  cents  per  hundred  pounds.  This  ruling  was  again 
reaffirmed  in  January,  1904.    10  I.  C.  C.  R.  35. 

In  11  I.  C.  C.  Rep.  220,  a  differential  on  corn  meal  shipped 
from  Missouri  river  points  to  Texas  was  fixed  at  a  maximum  of 
three  cents  above  the  rate  on  corn  in  force  at  the  same  time.  In 
16  I.  C.  C.  Rep.  73,  the  differential  on  flour  was  fixed  at  not 
more  than  twelve  per  cent,  of  the  rate  on  wheat  from  Kansas 
points  to  Phoenix,  Arizona.    See  also  12  I.  C.  C.  Rep.  258. 

In  cases  from  other  sections  of  the  country  it  was  held  that 
grain  and  grain  products  were  presumptively  entitled  to  equal 
rates.  See  8  I.  C.  C.  li.  214,  where  the  commission  ruled  that 
an  equal  rate  on  wheat  and  flour  in  the  export  trade  was  pre- 
sumptively proper,  but  that  in  view  of  all  the  conditions  shown 
in  the  investigation,  the  differential  rate  for  export  should  not 
exceed  two  cents  per  hundred  pounds. 

§  270  (204).  The  commission  not  concluded  by  ruling  of  state 
commission. — In  the  case  last  cited  it  w^as  shown  that  by  the 
state  law  or  by  the  rulings  of  state  commissions  a  shipper  in 
Kansas  or  Missouri  of  cattle  consigned  to  a  point  in  the  state  was 
entitled  to  load  the  car  at  discretion  without  the  charge  being 
increased  thereby.  But  the  commission  said  that  while  such 
action  of  the  state  authorities  had  always  been  treated  with 
respect,  it  was  in  no  wise  conclusive  upon  the  Interstate  Com- 
merce Commission  in  the  regulation  of  interstate  commerce,  as 
the  commission  thought  that  the  action  of  the  carriers  in  pre- 
scribing rates  for  the  transportation  of  cattle  by  weight  instead 
of  by  carload  was  not  in  itself  illegal  and  was  in  accord  witli 
the  general  practice  as  to  the  regulation  of  carrier's  charges. 
The  state  action  therefore  could  not  be  allowed  to  control  the 
matter  which  was  within  the  federal  jurisdiction. 

§  271  (205).  Discrimination  in  mode  of  shipment. — Undue 
preference  may  consist  not  only  in  a  differential  rate,  that  is, 


§    271]  THE    INTERSTATE    COMMERCE   ACT.  36:? 

a  difference  in  rate  not  warranted  by  tlic  eliaractfr  of  tlu*  com 
modity  or  any  consideration  relating  to  the  cost  of  service,  but 
also  in  any  discininination  in  the  performance  of  any  of  the 
duties  of  the  earriei.  or  any  accessorial  services  rendered.  This 
is  illustrated  in  the  ridings  of  the  commission  upon  the  subject 
of  the  alleged  discriminations  in  tiie  shipment  of  oil  in  tanks 
as  against  the  shipment  in  barrels.  Thus  it  was  ruled  in  1  I.  C. 
C.  R.  503  and  1  Int.  Com.  Hep.  722,  that  when  oil  is  trans- 
ported in  tanks  permanently  affixed  to  car  bodies,  the  tank  is 
to  be  considered  as  part  of  the  car,  and  for  oil  transported 
therein  the  charge  for  transportation  should  be  the  same  by 
the  hundred  pounds,  that  the  carrier  charges  for  transporta- 
tion between  the  same  points,  of  barrels  filled  with  like  oil  and 
taken  in  carload  lots,  and  that  the  carrier  was  guilty  of  unjust 
discrimination  if  the  shipper  in  barrels  was  charged  a  higher 
rate.    See  also  2  I.  C.  C.  R.  90,  2  Int.  Com.  Rep.  67. 

In  the  case  last  cited,  on  account  of  the  difference  in  ex- 
pense of  service  a  higher  rate  for  the  oil  in  barrels  in  less  than 
carload  lots  as  compared  with  oil  in  carload  lots  was  sustained. 
The  allowance  by  a  carrier  to  a  shipper  of  oil  in  tanks  of 
forty-two  gallons  or  any  number  of  gallons  for  alleged  leakage 
and  waste  in  the  transportation,  in  the  absence  of  a  correspond- 
ing allowance  to  shippers  in  barrels,  was  an  unjust  discrimina- 
tion and  unlawful.  4  I.  C.  C.  R.  131,  3  Int.  Com.  Rep.  162. 
There  was  no  objection  however  to  the  use  of  estimated  or  con- 
structive weights,  provided  tlie  method  of  estimating  Avorks  no 
inequality  in  its  practical  ai)plieation  to  competing  modes  of 
conveyance. 

It  is  the  duty  of  the  carrier  to  equip  its  road  with  the  means 
of  transportation,  and  in  the  absence  of  exceptional  conditions, 
those  means  must  be  open  impartially  to  all  shippers  of  like 
traffic.  If  the  carrier  transports  freight  in  cars  owned  by  the 
shipper,  it  must  be  upon  such  terms  as  shall  not  constitute  an 
unjust  discrimination  against  shii)pers  of  like  traffic,  who  are 
excluded  from  the  use  of  such  private  cars.  AYhere  the  use  of 
a  class  of  private  ears,  such  as  tank  ears,  is  not  opened  to  ship- 
pers impartially,  but  is  practically  limited  to  one  class  of  .ship- 
pers, and  the  charge  for  a  barrel  pa<-kage  in  liarrel  shipments 
in  the  absence  of  a  corresponding  charge  on  the  tank  ship- 
ments results  in  a  greater  cost  for  the  transportation,  it  is  undue 


364  TPIE    INTERSTATE    COMMERCE    ACT.  [SECTION   3 

preference  nnd  diserimination.  5  I.  C.  C.  R.  415,  4  Int.  Com. 
Rep.  162.  For  decision  of  supreme  court  as  to  alleged  discrimin- 
ation between  tnnk  and  barrel  shipments,  supra,  sec.  155. 

§  272  (206).  Classification. — The  subject  of  undue  prefer- 
ence against  kinds  of  traffic  necessarily  involved  the  question  of 
classification.  The  strict  apportionment  of  a  cost  of  service  on 
all  classes-  of  commodities  equally  would  be  impracticable,  for 
the  reason  that  articles  which  are  bulky  and  cheap  would  be 
unable  to  bear  the  burden  of  transportation,  as  their  value 
would  be  confiscated  by  the  cost  of  transportation  for  any  con- 
siderable distance.  It  is  universally  recognized  therefore  that 
in  order  that  such  articles  as  grain  and  its  products,  fuel,  lum- 
ber and  ore  can  be  transported  at  low  rates  wliich  they  can 
stand,  it  is  necessary  for  the  carrier  to  charge  upon  the  other 
classes  of  goods,  which  comprise  greater  value  in  smaller 
compass,  a  greater  proportionate  rate.  Upon  this  necessity  are 
based  the  principle  and  practice  of  classification  of  freight 
traffic,  which  have  been  exhaustively  discussed  in  the  reports 
of  the  Interstate  Commerce  Commission.  See  report  of  1888, 
page  34. 

Com.modities  not  classified,  are  given  what  is  known  as  com- 
modity rates.  Thus  salt  requires  and  receives  a  commodity  rate 
lower  than  class  rates.  The  commission  said  in  5  I.  C.  C.  R.  299, 
4  Int.  Com.  Rep.  33,  that  the  carriers  should  only  be  limited  as 
to  such  low  rating  by  the  rule  that  a  commodity  should  not  be 
carried  at  such  unrcm.unerative  rates,  as  will  impose  burdens 
upon  other  articles  transported  to  recoup  losses  in  carrying  that 
commodity. 

Under  the  amendment  of  1910,  to  section  one,  it  is  made  the 
duty  of  all  common  carriers  to  establish,  observe,  and  enforce 
just  and  reasonable  classifications  of  property  with  reference 
to  which  rates,  tariffs,  regulations,  or  practices  are  or  may  be 
made  or  prescribed  and  just  and  reasonable  regulations  and 
practices  affecting  classifications,  etc..  and  every  unjust  and  un- 
reasonable classification  is  prohibited  and  declared  to  be  un- 
lawful. 

§  273.  Uniform  classification  recommended. — The  commission 
in  its  several  annual  reports,  has  uniformly  and  earnestly 
recommended  a  uniform  classification.     Thus,  in  the  eleventh 


§    272]  THE    IXTERSTATIC    CO-MMl.Ki  K    ACT.  otj.> 

annual  report  of  18D7,  p.  62,  it  reviewed  the  subject  and  its  prior 
recommendations  and  said  that  at  the  time  of  the  adoption  of 
the  Interstate  Connnerce  Act  of  1886  classifications  were  nearly 
as  numerous  as  the  railroads  and  led  to  endless  confusion.  Some 
classifications  contained  not  less  than  thirty-three  classes,  and 
even  in  later  years  in  some  of  the  southern  states  there  \yere 
classifications  in  use  containing  as  many  as  twenty-two  classes 
of  freight.  The  subject  was  complicated  by  the  local  interests 
involved  in  different  parts  of  the  country  which  it  was  claimed 
required  distinct  classifications.  The  commission  said  that  many 
of  the  complaints  before  then  were  based  upon  discriminations 
and  injustices  arising  from  the  different  classifications  in  use  in 
the  United  States.  The  evil  has  been  measurably  reduced  by  the 
growth  of  ''community  of  interests"  among  railroads  and  the 
consolidations  of  connecting  lines,  but  the  dift'erences  and  re- 
sulting confusion  are  still  very  great.  The  commission  has  con- 
sistently urged  upon  the  railroads  of  the  country  their  co-opera- 
tion in  t!ie  adoption  of  a  uniform  classification.  See  21st  annual 
report  1907,  p.  19,  \vliere  it  repeats  its  opinion  that  a  single 
classification  was  regarded  as  essential  to  insure  compliance  with 
the  law  and  to  promote  greater  economy  in  administration  and 
conduct  of  transportation.  The  commission  conceded  that  it 
was  a  task  of  great  magnitude  and  that  it  was  evident  that  the 
carriers  themselves  by  nuitual  concessions  and  through  voluntary 
and  harmonious  action  could  accomplish  the  result  better  than 
if  congress  or  some  delegated  tribunal  established  a  classifica- 
tion for  tliem.  The  commission  said  that  it  was  advised  that  the 
carriers  operating  the  several  classifications  in  different  terri- 
tories, had  created  a  central  committee  consisting  of  persons 
specially  qualified  to  engage  in  a  higlily  technical  work  involved 
in  the  unification  of  classifications.  In  view  of  the  fact  that  the 
control  of  classifications  is  expressly  delegated  to  the  commission 
by  the  i-ecent  amendments  of  the  act,  it  says  significantly  in  the 
report  of  1910:  ''From  the  progress  of  the  w^ork  as  stated  it 
appears  that  the  carriers  are  making  a  sincere  efifort  to  harmonize 
as  far  as  possible  the  conflicting  features  of  the  various  classifica- 
tions, but  the  stimulus  of  requirement  should  be  applied  unless 
satisfactory  results  at  an  early  day  indicate  that  the  desired 
uniformity  will  be  brought  about  by  voluntary  action." 


366  TPIE    INTERSTATE    COMMERCE    ACT,  [SECTION    3 

§  274  (207).  Consultation  of  carriers  in  classification  not  il- 
legal combination. — In  the  report  of  18*J9,  pp.  12  to  20,  the  coiu- 
niission  diseiis-sed  the  question  of  the  advanee  in  freight  j-ates 
by  the  carriers  using  what  is  known  as  the  official  classification, 
covering  the  territory  lying  east  of  the  JMississippi  and  north  of 
the  Ohio  and  Potomac  rivers,  and  in  that  connection  gives  the 
opinion  of  the  attorney-general  of  Deeeralier  30,  1899,  to  the 
effect  that  consultation  by  the  representative  railroad  men. in 
the  committee  respecting  suggested  changes  in  classification, 
and  subsequent  independent  action  by  the  respective  railroad 
companies  by  the  adoption  of  the  new  classification  recom- 
mended, in  the  absence  of  any  testimony  of  compulsion  or  com- 
bination in  adopting  a  classification,  was  not  in  violation  of  the 
Anti-Trust  law. 

§  275  (208).  Undue    preference    in    classification.— Undue 

preference  may  be  effected  by  discrimination  in  classification 
between  commodities  v.'hich  are  in  fact  competitive,  where  such 
classification  is  not  b^nsed  on  a  difference  in  the  cost  of  service. 
The  English  statute  of- 1854  was  construed  as  imposing  upon  the 
carrier  the  burden  of  justifying  such  discrimination  by  con- 
siderations relating  to  the  cost  of  carriage.  Oxlade  v.  N.  E.  Ry, 
Co.,  1  Ry.  &  Canal  Traffic  Cases,  73;  Thompson  v.  London  & 
N.  W.  Ry.  Co.,  2  Ry.  &  Canal  Traffic  Cases,  115.  This  general 
principle  has  been  applied  by  the  commission  in  a  variety  of 
cases.  Thus,  the  advanee  of  hay  and  straw  from  the  6th  to  the 
5th  class  on  the  official  classification  of  January  1,  1900  (see  9 
I.  C.  C.  R.  264),  was  ruled  unreasonable  and  unjust  as  resulting 
in  unlawful  discrimination  and  prejudice  against  the  localities 
where  such  commodities  are  produced,  and  against  producers, 
dealers  and  consumers.  As  to  the  governing  principles  of  freight 
classification,  see  6  I.  C.  C.  R.  148  and  4  Int.  Com.  Rep.  525 ;  9 
I.  C.  C.  R.  78.  See  also  3  I.  C.  C.  R.  473,  2  Int.  Com.  Rep. 
742. 

In  4  I.  C.  C.  R.  212,  3  Int.  Com.  Rep.  257,  it  was  said  that 
where  questions  of  classification  and  rates  are  involved  as  to 
one  particular  article  of  freight,  it  is  often  necessary  to  exam- 
ine and  consider  the  classifications  and  rates  upon  other  articles 
in  which  the  same  calculations  in  respect  to  value,  bulk  and 
expense  of  handling  &nd  carriage  would  to  a  considerable  ex- 
tent enter.     For  the  purpose  of  such  comparison  it  is  not  in- 


§    275]  TlIK    IMKH.slAlK    (  (i.M.Mi.K'.l:.    ACT.  367 

dispensably  necessary  that  tlie  ai-tides  should  be  competitive, 
though  if  they  are  competitive,  then  this  feature  is  held  partly 
to  be  considered.  The  proper  method  of  determining  the  justice 
of  classification  by  comparison,  is  with  classification  created  by 
the  carrier  for  analogous  articles.  5  I.  C.  C.  R.  638,  4  Int.  Com. 
Rep.  285.  The  fact  that  dift'ereut  rates  and  classifications  arc  in 
force  in  difi'erent  sections  of  the  country  would  not  of  itself 
warrant  an  extension  of  the  lower  rate  of  classification  to  the 
higher  rate  and  classification  as  applied.  There  must  be  proof 
of  unlawful  discrimination  or  disadvantage  or  unreasonably 
higher  rates  to  procure  an  order  directing  different  rates  and 
classification.    6  I.  C.  C.  R.  61. 

In  6  I.  C.  C.  R.  85,  a  commodity  (i.  e.  not  classified)  rate 
published  for  intending  settlers  only,  but  in  fact  given  to  ship- 
pers indiscriminately  was  condemned  by  the  commission  as 
calculated  to  mislead  the  public  and  afford  an  opportunity  for 
favoritism. 

For  illustrations  of  the  rulings  of  the  commission  in  cases  in 
classification,  see  2  I.  C.  C.  R.  1,  2  Int.  Com.  Rep.  1,  where 
classification  of  dried  fruit  and  raisins  in  two  different  classes 
was  ruled  unreasonable. 

Hub  blocks  were  classed  with  lumber,  instead  of  with  un- 
finished wagon  materials.    2  I.  C.  C.  R.  122,  2  Int.  Com.  Rep.  81. 

In  1  I.  C.  C.  R.  393,  1  Int.  Com.  Rep.  685,  railroad  ties  were 
classed  with  other  rough  lumber. 

In  2  I.  C.  C.  R.  573,  2  Int.  Com.  Rep.  403,  Hostetter's  Stomach 
Bitters  were  ruled  not  properly  classified  in  the  first  class  with 
other  liquids  similar  in  character.  In  4  I.  C.  C.  R.  -32,  3  Int 
Com.  Rep.  74,  patent  medicines  were  ruled  properly  classed  at 
a  higher  rate  than  ale,  beer  and  mineral  water 

In  4  I.  C.  C.  R.  41,  3  Int.  Com.  Rep.  77,  toilet  soap  was  ruled 
properly  classed  higher  than  laundry  soap,  the  commission  hold- 
ing that  manufacturer's  description  of  his  production  for  com- 
mercial purposes  warranted  a  classification  acordingly.  See 
also  4  I.  C.  C.  R.  733,  3  Int.  Com.  Rep.  564. 

5  I.  C.  C.  R.  663,  4  Int.  Com.  Rep.  318,  ruled  that  celery  was 
properly  classified  with  vegetables  rather  than  with  fruits.  In 
6  I.  C.  C.  R.  148,  in  view  of  the  great  reduction  in  value  of 
window  shades,  the  classification  as  first  class  was  held  unreason- 
able. The  United  States  circuit  court,  in  64  Fed.  724  (1804).  de- 
clined to  enforce  thi^  order  on  the  ground  tliat  it  applied  to 


368  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    3 

shades  having  a  very  high  value  as  well  as  to  the  cheaper  varie- 
ties, and  the  order  was  amended  accordingly.    6  I.  C.  C.  R.  548. 

In  7  I.  C.  C.  R.  40,  open-end  envelopes  were  ruled  properly 
classed  with  merchandise  envelopes. 

In  8  I.  C.  C.  R.  368,  iron  pipe  and  fittings  packed  in  cases 
were  ruled  properly  classed  higher  than  iron  pipe  and  fittings 
packed  in  barrels.  6  I.  C.  C.  C.  61,  ruled  that  there  were  condi- 
tions compelling  a  low  rate  upon  flour  which  did  not  apply  in 
the  transportation  of  cereal  products. 

In  4  I.  C.  C.  R.  212,  3  Int.  Com.  Rep.  257,  the  principles  of 
classification  were  discussed,  and  applied  in  the  case  of  surgi- 
cal chairs.  In  10  I.  C.  C.  R.  281,  cow-peas  were  ruled  properly 
classed  with  grain,  and  not  with  fertilizers. 

In  12  I.  C.  C.  Rep.  216,  the  commission  said  that  classifica- 
tion must  be  based  upon  a  real  distinction  from  a  transporta- 
tion standpoint,  and  could  not  depend  upon  the  uses  of  the  com- 
modity after  reaching  the  destination.  If  the  matter  w^as  con- 
sidered from  any  other  than  a  transportation  standpoint,  it 
would  lead  to  an  almost  endless  multiplication  of  rates.  Thus 
it  was  ruled  in  13  I.  C.  C.  Rep.  109,  that  the  inclusion  of  wire 
brushes  and  brooms  not  toilet  in  cases  of  less  than  carloads,  in 
the  first  class,  was  unreasonable,  and  they  were  ordered  classified 
in  the  third  class;  while  the  inclusion  of  new  and  old  automo- 
biles in  the  same  class  was  found  in  15  I.  C.  C.  Rep.  27,  not  to  be 
unjust,  as  no  convenient  line  could  be  drawn  between  old  and 
new  machines  of  different  values  in  transportation. 

In  21  I.  C.  C.  R.  518,  classification  of  earthen  crucibiles  at 
third  class  in  less  than  carloads  and  fourth  class  in  carloads, 
was  held  unjust  and  discriminatory. 

§  276  (209).  Power  of  the  commission  in  correcting  classi- 
fication.— The  commission  has  in  a  number  of  cases  exercised 
the  power  to  order  a  change  in  the  classification,  as  in  the  cases 
before  cited;  also  in  1  I.  C.  C.  R.  393,  1  Int.  Com.  Rep.  685; 
2  I.  C.  C.  R.  122,  2  Int.  Com.  Rep.  81;  4  I.  C.  C.  R.  312,  3 
Int.  Com.  Rep.  257 ;  6  I.  C.  C.  R.  148,  4  Int.  Com.  Rep.  525. 

Assurance  made  by  a  carrier  that  if  one  will  locate  in  busi- 
ness on  the  line  of  his  road  his  property  shall  be  taken  for  trans- 
portation as  belonging  to  a  specified  class,  it  was  ruled  by  the 
commission  in  2  I.  C.  C.  R.  122,  2  Int.  Com.  Rep.  81,  could  not 
bind  tlie  carrier  so  ns  to  compel  a  classification  accordingly. 


^    277 J  THE    INTERSTATE    C<J.MMEKCE    ACT.  3C9 

There  can  be  no  contract  rij^lit  to  a  special  classification,  as  the 
law  requires  utiifoi'iuity  and  iin[)ai-iality  in  llic  dealings  of  the 
carrier  with  all  i)ersous. 

The  .subject  of  classification  was  considered  by  the  supreme 
court  in  C.  II.  &  B.  R.  Co.  v.  Interstate  Com.  Comn,  200  V.  S. 
142,  51  L.  Ed.  m)5  (1!)07),  affirniin*,'  146  Fed.  5;")!). 

The  court  in  this  case  sustained  the  order  of  the  commission, 
directing  the  carrier  to  cease  from  further  cliargin<,'  the  freight 
rate  for  conunon  soap  in  less  than  carload  lots  operating 
throughout  official  classification  territory,  increasing  the  classifi- 
cation from  fourth  to  third  class,  which  was  found  to  have 
brought  about  a  genei-al  disturbance  in  relations  previously  ex- 
isting in  the  territory,  and  creating  discriminations  and  prefer- 
ences among  manufacturers  and  shippers  of  the  commodity  and 
between  localities  in  such  territory.  The  court  said  that  the 
findings  of  the  commission,  that  a  classification  of  freight  rates 
produced  preferences  and  discriminations  would  not  be  inter- 
fered with  on  appeal,  when  concurred  in  by  a  federal  circuit 
court,  unless  the  record  established  that  clear  and  unmistakable 
error  had  been  committed.  For  the  order  of  commission,  see 
0  I.  C.  C.  R.  440. 

§  277  (210).  Reasonable  regulations  in  classifications. — The 
counnission  has  ruled,  G  1.  C.  C.  K.  61,  that  the  fact  that  dif- 
ferent rates  and  classifications  are  in  force  in  different  sections 
of  the  country''  would  not  itself  warrant  an  extension  of  the 
lower  rate  and  classification  to  the  section  where  a  higher  rate 
and  classification  were  applied.  There  must  be  x>roof  of  un- 
lawful discrimination  or  disadvantage  or  of  unreasonable  higher 
rates  to  justify  directing  an  order  for  changes  in  the  classiti- 
cation.  In  this  case  it  was  ruled  that  a  mixed  carload  rate  for 
cereal  products  or  for  cereal  products  and  fiour,  that  would 
have  the  effect  of  throwing  out  of  the  trade  many  competitors 
of  complainant,  or  the  manufacture  only  of  certain  kinds  of 
cereal  products  and  of  centralizing  the  busines  in  the  hands  of 
one  or  more  of  the  dealers,  should  not  f)e  curtailed,  when  with- 
out it  no  w  rong  is  done  to  any  one  and  the  market  is  open  to 
all  competitors.  The  commission  said  therefore  that  to  obtain 
the  abrogation  of  a  rule  in  classification  denying  a  mixed  car- 
load rate  upon  specific  articles,  the  rule  should  be  shown  to 
be  unreasonable,  unfair  or  unjustly  discriminative. 
24 


370  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    3 

It  was  ruled  in  20  T.  C.  C.  R.  546,  that  the  chissification  of  an 
article  of  commerce  should  be  stated  in  terms  that  the  shipping 
public  may  readily  understand.  Tariffs  are  to  be  construed 
according  to  their  language,  and  the  intention  of  the  framers 
and  the  practices  of  the  carriers  do  not  control.  See  16  I.  C. 
C.  R.  431.  In  20  I.  C.  C.  R.  489,  it  was  ruled  that  the  classifi- 
cation rule  applying  minimum  weights  on  shipments  of  mer- 
chandise, and  more  particularly  by  millinary  packing  in  ordinary 
pasteboard  or  strawboard  boxes,  that  the  rule  was  not  unrea- 
sonable which  provided  for  the  refusal  of  such  shipments  when 
not  crated.  But  in  the  same  case,  a  classification  rule  applying 
minimum  weights  on  shipments  in  corrogated  paper  or  pulp 
cartons  of  certain  sizes  when  uncrated,  instead  of  assessing 
charges  on  the  basis  of  their  actual  weights,  was  found  unrea- 
sonable. 

§  278  (211).  Facilities  for  interchange  of  traffic. — The  sec- 
ond paragraph  of  the  third  section,  though  based  in  part  upon 
the  English  statute,  is  materially  different  therefrom,  and  the 
difference  has  been  construed  as  substantial.  Thus  the  English 
statute  was  construed  as  empoAvering  the  court  to  compel 
through  routing  of  passengers  or  freight.  The  commission  held 
in  an  early  case,  1  I.  C.  C.  R.  86,  1  Int.  Com.  Rep.  357,  that 
this  section  of  the  act  did  not  compel  one  railway  company  to 
sell  through  passenger  tickets  over  the  road  of  another  com- 
pany. In  the  Kentucky  and  Indiana  Bridge  case,  decided  in 
1890.  which  was  really  the  pioneer  case  in  the  construction  of 
the  act,  37  Fed.  567,  Jackson,  J.,  said  that  the  commission 
was  not  vested  with  authority  to  establish  through  routes  nor 
to  fix  through  rates  between  connecting  lines. 

It  has  since  been  definitely  determined  by  the  repeated  de- 
cisions of  the  courts  that  there  is  no  authority  in  the  commis- 
sion or  in  the  courts  under  the  act  to  compel  either  the  rout- 
ing of  passengers  or  freight,  and  that  the  requirement  of  this 
section  for  the  affording  of  all  reasonable  and  proper  facili- 
ties for  the  interchange  of  traffic  and  the  receiving,  forward- 
ing and  delivery  of  passengers  and  property  does  not  mean 
the  receipt  and  delivery  of  cars  or  their  through  routing  of 
any  kind,  but  only  the  receipt  and  delivery  of  freight  and  pas- 
sengers at  connecting  points  without  discrimination.     This  had 


§    279]  THE   INTERSTATE   COMMERCE   ACT.  371 

been  the  construction  priven  hy  the  supreme  court  to  the  con- 
stitution and  statute  of  Colorado  prior  to  the  enactment  of  the 
Interstate  Commerce  Act  (A.  T.  &  S.  F.  R.  Co.  v.  Denver  & 
N.  0.  K.  Co.,  110  U.  S.  GG7,  28  L.  Ed.  291  (1884)  ;  and  such  has 
been  tlie  construction  given  to  tlie  Interstate  Commerce  Act  in  a 
numl)ei-  of  cases  in  the  circuit  court.s  and  circuit  courts  of  ap- 
I)eal,  cited  approvingly  by  the  supreme  court  in  the  Central  Stock 
Yards  case,  supra,  192  U.  S.  568,  48  L.  Ed.  565  (1904).  See  also 
Little  Rock  &  M.  R.  Co.  v.  St.  Louis  Iron  ^Mountain  &  So.  R. 
Co.,  41  Fed.  559,  and  59  Fed.  400  (1894)  ;  Oregon  Short  Line 
&  Utah  Northern  R.  Co.  v.  Xorthern  Pacific  R.  Co..  61  Fed. 
158,  9  C.  C.  A.  409  (1894)  ;  Allen  v.  Oregon  Railroad  &  Naviga- 
tion Co.,  98  Fed.  16  (1899).  It  was  held  in  all  of  these  cases 
tliat  througli  routing  of  passengers  or  freight  depends  upon 
conlract  voluntarily  made  between  the  carriers,  and  there  is 
no  power  in  the  commission  or  courts  to  enforce  the  making  of 
such  a  contract.  Preseott  &  Arizona  Central  R.  R.  Co.  v.  A.  T. 
&  S.  F.  R.  Co.,  73  Fed.  438  (1896),  wherein  the  court  comments 
on  apparently  different  ruling  in  N.  Y.  &  Northern  R.  R.  Co. 
V.  N.  Y.  &  N.'^E.  R.  R.  Co.,  50  Fed.  867  (1892).  For  discrimina- 
tion by  carrier  between  competing  local  transfer  companies, 
see  St  Louis  Drayage  Co.  v.  L.  &  N.  R.  R.  Co.,  65  Fed.  39  (1894). 
The  eomniission  said  that  in  the  act  to  regulate  commerce,  con- 
gress intended  to  effect  the  same  results  as  the  English  statute, 
but  omitted  the  machinery  necessary  to  accomplish  it,  and  it 
was  therefore  recommended  that  the  act  be  amended  in  this 
particular.  The  commission  has  in  its  annual  reports  recom- 
mended to  congress  to  give  the  necessary  authority  by  new 
legislation.  For  amendments  of  1906  and  1910  authorizing  the 
commission  to  establish  through  routes,  see  supra,  §  372. 

A  rail  carrier  may  make  a  through  rate  with  one  line  of 
connecting  steamboats,  and  refuse  to  make  such  rates  with  other 
steamboats.  4  I.  C.  C.  R.  265,  3  Int.  Com.  Rep.  278.  The  words 
"track  and  terminal  facilities"  in  this  section  refer  to  all  rail 
carrier,  or  a  carrier  part  rail  ;:iul  part  water,  but  not  to  an  in- 
dependent water  line. 

§  279  (212).  Discrimination  in  exacting  prepayment  from 
connecting-  carriers  not  unjust  discrimination. — It  follows  from 
the   principle,    that   through   routing   is   a   matter  of   contract, 


372  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    3 

tliat  ■vvliilc  the  cjirrior  is  obliged  to  receive  passengers  and 
freight  from  other  roads  at  eonneeting  points,  it  is  not  obliged 
to  waive  the  requirement  of  prepayment,  and  it  therefore  fol- 
lows that  the  requirement  of  prepayment  on  freight  on  all  prop- 
erty received  from  one  carrier  and  not  exacting  such  prepay- 
ment from  a  competing  carrier  is  not  an  unjust  discrimination. 
See  Little  Rock  &  M.  R.  Co.  v.  St.  Louis  &  Southwestern  R. 
Co.,  59  Fed.  400  (1893),  and  Gulf,  Colorado  &  Santa  Fe  R.  Co. 
V.  :Miami  Steamship  Co.,  30  C.  C.  A.  142.  86  Fed.  407  (1898)  ; 
Ihvaco  Ry.  &  Navigation  Co.  v.  Oregon  Ry.  &  Navigation  Co.. 
6  C.  C.  A.  495.  57  Fed.  673;  Little  Rock  &  "SL  R.  R.  Co.  v.  St.  L., 
I.  :\[.  &  So.  R.  R.  Co..  supra. 

§  280.  Discrimination  in  exacting  prepayment  from  shippers. 

In  Gamble-RolHusou  Commission  Co.  v.  C.  &  X.  W.  Ky.  Co., 
168  Fed.  161,  in  the  circuit  court  of  appeals  of  the  eighth  cir- 
cuit, it  was  held.  Judge  Hook  dissenting,  that  a  common  car- 
rier did  not  violate  the  act  by  subjecting  a  party  to  unreason- 
able and  undue  preference  in  insisting  upon  his  paying  his 
freight  bills  in  advance  and  refusing  to  give  him  the  credit 
which  it  gave  customarily  to  others.  In  the  opinion  of  the  court, 
the  extension  of  credit  was  a  favor,  in  effect  a  loan,  to  the  ship- 
per, which  he  had  no  right  to  ask,  and  therefore  its  refusal 
could  in  no  way  be  the  Ijasis  of  a  charge  of  discrimination  or 
undue  preference.  On  the  other  hand,  it  was  strongly  urged 
in  the  dissenting  opinion,  that  the  court  should  take  notice  of 
the  general  custom  of  the  business,  and  that  the  favor  extended 
to  one  shipper  should  be  extended  to  all  similarly  circumstanced. 

§  281  (213).  State  control  of  interchange  of  interstate  traffic. 

Questions  have  arisen  out  of  the  anomalous  control  of  commerce 
by  governmental  authority  of  the  states  and  the  United  States, 
as  the  same  carriers  are  controlled  by  the  state  with  reference 
to  their  intrastate  traffic,  and  by  the  federal  government  as  to 
interstate  traffic.  A  belt  or  switcliing  railroad  is  subject  to  the 
state  authority  when  it  charges  local  rates  for  its  traffic  and 
makes  no  interstate  routing,  while  it  becomes  subject  to  the 
federal  law  when  it  joins  with  other  carriers  in  making  through 
shipments  of  interstate  traffic.  In  the  Louisville  stockyards 
litigation,   under   the   provisions    of   the  state    constitution    of 


§    282]  THE   INTERSTATE    COMMERCE    ACT.  373 

Kentucky  it  \v;i.s  claiii'cd  that  tlic  dcfoidant  coiiipany  was  re- 
<|uired  to  receive  and  deliver  freight  in  tlie  carloads  to  any  point 
that  was  in  physical  eonni'ction  with  the  tracks  of  another  com- 
pany. It  was  said  by  the  Tnited  ^States  court  of  appeals  for 
the  sixth  circuit.  55  C.  C.  A.  63,  118  Fed.  113  (1902),  that  assum- 
mg,  without  decidinfr,  that  the  Kentucky  constitution  and  legisla- 
tion made  such  re(|uirement,  that  the  state  could  not  regulate 
interstate  commerce,  using  the  term  in  the  sense  of  intercourse 
and  interchange  of  tralTic  between  the  states.  The  power  of 
the  state  to  re(iuire  connecting  tracks  between  two  railroad  com- 
X-anies  at  an  intersection  for  the  transfer  of  cars  used  in  the 
local  business  of  such  line  of  railroad  was  conceded.  In  the 
case  before  the  court,  it  was  not  the  means  of  making  a  physi- 
cal connection  with  other  railroads  that  was  aimed  at,  but  it 
was  sought  to  compel  the  cars  and  freight  received  from  one 
state  to  be  delivered  to  another  at  a  particular  place  and  in  a 
])articnlar  way.  If  the  Kentucky  constitution  could  be  given 
any  such  construction,  it  would  follow  that  it  could  regulate  in- 
terstate commerce.  The  judgment  in  this  case  was  affirmed  by 
the  supreme  court,  in  192  XJ.  S.  568.  The  latter  court  did  not 
decide  this  question  of  the  power  of  the  state  with  reference  to 
interstate  traffic,  as  it  construed  the  Kentucky  constitution  as 
referring  only  to  cases  where  freight  was  destined  to  some  fur- 
ther point  by  transportation  over  a  connecting  line.  It  will 
be  seen  that  in  this  case  there  was  no  authoritative  construction 
of  the  state  constitution  and  statute  by  the  judiciary  of  the 
state. 

At  the  time  this  suit  of  the  Central  Stockyards  was  filed  a 
proceeding  was  also  instituted  before  the  Interstate  Commerce 
Commission  by  the  Railroad  Commission  of  Kentucky,  and  the 
decision  of  the  supreme  court  was  followed  by  the  commission, 
dismissing  the  complaint.     10  1.  C.  C.  R.  173. 

§  282  (214).  State  and  municipal  control  of  terminals. — The 

last  clause  of  the  section.  ])i'oviiling  that  the  directing  of  facili- 
ties for  intei-change  of  tratTic  should  not  be  construed  as  re- 
(luiring  the  carrier  to  give  use  of  its  tracks  or  other  terminal 
facilities  to  another  crirrier  engaged  in  like  business,  was  con- 
strued by  the  United  States  circuit  court  of  Iowa,  in  State  of 
Iowa  V.  Chicago,  Milwaukee  &  St.  Paul  Railroad  Co..  33  Fed. 


oT-i  THE    INTERSTATE    COMMERCE    ACT,  [SECTION    3- 

391,  in  1887,  soon  after  the  adoption  of  the  act.  The 
state  of  loAva,  filed  a  bill  in  the  state  court  against  the  defend- 
ant carrier  to  enforce  an  order  of  the  State  Board  of  Railroad 
Commissioners  requiring  the  defendant  to  pass  cars  of  other 
companies  over  its  siding  in  the  city  of  Dubuque  at  reasonable 
rates  fixed  by  the  board,  the  sidings  having  been  laid  under 
the  permission  of  the  city  on  condition  that  they  should  be 
open  to  all.  The  defendant  carrier  moved  the  case  to  the 
United  States  court,  there  being  no  diverse  citizenship,  on  the 
ground  that  a  federal  question  was  involved,  to-wit,  its  right 
in  interstate  traffic  under  section  3  of  the  act.  The  court  sus- 
tained motion  to  remand  the  case,  saying  that  the  provision 
in  the  section  as  to  the  terminal  facilities  simply  declared  that 
the  preceding  provision  of  the  section  should  not  be  deemed 
to  give  the  right  to  one  carrier  to  use  the  tracks  or  terminal 
facilities  to  anotlier  carrier  in  like  business,  and  had  reference 
to  the  effect  of  the  act  of  congress,  and  to  nothing  else  srying: 
''If  the  defendant  company  by  a  contract  with  the  city  of 
Dubuque  has  bound  itself  to  allow  other  companies  to  use  part 
of  its  tracks  or  terminal  facilities  this  clause  of  the  act  of  con- 
gress does  not  affect  such  a  contract  or  the  enforcment  thereof. 
So  also  if  the  state  of  Iowa  has  provided  by  proper  statute  that 
different  companies  may  have  a  joint  or  common  use  of  cer- 
tain terminal  facilities,  the  rights  of  the  several  companies  to 
such  joint  use  are  not  affected  by  the  provisions  of  the  Inter- 
state Commerce  Act,  but  the  same  must  be  determined  by  the 
statute  of  the  state."  See  also  Interstate  Stockyards  Co.  v. 
Indianapolis  U.  R.  Co.,  99  Fed.  472  (1900).  where  there  was  a 
similar  state  and  municipal  regulation  for  the  use  of  the  termi- 
nal tracks. 

§  283  (215).  The  charging  of  local  rates  not  an  unjust  dis- 
crimination.— When  through  rates  and  through  billing  are  a 
matter  of  agreement  between  the  carriers  in  interstate  com- 
merce, it  follows  that  when  a  carrier  with  whom  connecting 
carriers  decline  to  make  through  rates  delivers  freight,  it  only 
has  the  right  to  demand  that  other  carriers  receive  from  and 
deliver  freight  for  transportation  at  their  published  local  tariff 
rates.  See  4  I.  C.  C.  R.  265,  3  Int.  Com.  Rep.  278;  3  I.  C.  C. 
R.  450,  2  Int.  Com.  Rep.  721.  As  to  the  distinction  between 
local  and  through  rates,  see  s%ipra,  section  2. 


§    284]  THE   INTERSTATE    COMMERCE   ACT.  375 

It  was  ruled  by  tho  commission  in  7  I.  C.  C.  K.  323,  that  in 
the  absence  of  some  agreement  or  understanding  with  a  con- 
necting line  by  which  the  joint  tariff  i-atcs  was  authorized,  a 
given  carrier  cannot  lawfully  apply  any  otiier  rates  than  those 
wliich  is  fixed  by  the  transportation  ])ctween  the  points  fixed 
by  its  railroad;  and  the  rates  so  fixed  are  the  only  lawful  rates 
which  the  carrier  may  charge  for  any  transportation  service 
which  it  may  perform.  The  only  rates  authorized  by  the  act 
are  the  rates  established  by  a  single  carrier  upon  its  route  and 
the  joint  rates  over  continuous  lines  or  routes  operated  by  more 
than  one  carrier. 

But  while  a  carrier  is  not  bound  to  make  through  routing, 
and  in  the  absence  of  such  agreements  for  through  routing  may 
charge  its  regular  tariff  rates,  those  charges  must  be  reasonaUe 
for  the  service. 

In  Augusta  Southern  Ey.  Co.  v.  Wrightsville  &  T.  R.  Co., 
74  Fed.  522,  the  court  held  that  in  the  absence  of  through 
routing  the  carrier  was  not  entitled  to  charge  the  full  local  rate 
permitted  by  the  state  law  on  freight  which  was  not  in  reality 
local,  but  through  freight.  The  decision  in  this  case  however 
cannot  be  reconciled  with  the  authorities  cited  above  unless 
upon  the  ground  that  the  rate  was  unreasonable  per  se  for  the 
service. 

§  284.  The  right  of  exclusive  through  routing.— Through 
routing  rests  upon  contract  between  the  carriers  except,  of 
course,  where  the  power  of  ordering  a  through  routing  is  ex- 
ercised by  the  commission  under  the  act  as  amended  in  1906. 
It  follows,  therefore,  that  a  carrier  may  lawfully  make  a  con- 
tract with  one  connecting  carrier  for  through  routing  to  the  ex- 
clusion of  another. 

This  subject  has  been  extensively  litigated  in  exclusive  con- 
tracts in  what  are  known  as  tlie  Live  Stock  cases.  "Wliile  it  is 
tlie  duty  of  a  railroad  company  to  provide  suitable  facilities 
for  receiving  and  delivering  live  stock  at  its  station  without 
additional  compensation  other  than  the  regular  transportation 
charge,  it  may  provide  these  facilities  by  making  an  exclusive 
contract  with  one  stockyards  company,  and  as  long  as  tliis  com- 
pany imposes  no  charge  for  delivering  live  stock  when  that 
stock  is  taken  by  the  consignee  witliin  a  reasonable  time,  such 
contract  is  not  obnoxious  to  law.    Covington  v.  Keith,  139  U.  S. 


376  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    3 

]28,  35  L.  Ed.  73;  Butchers  &  Drovers  Stoclsvards  Co.  v.  L.  & 
N.  R.  Co.,  67  Fed.  35,  Central  Stockyards  Co.  v.  L.  &  N. 
R.  Co..  5^  C.  C.  A.  63.  118  Fed.  113,  192  U.  S.  568,  48  L.  Ed.  565. 
In  the  ease  of  the  Interstate  Stockyards  Co.  v.  Indianapolis 
Union  R.  Co.,  supra,  the  Indiana  circuit  court  held  that 
a  belt  line  connecting  with  the  different  carriers  and  making 
agreements  for  continuous  shipments  of  interstate  commerce 
had  no  right  to  discriminate  against  different  stockyards  by 
refusing  to  deliver  stock  at  one  of  the  yards,  though  consigned 
to  the  owner  for  care,  and  the  court  granted  a  temporary  in- 
junction against  the  discrimination.  In  this  case  however  the 
terminal  road  was  expressly  required  by  the  state  statute  and 
its  city  franchises  to  render  such  services  without  discrimina- 
tion, and  it  seems  that  the  track  connection  had  been  made  and 
tlie  injunction  was  against  the  interruption  of  the  service 
theretofore  rendered. 

§  285  (217).  Contract  rights  of  trackage. — In  the  absence  of 
statute  the  rights  of  a  railroad  company  under  a  lawful  agree- 
ment for  the  specified  use  of  the  tracks  of  another  railroad 
company  are  measured  in  respect  to  the  direct  use  in  the  terms 
of  the  contract,  and  the  provisions  of  the  act  to  regulate  com- 
merce apply  to  the  situation  created  by  the  contract,  and  add 
no  authority  for  a  dit?erent  use  of  the  track.  3  I.  C.  C.  R.  519, 
2  Int.  Com.  Rep.  771.  In  this  case  it  was  ruled  by  the  com- 
mission that  the  Rock  Island  Company  which  operated  the 
Union  Pacific  tracks  between  Kansas  City  and  Topeka  upon 
condition  that  no  intermediate  business  should  be  done  by  the 
Rock  Island  Company  on  any  part  of  the  line  used  under  the 
agreement,  the  Pacific  Company  retaining  the  control  of  the 
road  and  supplying  accommodations  between  the  inte  -mediate 
points  and  Kansas  City.  The  majority  of  the  commission  said 
that  such  running  arrangements  existed  in  many  parts  of  the 
country  and  were  of  great  service  in  transportation.  Chairman 
Cooley  doubted  the  validity  of  the  contract,  ])ut  agreed  that  the 
commission  had  no  jurisdiction  to  interfere  with  the  arrange- 
ment. 

In  Union  Pacific  Railroad  Co.  v.  Chicago,  etc.,  R.  Co.,  163 
U.  S.  564,  41  L.  Ed.  265  (1896).  the  supreme  court  held  that  a 
later  contract  made  between  the  same  parties  for  trackage 
rights   by  the   Rock   Island   Company  over  the   Union  Pacific 


§    287]  THE   INTERSTATE    COMMERCE   ACT.  377 

tracks  from  T'ouncil  BluflPs  to  Soutli  Omaha,  and  givinj^  tlic 
Union  l^acific  Company  the  riglit  to  operate  the  Rock  Island 
tracks  between  Soiitli  Omaha  and  Lincoln,  was  valid,  and  the 
<30iirt  said  that  such  business  arrangements  were  in  accord  with 
the  policy  in  favor  of  continuous  lines  declared  b}'  congress  in 
the  act  of  ISiJG  ( supra,  ^  42).  and  that  a  railroad  could  con- 
tract to  give  another  running  rights  over  its  tracks  without  ex- 
press statutory  autliority.  and  tlie  decree  of  the  court  l)elovv 
specifically  enforcing  the  contract  was  affirmed.  The  contract 
in  this  case  provided  that  the  T^nion  Pacific  Company  should 
do  no  intermediate  business  on  tlie  Koek  Island's  tracks. 

§  286.  Rights  of  connecting  carriers  as  to  milling  in  transit 
privileges. — As  tlirough  i-outing  is  ))ased  upon  contract  and  tin- 
relation  is  not  created  by  any  ap])lication  of  the  common  law 
or  requirement  of  statute,  excei)t  where  ordered  by  the  com- 
mission, it  follows  that  an}^  railroad  company  may  decline  to 
become  a  jiarty  to  any  agreement  for  through  routing  unless 
the  terms  and  conditions  are  satisfactory  to  it. 

This  principle  has  been  applied  by  the  commission,  9  I.  C. 
C.  R.  3X1,  to  the  privilege  of  milling  in  transit  granted  by  some 
roads.  As  before  shown  the  commission  has  approved  of  this 
practice  as  promotive  of  commerce  but  no  authority  is  given 
by  the  act,  to  the  commission,  to  regulate  the  granting  of  sucii 
privileges.  The  commission  ruled  however  that  the  Boston  & 
Maine  Railroad,  receiving  traffic  from  the  west,  was  not  com- 
pelled to  apply  that  rate  on  shipments  of  feed,  ground  in  tran- 
sit; and  that  it  was  not  bound  by  a  ])rivate  arrangement  ex- 
isting between  the  shipper  and  the  carrier  from  whom  he 
received  the  privilege,  to  grind  his  corn  in  transit.  It  was  ruled 
in  the  same  case  however,  that  while  the  connecting  carrier 
was  bound  by  the  arrangement  for  milling  in  transit,  it  could 
impose  an  arbitrary  charge  in  addition  to  tlie  regular  through 
rate  on  the  milled  ]uoduct. 

As  to  right  of  carriers  to  judicial  protection  in  the  interchange 
of  traffic,  see  infra,  section  8,  and  as  to  unlawful  combinations 
interfering  with  sacli  intcT'changes.  see  ''ifra.  section  10. 

§  287.  Exclusive  contracts  for  station  facilities  not  unlawful. 
In  Donovan  v.  Pennsylvania  Company.  IDD  U.  S.  270.  50  L. 
Ed.  p.  192  (1905) .  the  supreme  court  affirmed  the  United  States 
circuit  court  of  appeals  for  the  seventh  circuit,  120  Fed.  215. 


378  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    3 

324  Fed.  1016,  in  affirming  a  decree  of  the  circuit  court  enjoin- 
ing cabmen  from  entering  a  railway  station  and  grounds  to 
solicit  customers,  and  from  congregating  on  the  sidewalk  in 
front  of  the  station  so  as  to  interfere  with  the  ingress  and  egress 
of  passengers  and  employes  entering  the  railway  station  and 
grounds  of  the  railroad  of  complainant  in  Chicago.  The  rail- 
way company  had  made  an  agreement  with  a  local  transfer 
company  to  furnish  at  its  passenger  station  all  the  vehicles 
necessary  for  the  accommodation  of  passengers  arriving  there 
on  its  trains  or  on  the  trains  of  other  railroad  companies  using 
the  station ;  and  the  court  held  that  it  could  rightfully  exclude 
from  the  station  and  depot  grounds  all  other  hackmen  or  cab- 
men seeking  entrance  for  the  purpose  of  soliciting  for  them- 
selves the  custom  or  jiatronage  of  passengers.  The  court  said 
that  the  licensed  hackmen  or  cabmen,  when  not  forbidden 
by  valid  municipal  regulations,  could  within  reasonable  limits 
use  the  public  sidewallvs  about  the  main  entrance  to  the  rail- 
way passenger  station  in  prosecuting  their  calling;  but  they 
were  not  entitled  to  so  congregate  as  to  interfere  with  the  in- 
gress and  egress  of  passengers  and  employes.  The  court  also. 
held  that  the  absence  of  adequate  legal  remedy  justified  a  re- 
sort to  injunction. 

In  20  T.  C.  C.  R.  458,  the  commission  follow^ed  this  case  in 
sustaining  the  arrangement  made  by  the  Wabash  Railroad  with 
a  fruit  auction  company  to  conduct  its  business  as  an  auction- 
eer of  fruit  and  vegetables  on  the  terminal  premises  of  the  de- 
fendant in  St.  Louis.  The  commission  said  there  was  no  ele- 
ment of  discrimination  as  between  the  different  shippers  that 
\vished  to  use  the  auction  company's  service.  The  commission 
said  that  the  riglit  to  grant  exclusive  privileges  of  this  gen- 
eral nature  in  passenger  stations  had  been  much  discussed  in 
the  courts  of  this  country  and  in  England,  and  had  generally 
been  sustained,  although  in  a  few  of  the  states  it  had  been  denied, 
but  that  the  decision  in  the  supreme  court  in  the  case  above 
cited  had  settled  the  matter.  The  commission  said  that  it 
could  not  take  cognizance  of  any  claims  except  those  of  the 
traveling  or  shipping  public. 


§    288]  THE   INTERSTATE    COMMERCE    ACT.  379 


Section  4. 

S  288.  Long  and  short  haul  provisions. 

289.  History  of  the  section  and  its  amendments, 

290.  Construction  of  the  section  prior  to  the  amendment  of  1910. 

291.  "Over  the  same  line." 

292.  Application  to  the  commission. 

293.  The  burden  of  proof. 

294.  Construction  of  section  by  commission  and  application  to  dif- 

ferent classes  of  rates. 

295.  Ruling  of  commission  as  to  export  and  import  rates  under  sec- 

tion. 

296.  The  commission  on  application  for  relief  under  the  fourth  sec- 

tion. 

297.  The  five  trade  zones  for  transcontinental  traffic. 

§  288.  Long  and  short  haul  provisions. — Sec  4.  {As  amended 
June  18,  1910.)  That  it  shall  be  unlawful  for  any  common  car- 
rier subject  to  the  provisions  of  this  Act  to  charge  or  receive 
any  ^eater  compensation  in  the  ago-regate  for  the  transporta- 
tion of  passengers,  or  of  like  kind  of  property,  for  a  shorter 
than  for  a  longer  distance  over  the  same  line  or  route  in  the 
same  direction,  the  shorter  being  included  within  the  longer 
distance,  or  to  charge  any  greater  compensation  as  a  through 
route  than  the  aggregate  of  the  intermediate  rates  subject  to 
the  provisions  of  this  Act ;  but  this  shall  not  be  construed  as 
authorizing  any  common  carrier  within  the  terms  of  this  Act 
to  charge  or  receive  as  great  compensation  for  a  shorter  as  for 

lConinii!4.<4ioii  ha.s  nntlioiUy  to  roliovo  ojiniors  from  the  oper- 
ation   of  tills   seetioii.l 

a  longer  distance:  Provided,  Iwwever.  That  upon  application 
to  the  Interstate  Coiiuuerce  Commission  such  common  carrier 
may  in  special  cases,  after  investigation,  be  authorized  by  the 
Commission  to  charge  less  for  longer  than  for  shorter  distances 
for  the  transportation  of  passengers  or  property ;  and  the  Com- 
mission may  from  time  to  time  prescribe  the  extent  to  which 
such  designated  common  carrier  may  be  relieved  from  the 
operation  of  this  section:  Provided,  further.  That  no  rates  or 
charges  lawfully  existing  at  the  time  of  the  passage  of  this 
amendatory  Act  shall  be  required  to  be  changed  by  reason  of 
the  provisions  of  this  section  prior  to  the  expiration  of  six 
months  after  the  passage  of  this  Act,  nor  in  any  case  where  ap- 
plication shall  have  been  filed  before  the  Commission,  in  accord- 
ance with  the  provisions  of  this  section,  until  a  determination  of 
such  application  by  the  commission. 


380  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    4 

[Water   ooniiietitlon.] 

"Whenever  a  carrier  by  railroad  shall  in  competition  with  a 
water  route  or  routes  reduce  the  rates  on  the  carriage  of  any 
species  of  freight  to  or  from  competitive  points,  it  shall  not  be  per- 
mitted to  increase  such  rates  unless  after  hearing  by  the  Inter- 
state Commerce  Commission  it  shall  be  found  that  such  proposed 
increase  rests  upon  changed  conditions  other  than  the  elimination 
of  water  competition. 

§  289.  History  of  the  section  and  its  amendment. — This  sec- 
tion was  not  based  upon  any  provision  in  the  English  statute. 
and  it  was  the  subject  of  more  thorough  discussion  in  congress, 
and  more  divergent  opinions  than  any  other.  The  original  bill 
in  the  house,  known  as  the  Reagan  Bill,  contained  an  absolute 
prohibition  of  charging  more  for  a  shorter  than  for  a  longer 
distance,  and  even  when  the  longer  distance  included  the 
shorter;  while  the  senate  bill,  known  as  the  Cullora  Bill,  con- 
tained a  similar  prohibition,  qualified  by  the  allowing  of  the 
granting  of  exceptions  by  the  commission  in  special  cases.  The 
section  was  reported  by  the  conference  committee,  and  con- 
tained the  words  "under  substantially  similar  circumstances 
and  conditions,"  qualifying  the  prohibition  of  the  greater 
charge  for  a  shorter  than  for  a  longer  distance  over  the  same 
line.  In  this  form  the  section  was  enacted.  These  words  "un- 
der substantially  similar  circumstances  and  conditions,"  were 
taken  from  the  second  section.  See  1  I.  C.  C.  Rep.  4,  and  1 
Int.  Com.  Rep.  278. 

The  bill  with  these  words  "under  substantially  similar  cir- 
cumstances and  conditions,"  became  a  law  and  continued  un- 
changed until  the  amendment  of  June  18,  1910,  when  these 
words  were  stricken  out;  so  that  now  the  section  contains  the 
prohibition  unqualified  of  a  greater  compensation  for  a  shorter 
than  for  a  longer  haul,  with  the  same  authority  in  the  com- 
mission upon  application  to  grant  relief  from  the  operation  of 
the  section  which  had  existed  in  the  original  act.  The  amend- 
ment contains  the  further  qualification  that  rates  law^fuUy  exist- 
ing at  the  time  of  the  jjassage  of  the  amendatory  act,  shall  not  be 
required  to  be  changed  prior  to  six  months  after  the  passage  of 
the  act,  nor  in  case  of  any  pending  application  for  relief  until 
its  determination  by  the  commission. 

The  amended  act  contains  the  further  new  proviso  that  where 
a  carrier  by  railroad  reduces  its  rates  in  competition  with  a  water 


J^    2fK)J  THE    IXTEHrtTATE    COM  .VI  l.H(  1.    ALT.  3&1 

route,  it  sliiill  not  bo  permitted  to  increase  tlie  rates  unle.s.s  the 
coiiiniission  finds  that  the  proposed  increase  rests  upon  changed 
conditions  otlicr  tluin  the  elimination  of  the  water  competition. 

§  290.  Construction  of  the  section  prior  to  the  amendment 
of  1910. — The  judicial  construction  of  the  section  prioi-  to  its 
hite  amenchnent  i-eally  turned  upon  the  real  meaning  of  tlie 
words  •'under  substantially  similar  circumstances  and  condi- 
tions," and  upon  the  effect  of  competition  in  determining  dis- 
similarity of  circumstances  and  conditions.  The  commission  at 
first  ruled  (see  opinion  hj'-  Cooley,  J.,  1  I.  C.  C.  Rep.  6,  and  1  Int. 
Com.  Rep.  278),  that  the  existence  of  actual  and  controllini: 
competition  in  respect  to  traffic  important  in  amount  might 
make  out  dissimilar  circumstances  and  conditions,  in  effect  leav- 
ing it  with  the  railroads  to  determine  in  the  first  instance  the  ex- 
istence of  i)eculiar  cases  of  competition  which  would  constitute  a 
dissimilarity  of  circumstances  and  conditions  under  the  act. 
Subseijuently.  in  ]8i)2,  the  commission  ruled  that  the  carrier 
could  not  judge  of  tins  emergency  for  itself,  but  should  apply  to 
the  conunission  when,  after  investigation,  the  exceptions  could 
be  made.  See  5  I.  C.  C.  Rep.  324,  4  Int.  Com.  Rep.  121 ;  5  I.  C. 
C.  Rep.  596,  4  Int.  Com.  Rep.  267. 

These  rulings  Avere  contested  in  the  courts,  and  five  years 
later,  in  1897,  the  supreme  court  overruled  the  conmiission  and 
established  the  rule  that  competition  of  any  kind,  whether  from 
railroads  subject  to  the  act  or  not,  was  an  effective  circumstance 
that  made  substantially  dis:similar  circumstances  and  conditions : 
and  that  such  competition  when  controlling,  should  justify  the 
carrier  in  making  a  lower  rate  for  the  longer  haul,  not  as  a 
matter  of  grace  or  favor  of  the  commission,  but  as  a  matter  of 
right.  Import  Rates  Case,  162  U.  S.  197,  40  L.  Ed.  940  (1896)  ; 
Commission  v.  Alabama  &  ^^lidland  R.  Co.,  168  U.  S.  144,  42  L. 
Ed.  414  (1897)  ;  L.  &  N.  R.  Co.  v.  r>ehmler,  175  U.  S.  648,  44  L. 
Ed.  309:  East  Tenn..  Va.  &  Ga.  R  Co.  v.  Commission,  181  U.  S. 
1,  45  L.  Kd.  719  (1900)  :  Commission  v.  L.  &  N.  R.  Co.,  190  U.  S. 
273,  47  L.  Hd.  1047  (1902). 

The  effect  of  the  amendment  of  1910  is  to  restore  the  jurisdic- 
tion of  the  commission  as  it  was  exercised  prior  to  this  ruling 
of  the  supreme  court.  That  is,  the  carrier  cannot  now  judge  for 
itself,  but  must  apply  fo  the  commission  under  its  power  to  grant 


382  THE    INTERSTATE    COMMERCE    ACT.  [SECTION   4 

relief,  and  tlie  commission  then  determines,  not  wlietlier  the  cir- 
cumstances are  dissimilar,  but  whether  the  facts  and  conditions 
constitute  a  si^eeial  case  for  the  authorization  of  a  lower  charge 
for  a  longer  than  for  a  shorter  distance. 

As  to  the  relation  of  this  ruling  of  the  snprerae  court  to  the 
prohibition  of  undue  preferences  under  section  3,  and  as  to 
the  power  of  the  commission  to  determine  the  reasonableness  of 
rates,  see  supra,  §§  230  et  seq.  See  also  rulings  of  the  commis- 
sion in  9  I.  C.  C  Eep.  534;  9  I.  C.  C.  Eep.  569,  and  10  I.  C.  C. 
Rep.  460. 

§  291  (223).  "Over  the  same  line."— The  view  was  ex- 
pressed in  tlie  opinion  in  the  United  States  court  of  appeals,  Os- 
borne V.  R.  R.  Co.,  3  C.  C.  A.  347,  52  Fed.  912  (1892),  that  when 
two  railroad  companies  owning  connecting  lines  of  road  unite 
in  a  joint  through  tariff  with  the  view  of  making  the  connect- 
ing roads  a  new  and  independent  line,  the  through  tariff  on  the 
joint  line  is  not  a  standard  by  which  the  separate  tariff  of  other 
companies  is  to  be  measured  in  determining  whether  the  fourth 
section  was  violated.  In  the  Social  Circle  Case,  162  U.  S.  184 
(1896) ,  40  L.  Ed.  935,  a  Georgia  railway  company  whose  road  lay 
wholly  within  the  state  of  Georgia  and  exacted  and  received  its 
regular  local  rate  for  the  transportation  on  its  line,  on  a  through 
bill  of  lading,  the  rate  of  which  was  fixed  by  adding  that  local 
rate  to  the  through  rate  from  Cincinnati  to  Atlanta,  was  held 
subject  as  to  the  through  bill  from  Cincinnati  to  Social  Circle  to 
the  federal  act  and  to  the  control  of  the  Interstate  Commerce 
Commission.  The  court  distinguished  the  Osborne  Case,  supra. 
upon  its  special  facts,  and  said  that  when  goods  shipped  under 
a  through  bill  of  lading  from  a  point  in  one  state  to  a  point  in 
another  are  received  in  transit  by  a  state  common  carrier  on  a 
conventional  division  of  the  charges,  such  carrier  must  be  deemed 
to  have  subjected  the  road  to  an  arrangement  for  a  continuous 
carriage  or  shipment  within  the  meaning  of  the  act  to  regulate 
commerce.  Having  elected  to  enter  into  the  carriage  of  interstate 
freights  and  thus  subjected  itself  to  the  control  of  the  commission, 
the  carrier  could  not  withdraw  that  control  with  respect  to  for- 
eign traffic  to  certain  points  on  its  road  and  exclude  other  points. 
The  court  added:  "When  w^e  speak  of  a  through  bill  of  lading, 
we  are  referring  to  the  usual  methods  in  use  by  connecting  com- 


§    293]  THE   INTERSTATE    COMMERCE   ACT.  383 

panics,  and  must  not  be  understood  to  inii)ly  that  the  common 
control,  manageinent  or  arrangement  might  not  Ijo  otherwise 
manifested. ' ' 

§  292.  Application  to  the  commission. — Under  the  original 
act,  after  the  ruling  of  the  supreme  court  as  to  the  right  of  the 
carrier  to  judge  for  itself  in  the  first  instance  of  the  controlling 
effect  of  competition  in  authorizing  a  greater  charge  for  a  shorter 
than  for  a  longer  haul,  the  occasion  for  a  resort  to  the  discretion- 
ary power  of  the  commission  under  the  proviso,  was  very  ma- 
terially effected.  During  the  period  w^hen  a  different  rule  pre- 
vailed such  applications  were  comparatively  numerous,  as  may 
be  seen  from  the  reports  of  the  Interstate  Commerce  Commission. 
For  a  summary  of  the  commission's  rulings  upon  applications 
made  for  relief,  made  prior  to  this  ruling  of  the  supreme  court, 
see  annual  report  of  1892,  pages  18  to  21;  1893,  page  22;  1894, 
page  18,  and  1895,  page  24. 

Petitions  for  relief  were  asked  on  other  gi-ounds  than  that  of 
controlling  competition.  Thus  the  "World's  Fair  at  Chicago 
was  held,  in  6  I.  C.  C.  R.  323,  and  6  I.  C.  C.  E.  328,  to  be  a  case 
of  an  exceptional  and  special  nature  justifying  relief  from  the 
operation  of  the  section.  The  same  ruling  was  made  in  the 
case  of  an  application  on  account  of  crop  failure  and  the  neces- 
sity of  reduced  rates  for  the  transportation  of  food  for  the 
people  and  their  animals.  These  cases  hoAvever  were  excep- 
tional and  nearly  all  the  applications  for  relief  were  on  the 
ground  of  controlling  competition.  It  was  said  by  the  commis- 
sion in  its  report  of  1897  that  the  effect  of  the  decisions  of  the 
supreme  court  was  to  eliminate  the  fourth  section  from  the  act. 

§  293  (225).  The  burden  of  proof.— Although  the  judicial 
construction  of  the  term  ''under  similar  circumstances  and  con- 
ditions ' '  had  a  very  profound  effect  upon  the  administration  of 
the  act,  it  is  not  strictly  correct  to  say  that  its  effect  was  to  elim- 
inate the  fourth  section.  It  put  upon  the  carrier  the  burden  of 
proving  the  existence  of  dissimilar  circumstances  and  conditions 
for  its  justification  when  the  fact  of  the  greater  charge  for  the 
shorter  haul  over  the  same  line  appears. 

Under  the  section  as  amended,  the  jurisdiction  of  the  commis- 
sion will  be  invoked,  not  to  determine  whether  the  circumstances 


384  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    4: 

are  dissimilar,  as  those  qualifying  words  are  now  omitted  from 
the  section,  but  whetlier  under  the  circumstances  the  carrier 
presents  a  case  for  the  exercise  of  the  discretion  of  the  commis- 
sion in  relieving  it  from  the  prohibitions  of  the  section. 

§  294.  Construction  of  section  by  commission  and  applica- 
tion to  different  classes  of  rates. — The  long  and  short  haul  pro- 
vision of  this  section  did  not  take  effect  as  to  the  existing  rates 
until  six  months  after  the  passage  of  the  act,  that  is,  until  Dec. 
18,  1910.  Prior  to  this  date,  in  October,  1910,  the  commission, 
acting  under  its  general  authority  under  the  section,  extended 
the  existing  rates  until  February,  1911,  providing,  however,  that 
the  discrimination  against  intermediate  points  should  not  be 
greater  than  in  existence  August  17,  1910,  except  under  certain 
described  competitive  conditions.  Carriers  desiring  relief  from 
section  4  were  directed  to  make  separate  application  for  freight 
rates  and  passenger  rates  and  also  for  long  and  short  hauls.  This 
extension  order  was  made  with  the  statement  that  the  commis- 
sion reaifirmed  its  express  view  that  a  through  rate  or  fare  that 
was  higher  than  a  combination  of  intermediate  rates  was  prima 
facie  unreasonable. 

On  ?,rarch  13,  1911,  applications  for  relief  having  been  filed 
by  the  transcontiuentcd  and  other  lines  the  commission  made  the 
following  ruling  as  to  the  application  of  the  amended  section  to 
different  classes  of  rates : 

"(1)  The  fourth  section  applies  to  all  rates  and  fares,  but 
in  determining  whether  its  provisions  are  contravened,  rates  and 
fares  of  the  same  kind  should  be  compared  with  one  another; 
that  is,  transshipment  rates  should  be  compared  with  transship- 
ment rates,  proportional  rates  with  proportional  rates ;  excursion 
fares  with  excursion  fares  and  commutation  fares  with  com- 
mutation fares.  It  would  not  be  in  violation  of  the  fourth  sec- 
tion, for  instance,  if  a  proportional  rate  to  or  from  a  given  point 
were  lower  than  a  regular  rate  to  or  from  an  intermediate  point, 
nor  if  a  commutation  fare  to  or  from  a  more  distant  point  were 
lower  than  a  regular  fare  to  or  from  an  intermediate  point. 

"A  proportional  rate  is  defined  as  one  which  applies  to  part 
of  a  through  transportation  which  is  entirely  within  the  juris- 
diction of  the  act  to  regulate  commerce;  that  is.  the  balance  of 
the  transportation  to  which  the  proportional  rate  applies  must 


§    295]  THE   INTERSTATE    COMMERCE   ACT.  385 

be  under  a  rate  iilcd  with  this  eoimiiission.  A  rate  to  a  port  for 
sliil)ment  beyond  by  a  water  carrier,  not  subject  to  tlie  provisions 
of  this  act,  would  not  be  a  proportional  rate. 

"  (2)  Where  from  the  absorption  of  a  switching  charge  it  re- 
sults that  a  total  transportation  charge  from  a  more  distant 
point  to  the  point  where  the  property  is  delivered  is  less  tlian 
the  total  transportation  charge  from  or  to  an  intermediate  point, 
the  fourth  section  is  violated.  Owing  however  to  the  very  gen- 
eral practice  of  absorbing  switching  charges  from  competitive 
and  not  from  non-competitive  stations,  and  in  view  of  the  fact 
that  more  benefit  and  little  complaint  results,  the  commission  will 
by  general  order  i)ermit  a  continuance  of  this  practice,  reserv- 
ing for  consideration  and  determination  individual  cases  which 
may  require  separate  consideration." 

§  295.  Ruling-  of  commission  as  to  export  and  import  rates 
under  the  section. — On  December  17,  1910,  the  commission 
made  a  i-uJing  as  to  tiie  application  of  the  section  as  amended  to 
export  and  import  rates. 

"(1)  Ti.at  inland  export  and  import  rates  are  subject  to  the 
provisions  of  the  uct  and  within  the  jurisdiction  of  the  com- 
mission. 

"(2)  That  the  fourth  section  of  the  amended  act  forbids 
carriers  sul)ject  thereto  without  authority  from  the  commission, 
in  accordance  with  tlie  said  section,  to  charge  more  for  the 
transportation  of  a  like  kind  of  export  or  import  traffic  for  a 
shorter  than  for  a  longer  haul  over  the  same  line  in  the  same 
direction,  that  is,  as  we  understand  the  law  the  validity  of  the 
rate  under  the  section  is  determined  by  comparison  of  an  export 
rate  with  an  export  rate,  and  import  rate  with  an  import  rate. 

"(3)  So  far  as  the  fourth  section  is  concerned  carriers 
are  not  required  in  the  first  instance  to  establish  export  and 
import  rates  which  shall  be  measured  and  limited  by  domestic 
interstate  rates  between  the  same  points  of  origin  and  destina- 
tion in  the  United  States ;  but  as  export  and  import  rates  as  well 
as  domestic  interstate  rates  are  subject  to  the  provisions  of  the 
act  and  the  jurisdiction  of  the  commission,  it  is  clear  that  the 
reasonableness  of  any  of  these  rates  under  the  provisions  of 
section  one,  and  the  questions  of  discrimination  under  the  third 
section,  may  all  be  considered  and  the  commission  may  condemn 
25 


386  THE    INTERSTATE    COMMERCE    ACT.  [SECTION   4 

any  discrimination  in  export  and  import  rates  upon  comparison 
with  those  applicable  on  domestic  interstate  traffic  to  the  extent 
that  the  same  may  be  found  unjust  or  unreasonable  in  any  par- 
ticular case  upon  investigation  and  full  hearing." 

§  296.  The  commission  on  application  for  relief  under  the 
fourth  section.— In  opinions  filed  June  22,  1911,  21  I.  C.  C.  R. 
329,  and  21  I.  C.  C.  R.  400,  the  commission  exhaustively  con- 
sidered the  history  and  purpose  of  the  amendment  of  the  fourth 
section  concerning  the  long  and  short  haul  clause,  and  ruled 
that  the  amendment  was  a  provision  of  law  within  the  proper 
scope  of  congressional  jurisdiction  and  was  not  a  grant  of  arbi- 
trary or  absolute  power,  and  that  its  purposes  must  be  limited 
and  conditioned  upon  the  presence  in  special  cases  of  conditions 
and  circumstances  which  would  make  such  exceptions  legal  and 
proper  and  in  no  wise  antagonistic  to  other  provisions  of  the 
act.  Under  the  proviso  it  must  be  affirmatively  shown  by  the 
carriers  in  seeking  exception  that  injustice  will  n.ot  be  done  to 
intermediate  points  by  allowing  rates  to  the  more  distant  points. 
The  enactment  of  the  amended  law  was  to  make  its  prohibition 
of  the  higher  rate  for  the  shorter  haul  a  rule  of  well  nigh  uni- 
versal application  from  which  the  commission  may  deviate  only 
in  special  cases,  and  tlien  to  meet  transportation  circumstances 
which  are  beyond  the  carrier's  control.  The  commission  said 
that  congress  intended  to  invest  the  commission  with  authority, 
not  only  to  determine  whether  a  wrong  results  from  the  disre- 
gard of  the  long  and  short  haul  provision,  but  also  to  correct 
that  wrong  if  found  to  exist. 

In  the  application  for  relief  as  made  the  commission  must  in- 
quire whether  the  maintenance  of  the  higher  intermediate  rate 
will  result  in  unreasonable  charges  and  unjust  discriminations, 
and  the  commission  may  also  prescribe  in  any  way  that  is  definite 
and  certain  the  extent  to  which  the  intermediate  rate  may  ex- 
ceed the  long  distance  in  cases  where  this  is  necessary  to  prevent 
unreasonable  rates  or  unjust  discriminations. 

In  21  I.  C.  C.  R.  329,  the  commission  gave  an  interesting  re- 
view of  the  long-time  struggle  between  the  transcontinental  rail- 
roads and  the  ocean  carriers,  and  concludes  that  the  transcon- 
tinental lines  naturally  gave  consideration  to  sea  competition, 
but  that  for  thirty  years  the  whole  of  their  eiforts  had  been  to 


§    297]  THE   INTERSTATE   COMMEUCE   ACT.  387 

neutralize  and  control  such  competition.  The  opinion  intimates 
that  the  railroads  must  soon  meet  with  competition  by  water 
more  important,  soarcliing  and  determinative  in  its  effect  upon 
railroads  than  any  other;  that  is,  when  the  route  by  the  Panama 
canal  is  opened. 

The  enforcement  of  these  orders  of  the  commission  has  been 
temporarily  enjoined  by  the  commerce  court  (Nov.  1911)  and  it 
is  understood  that  the  alleged  confiscatory  character  of  the  or- 
ders will  finally  be  determined  by  the  supreme  court. 

§  297.  The  five  trade  zones  in  transcontinental  traffic. — 
In  the  reports  referred  to  on  the  applications  for  relief  under 
the  fourth  section,  under  the  amendment  of  1910,  the  commis- 
sion ruled  that  the  carriers  had  not  shown  that  undue  discrimina- 
tion was  not  affected  by  their  rate  adjustment  between  points  in 
Nevada  and  points  in  California,  nor  had  they  established  that 
the  rates  to  the  coast  cities  if  extended  by  them  from  eastern 
points  outside  the  zone  of  water  influence  were  not  fully  com- 
pensatory. The  applieations  for  relief  by  the  transcontinental 
carriers  from  the  long  and  short  haul  clause  were  therefore 
denied.  The  cities  of  Spokane  and  Salt  Lake  City  were  held 
specifically  to  be  prejudiced  by  the  charge  of  the  through  rate 
to  the  coast  with  the  local  rate  added. 

The  commission  announced  that  for  the  purpose  of  disposing 
of  this  matter  by  an  order  under  the  fourth  section,  they  had 
divided  the  United  States  into  five  territorial  zones,  as  follows : 

"(The  transcontinental  groups  hereinafter  described  are  as 
specified  in  R.  II.  Countiss'  agent's  transcontinental  tariff,  I.  C. 
C.  No.  929.)* 

"Zone  No.  1  comprises  all  that  portion  of  the  United  Statas 
west  of  a  line  called  line  No.  1,  which  extends  in  a  general  south- 
erly direction  from  a  point  immediately  east  of  Grand  Portage, 
Minn. ;  thence  southwesterly  along  the  northwestern  short  of 
Lake  Superior,  to  a  point  immediately  east  of  Superior,  Wis. ; 
thence  southerly,  along  the  eastern  boundary  of  transcontinental 
group  P,  to  the  intersection  of  the  Arkansas  and  Oklahoma  state 
line;  thence  along  the  west  side  of  the  Kansas  City  Southern 
Railway  to  the  Gulf  of  I\Iexieo. 

"Zone  No.  2  embraces  all  territory  in  the  United  States  lying 
east  of  line  No.  1  and  west  of  a  line  called  line  No.  2,  which 


*  R.  H.  Countiss  referred  to,  is  the  agent  of  the  trans-continental 
lines  for  the  purpose  of  compiling,  publishing,  and  filing  with  the  com- 
mission their  tariffs  on  classes  and  commodities. 


388  THE    INTERSTATE    COMMERCE    ACT.  [SECTION   4 

begins  at  the  international  boundary  betAveen  the  United  States 
and  Canada,  immediately  west  of  Cockburn  Island,  in  Lake 
Huron;  passes  westerly  through  the  Straits  of  Mackinaw;  south- 
erly through  Lake  jMiehigan  to  its  southern  boundary ;  follows 
the  west  boundarj^  of  transcontinental  group  C  to  Paducah,  Ky. ; 
thence  follows  the  east  side  of  the  Illinois  Central  Railroad  to 
the  southern  boimdary  of  transcontinental  group  C ;  thence  fol- 
lows the  east  boundary  of  group  C  to  the  Gulf  of  IMexico. 

' '  Zone  No.  3  embraces  all  territory  in  the  United  States  lying 
east  of  line  No.  2  and  north  of  the  south  boundary  of  transcon- 
tinental group  C  and  west  of  line  No.  3,  which  is  the  Buffalo- 
Pittsburg  line  from  Buffalo,  N.  Y.,  to  Wheeling,  W.  Va. ;  thence 
follows  the  Ohio  river  to  Huntington,  W.  Va. 

"Zone  No.  4  embraces  all  territory  in  the  United  States  east 
of  line  No.  3  and  north  of  the  south  boundary  of  transconti- 
nental group  C. 

"Zone  No.  5  embraces  all  territory  south  and  east  of  trans- 
continental group  C." 

And  the  commission  added  (21  I.  C.  C.  R.  425)  : 

"Looking  at  this  whole  situation  and  endeavoring  to  justly 
consider  the  interests  of  all  parties  affected,  including  the  car- 
riers, we  are  of  the  opinion  that  from  zone  1  no  higher  charge 
can  justly  be  made  at  any  intermediate  point  than  to  a  more  dis- 
tant point.  The  eastern  limit  of  this  territory  is  approximately 
1,500  miles  from  the  Atlantic  seaboard,  almost  midway  between 
the  Pacific  and  Atlantic  oceans.  No  traffic  has  ever  been,  and 
none  probably  ever  will  be  transported  from  this  section  to  the 
Atlantic  coast  and  thence  by  water  to  the  Pacific  coast.  Giving 
full  weight  to  the  effect  of  competition  of  all  kinds,  we  can  find 
no  justification  for  a  system  of  rates  which  maintains  from  this 
territory  a  higher  charge  to  an  interior  point  than  is  made  to 
the  coast. 

"With  respect  to  territory  embraced  in  zone  2  the  ease  stands 
somewhat  different.  This  zone  comprises  the  ^lississippi  Valley 
and  a  considerable  portion  of  the  great  manufacturing  area,  of 
the  west.  It  lies  400  miles  nearer  the  Atlantic  seaboard,  with 
which  it  is  connected  in  part  at  least  by  lines  of  railroad  afford- 
ing the  cheapest  transportation  service  in  any  part  of  the  coun- 
try. Still  there  never  has  been  and  there  probably  never  will  be 
in  the  future  any  considerable  movement  of  traffic  from  this 
territory  to  the  Pacific  coast  by  way  of  the  Atlantic  seaboard. 

"We  are  of  the  opinion  that  rates  from  this  territory  to  in- 
termediate points  may  properly  exceed  by  not  more  than  7  per 


§    2!)7  I  TllK    IXTERSTATE    CO.M.MKUCt:    ACT.  389 

cent,  rates  from  the  same  points  of  origin  to  Pacific  coast  termi- 
nals. 

"From  zone  3  tliere  is  still  greater  i)ossibility  of  actual  trans- 
portation competition  on  business  destined  to  Pacific  coast 
points,  altliougli  from  this  section  hitherto  the  a(;tual  movement 
has  been  only  occasional. 

"We  are  of  tlie  opinion  that  from  points  of  origin  in  this 
territory  rates  to  intermediate  points  may  properly  exceed  those 
to  terminal  points  by  not  more  than  15  per  cent. 

"In  the  past  the  actual  movement  from  eastern  points  of 
origin  to  Pacific  coast  terminals  has  been  mainly  confined  to  zone 
.4,  and  even  in  this  zone  the  greater  part  of  the  traffic  has  orig- 
inated in  or  near  the  seaboard  itself. 

"The  force  of  water  competition  is  greatest  in  New  York  and 
gradually  diminishes  as  the  distance  from  New  York  increases, 
but  we  are  of  the  opinion  that  this  entire  territory  may  properly 
be  treated  as  a  single  group,  and  that  rates  from  points  of  ori- 
gin within  its  limits  to  intermediate  points  may  properly  exceed 
those  to  terminal  points  by  not  more  than  25  per  cent. 

"No  opinion  is  expressed  at  this  time  as  to  zone  5,  since  rates 
from  that  territory  are  not  involved  in  these  proceedings. ' ' 

The  commission  said  that  this  was  not  a  new  and  additional 
authority,  but  simply  the  exercise  of  a  jurisdiction  provided  for 
in  the  fifteenth  section  for  the  adjustment  of  unjust  discrimina- 
tion, and  that  there  was  no  essential  difference  between  this 
order  and  an  order  which  the  commission  might  make  under  the 
third  section. 


390  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    5 


Section  5. 

§  298.  Pooling  of  freight  and  division  of  earnings  forbidden. 

299.  Construction  of  section. 

300.  Controlling  through  routing  by  initial  carrier  is  not  pooling. 

301.  Agreements  not  within  the  prohibition. 

302.  The  relation  of  the  section  to  the  Anti-Trust  Law  of  1890. 

303.  Pooling  as  a  defense  to  action  of  the  carrier. 

§  298.  Pooling  of  freight  and  division  of  earnings  forbidden. 

See.  5.  Tliat  it  shall  be  unlawful  for  auy  common  carrier  sub- 
ject to  the  provisions  of  this  act  to  enter  into  any  contract,  a^ee- 
ment,  or  combination  with  any  other  common  carrier  or  carriers 
for  the  pooling  of  freights  of  different  and  competing  railroads, 
or  to  divide  between  them  the  aggregate  or  net  proceeds  of  the 
earnings  of  such  railroads,  or  any  portion  thereof;  and  in  any 
ease  of  an  agreement  for  the  pooling  of  freights  as  aforesaid, 
each  day  of  its  continuance  shall  be  deemed  a  separate  offense. 

§  299  (227.)  Construction  of  section. — This  section  has  not 
been  amended.  It  was  more  thoroughly  discussed  in  congress 
and  in  the  public  press  before  the  enactment  of  the  statute  than 
any  other,  except  the  long  and  short  haul  provision  of  section  4, 
yet  in  view  of  its  importance  as  a  declaration  of  public  policy, 
it  has  received  comparatively  little  discussion  in  the  courts  or 
before  the  commission.  In  115  Fed.  588  (1902),  this  section  was 
construed  by  the  court,  Hammond,  J.,  in  the  western  district  of 
Tennessee,  in  a  charge  to  the  grand  jury.  He  said  that  the  stat- 
ute contemplated  two  methods  of  pooling,  both  of  which  were 
prohibited.  First  a  physical  pooling,  which  means  a  distribu- 
tion by  the  carriers  of  property  offered  for  transportation  on 
different  and  competing  railroads  in  the  proportions  and  on  the 
percentages  previously  agreed  upon;  and  secondly,  a  money 
pooling,  which  is  described  best  in  the  language  of  the  statute, 
*'to  divide  between  them  (different  and  competing  railroads) 
the  aggregate  or  net  proceeds  of  the  earnings  of  such  railroads, 
or  any  portion  thereof."  The  court  in  its  charge  adopted  the 
definition  of  the  word  "pool"  from  the  Century  dictionary,  as: 

"It  is  a  combination  intended  by  concert  of  action  to  make 
or  control  changes  in  the  market  of  rates;  *  *  *  a  combina- 
tion of  the  interests  of  several   otherwise   competing  parties, 


§    300]  THE   INTERSTATE   COMMERCE    ACT.  391 

such  as  rival  transportation  lines,  in  which  all  take  common 
grounds  as  regards  the  public,  and  distribute  the  profits  of  the 
business  among  themselves  equally  or  according  to  special  agree- 
ment. In  this  sense  pooling  is  a  system  of  reconciling  confiicting 
interests  and  obviating  competition  by  which  the^  several  com- 
peting parties  or  companies  throw  tlieir  revenues  into  one  com- 
mon fund,  which  is  tlicn  divided  or  distributed  among  the  mem- 
bers of  the  pool  on  a  basis,  percentage  or  proportion  previously 
agreed  upon  or  determined  bj^  arbitration." 

The  agreement  of  the  Southern  Railway  and  Steamship  As- 
sociation provided  for  a  division  of  territory  between  eastern 
and  western  lines,  and  also  a  system  of  fines  and  penalties 
among  the  members  for  violation  of  the  association  rules.  The 
commission  said  in  6  I.  C.  C.  R.  105,  that  these  fines  and  penalties 
are  available  as  substitutes  for  the  penalties  which  would  be  ex- 
acted under  a  regular  pooling  system,  and  that  the  arrangement 
was  tantamount  to  a  combination  forbidden  by  the  section,  and 
that  the  law  had  regard  to  the  substance  rather  than  to  the  form, 
and  that  whatever  it  prohibited  from  being  done  directly  could 
not  legally  be  done  indirectly. 

§  300.  Controlling  through  routing  by  initial  carrier  is  not 
pooling. — In  the  Southern  California  Fruit  Case,  9  1.  C.  C.  Rep. 
182,  the  commission  found  there  was  a  tonnage  pool  in  traffic  as 
between  the  connecting  carriers  and  that  the  through  routing 
was  controlled  so  as  to  give  specific  percentages  of  traffic  to 
their  said  connections.  This  view  was  sustained  by  the  circuit 
court  (S.  D.  of  Cal.),  123  Fed.  597,  and  132  Fed.  829.  which 
rendered  judgment  for  the  enforcement  of  the  commission's 
order,  that  the  carrier  should  desist  from  this  practice  of  con- 
trolling the  through  routing.  The  supreme  court  in  Southern 
Pacific  et  al.  v.  Interstate  Commerce  Commission,  200  U.  S.  356, 
50  L.  Ed.  585  (1906),  reversed  this  judgment,  holding  that 
there  was  nothing  in  the  act  w^hich  prevented  carriers  from 
agreeing  upon  a  through  routing  of  the  freight  and  of  insisting 
upon  the  right  of  routing  as  a  condition  of  guaranteeing  through 
rates  to  the  shipper.  It  seems  that  the  rule  was  intended  to 
break  up  rebating  and  in  practical  operation  had  been  effective 
to  that  end. 

Subsequent  to  this  decision,  by  the  amendment  of  1910,  this 
right  of  controlling  the  through  routing  was  secured  to  the 
shipper  (see  section  15,  infra). 


392  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    5 

§  301  (229).  Agreements  not  within  the  prohibition. — An 

agreement  for  the  division  of  through  freights  between  the 
members  of  a  trunk  line  is  not  within  the  prohibition  of  this 
section.  Neitlier  is  an  agreement  for  consultation  for  the  pro- 
motion of  reasonable  rates.  6  I.  C.  C.  R.  85.  In  this  case  the 
commission  ruled  that  the  agreement  of  the  transcontinental 
association  was  not  witliin  the  prohil)ition  of  the  section,  as 
there  was  no  provision  for  the  actual  pooling  of  freights  or 
division  of  earnings  between  the  parties,  and  it  was  not  shown 
by  the  agreement  itself  or  other  evidence  that  the  measures 
provided  therein  for  fixing  and  maintaining  rates  constituted 
a  conti'act,  agreement  or  combination  in  violation  of  section  5, 
or  that  those  measures  if  carried  out  in  good  faith  for  the  pur- 
pose named,  would  lead  indirectly  to  the  same  result  as  the  ac- 
tual pooling  of  freights  and  division  of  earnings  prohibited 
by  the  act. 

The  operation  and  conduct  of  the  Immigrant  Bureau  of  the 
Western  Passenger  Association,  whereunder  the  immigrant 
traffic  was  divided  between  the  carriers  in  the  agreed  propor- 
tion based  upon  the  proportion  of  the  domestic  passenger  traffic 
done  by  each  line,  was  not  within  the  prohibition  of  the  section. 
10  I.  C.  C.  R.  13.  The  commission  said  that  the  section  forbade 
a  division  of  the  aggregate  or  net  proceeds  of  the  earnings  of 
such  competing  railroads,  whether  such  earnings  arise  from 
freight  or  passenger  business,  but  for  some  reason  it  did  not 
provide  specifically  against  a  division  of  passengers  between  com- 
peting roads.  The  amount  of  the  immigrant  traffic  was  insignifi- 
cant compared  with  the  general  traffic  of  the  railroads,  and  there 
was  no  discriminations  agaiast  individuals,  as  the  immigrants 
were  forwarded  at  the  domestic  published  rates  and  that  the 
arrangements  had  eventually  prompted  the  protection  and 
greatly  improved  the  comfort  and  treatment  of  immigrants.  The 
commission  declined  therefore  to  take  any  action  in  the  premises. 

It  would  therefore  follow  that  the  prohibition  of  this  section 
must  be  limited  to  an  actual  pooling  of  freights  of  competing 
railroads  or  the  division  of  earnings,  and  would  not  include 
agreements  between  carriers  looking  to  the  convenient  and 
expeditious  handling  of  their  business  at  terminal  points  which 
are  not.  for  revenue  and  therefore  not  subject  to  the  specific 
prohibition  of  this  section  or  of  the  Anti-Trust  Act.  See  infra, 
§  432  et  seq. 


§    302]  THE   INTERSTATE   COMMERCE   ACT.  393 

§  302  (230).  The  relation  of  the  section  to  the  Anti-Trust 
Law  of  1890. — Tlic  prohibitiou  ol'  pooling  contained  in  tliis 
section  lias  been  considered  in  connection  with  the  judicial  dis- 
•cussiou  of  the  prohibition  of  all  forms  of  conil)ination  whether  of 
trusts  or  otherwise  in  restraint  of  interstate  commerce  con- 
tained in  the  Anti-Trust  Law  of  1890. 

This  section  prohiI)its  only  tlic  specific  form  of  comlnnation 
which  comes  under  the  definition  of  poolin<?,  and  it  is  limited 
to  such  agreements  made  by  a  common  carrier  subject  to  the 
provisions  of  the  act  "with  any  other  common  carrier  or  car- 
riers." Thus  it  was  ruled  in  the  case  of  a  complaint  allcgiu.f? 
an  agreement  for  the  pooling  of  freight  between  certain  railroads 
and  the  Standard  Oil  Company,  5  I.  C.  C.  R.  415,  4  Int.  Com. 
Rep.  1G2,  that  such  an  agreement  for  the  pooling  of  traffic  be- 
tween a  carrier  by  rail  and  a  carrier  by  pipe  line  did  not  fall 
within  the  description  of  contracts  prohibited  by  section  5.  In 
the  opinion  as  to  the  relation  of  express  companies  to  the  act. 
ruling  that  tliej'  were  not  included  therein  (see  section  1, 
supra),  the  commission  said  that  the  prohibition  of  section  5 
did  not  include  express  companies,  Avho  were  therefore  at  liberty 
to  pool  their  earnings.  1  I.  C.  C.  R.  349,  1  Int.  Com.  Rep.  677. 
This  was  prior  to  their  inclusion  in  the  act  hy  the  amendment  of 
1906,  supra,  §  138. 

In  United  States  v.  Trans-Missouri  Freight  Association.  166 
U.  S.  290,  41  L.  Ed.  1007,  it  was  urged  that  as  the  Commerce 
Act  related  solely  to  railroads  and  their  proper  regulation  and 
management,  the  act  of  1890  should  be  construed  as  applying 
to  all  contracts  of  the  nature  therein  described,  entered  into  by 
any  other  than  competing  common  carriers  by  railroads  for 
the  purpose  of  establishing  rates  of  traffic  and  transportation. 
But  the  court  said  that  the  fifth  section  of  the  Interstate  Com- 
merce x\et  prohibited  what  was  termed  "pooling,"  because  prior 
to  the  passage  of  the  act  railroad  companies  had  some  times 
endeavored  to  regulate  competition  and  maintain  rates  by  pool- 
ing arrangements,  and  in  the  act  that  kind  of  arrangement  was 
forbidden,  and  while  that  act  did  not  ]irohibit  such  an  agreement 
as  that  of  tlie  Trans-^Iissouri  Freiglit  Association,  it  did  not 
authoi-ize  it,  and  both  statutes  stand,  as  neither  was  inconsistent 
with  the  other.  The  court  said  that  the  amendment  of  the  In- 
terstate Connnerce  Act  would  not  liave  been  an  appropriate 
method  of  dealing  with  other  devices  to  suppress  competition 


394  TPIE    INTERSTATE    COMMERCE    ACT.  [SECTION    5 

for  the  reason  that  the  xVnti-Triist  Act  included  other  parties 
than  common  carriers.     (See  act  of  1890,  infra,  §  432  et  seq. 

In  the  bill  filed  by  the  government  in  1910  in  eastern  district 
of  ]\lissouri  against  the  Western  Trunk  lines  to  enjoin  the  pro- 
posed general  advance  in  freight  rates,  wherein  a  temporary 
injunction  was  issued,  it  was  alleged  that  the  advance  was  made 
pursuant  to  an  agreement  and  combination  violative  of  the  Anti- 
Trust  Act.  As  the  railroads  agreed  to  withdraw  the  proposed 
advance,  and  refile  the  same  after  the  pending  amendatory  act 
went  into  effect,  the  suit  was  dismissed. 

In  complaints  by  shippers  and  others  before  the  commission 
it  has  been  on  several  occasions  charged  that  their  rates  were 
the  result  of  an  agreement  between  the  carriers  in  violation  of 
the  Anti-Trust  Act,  and  that  this  raised  a  presumption  that  the 
rates  were  unreasonable,  but  the  commission  has  uniformly  ruled 
that  it  has  no  powers  in  the  enforcement  of  that  act,  and  that 
there  was  no  presumption  of  unreasonableness  under  the  In- 
terstate Commerce  Act,  if  the  rates  were  established  in  conse- 
quence of  an  agreement  between  competing  carriers.  20  I.  C. 
C.  E.  463,  465. 

§  303  (231).  Pooling  as  a  defense  to  action  of  the  carrier. — 
In  L.  L.  &  W.  R.  Co.  v.  Frank  et  al.,  110  Fed.  689  (1901),  the 
United  States  circuit  court  for  the  western  district  of  New  York, 
denied  an  injunction  against  certain  ticket  brokers  as  to  special 
excursion  tickets  issued  for  the  Pan-American  Exposition  at 
Buffalo  on  the  ground  that  the  complainant  with  other  rail- 
roads had  made  an  unlawful  combination  for  the  fixing  of 
rates  and  pooling  earnings. 

A  contrary  ruling  however  has  been  made  in  the  United 
States  circuit  court  for  the  eastern  district  of  Missouri,  unre- 
ported, and  in  Kinner  v.  Lake  Shore  &  Michigan  So.  Ry.  Co.,  69 
Ohio  St.  Rep.  339,  on  the  ground  that  the  alleged  unlawful 
combination  did  not  relate  to  the  specific  business  sought  to- 
be  enjoined. 


§    304]  THE   INTERSTATK   COMMERCE   ACT.  395; 


Section  6. 

§  304.  Sertion  6  as  amended. 

305.  History  and  amendment  of  the  section. 

306.  Effect  of  publication. 

307.  The  published  rate  conclusive. 

308.  Failure  to  post  rate  in  stations. 

309.  Claims  for  misrouting. 

310.  Status  of  carriers,  as  shippers  or  consignees. 

311.  What  is  included  in  schedules. 

312.  What  is  sufficient  publication  and  filing. 

313.  Joint  tariffs  and  through  rates. 

314.  Responsibility  for  through  rates. 

315.  Published  joint  rates  must  be  duly  authorized. 

316.  The  commission's  power  of  modification  as  to  filing  of  tariffs. 

§  304.  Section  6  as  amended. — Sec.  6.  (Amended  March  2, 
1889.  Folloiving  section  suhsfiluted  June  29,  1906.  Amended 
June  18,  1910.)  That  every  common  carrier  subject  to  the  pro- 
visions of  this  Act  shall  file  with  the  commission  created  by  this 
Act  and  print  and  keep  open  to  public  inspection  schedules 
showing  all  the  rates,  fares,  and  charges  for  transportation  be- 
tween different  points  on  its  own  route  and  betw^een  points  on 
its  own  route  and  points  on  the  route  of  any  other  carrier  by 
railroad,  by  pipe  line,  or  by  water  when  a  through  route  and 
joint  rate  have  been  established.  If  no  joint  rate  oyer  the 
through  route  has  been  established,  the  several  carriers  in  such 
through  route  shall  file,  print,  and  keep  open  to  the  public  in- 

[PrJntliifC  and  postiiiK  of  sohedules  of  ratCN,  fares  and 
charges  InoludinK  rules  and  ro«iiIatious  alTeotlnK  the  same, 
ielne,  siorase  and  terminal  eharges,  and  freight  elassifl- 
eations.l 

spection,  as  aforesaid,  the  separately  established  rates,  fares  and 
charges  applied  to  the  through  transportation.  The  schedules 
printed  as  aforesaid  by  any  such  common  carrier  shall  plainly 
state  the  places  between  which  property  and  passengers  will 
be  carried,  and  shall  contain  the  classification  of  freight  m 
force,  and  shall  also  state  separately  all  terminal  charges,  stor- 
age charges,  icing  charges,  and  all  other  charges  which  the  Com- 
mission may  require,  all  privileges  or  facilities  granted  or  al- 
lowed and  any  rules  or  regulations  which  in  any  wise  change, 
affect,  or  determine  any  part  or  the  aggregate  of  such  aforesaid 
rates,'  fares,  and  charges,  or  the  value  of  the  service  rendered 
to  the  passenger,  shipper,  or  consignee.  Such  schedules  shall 
be  plainly  printed  in  large  type,  and  copies  for  the  use  of  the 
public  shall  be  kept  posted  in  two  public  and  conspicuous  places 


396  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    6 

in  every  depot,  station,  or  office  of  such  carrier  where  passen- 
gers or  freight,  respectively,  are  received  for  transportation,  in 
snch  form  tliat  they  shall  be  accessible  to  the  public  aiicl  can  be 
conveniently  inspected.  The  provisions  of  this  section  shall  ap- 
j)ly  to  all  traffic,  transportation,  and  facilities 'defined  in  this  Act. 

[Printing  ninl   posting'   of  schedules   of  rates  ou   freislit   car- 
rie«l   through   a   foreign  country.] 

Any  common  carrier  subject  to  the  provisions  of  this  Act  re- 
ceiving freight  in  the  United  States  to  be  carried  through  a 
foreign  country  to  any  place  in  the  United  States  shall  also  in' 
like  manner  print  and  keep  open  to  public  inspection,  at  every 
depot  or  office  where  such  freight  is  received  for  shipment, 
schedules  showing  the  through  rates  established  and  "charged  by 
such  common  carrier  to  all  points  in  the  United  States  beyond 
the  foreign  country  to  which  it  accepts  freight  for  shipment ; 

iFreisht  suhjeet  to  customs  duties  in  ease  of  failure  to  pub- 
lish  through   rates.] 

and  any  freight  shipped  from  the  United  States  through  a  for- 
eign country  into  the  United  States  the  through  rate  on  which 
shall  not  have  been  made  public,  as  required  by  this  Act,  shall, 
l)efore  it  is  admitted  into  the  United  States  from  said  foreign 
country,  be  subject  to  customs  duties  as  if  said  freight  were  of 
foreign  production. 

[Thirty     days'     public    notice    of    change     in     rates    must    be 
given.] 

No  change  shall  be  made  in  the  rates,  fares,  and  charges  or 
joint  rates,  fares,  and  charges  which  have  been  filed  and  pub- 
lished by  any  commion  carrier  in  compliance  with  the  require- 
ments of  this  section,  except  after  thirty  days'  notice  to  the 
Commission  and  to  the  public  published  as  aforesaid,  which  shall 
plainly  state  the  changes  proposed  to  be  made  in  the  schedule 
then  in  force  and  the  time  when  the  changed  rates,  fares,  or 
charges  will  go  into  effect ;  and  the  proposed  changes  shall  be 
shown  by  printing  new  schedules,  or  shall  be  plainly  indicated 
upon  the  schedules  in  force  at  the  time  and  kept  open  to  pub- 

[ Commission    may    modify    requirements    of    this    section.] 

lie  inspection:  Provided,  That  the  Commission  may,  in  its  dis- 
cretion and  for  good  cause  shown,  allow  changes  upon  less  than 
the  notice  herein  specified,  or  modify  the  requirment  of  this 
section  in  respect  to  publishing,  posting,  and  filing  of  tariffs, 
either  in  particular  instances  or  by  a  general  order  applicable  to 
special  or  peculiar  circumstances  or  conditions. 

[Joint    tarilVs   must    specify   names   of    carriers    participating. 
Evidence    of   concurrence.] 

The  names  of  the  several  carriers  which  are  parties  to  any 
joint  tariff  shall  be  specified  therein,  and  each  of  the  parties 
1  hereto,  other  than  the  one  filing  the  .same,  shall  file  with  the 
Commission  such  evidence  of  concurrence  therein  or  acceptance 
'tereof  as  may  be  required  or  approved  by  the  Commission,  and 


§  304]  TiiK  i\ti;kstate  commerce  act.  307 

where  such  evidence  of  concurrence  or  acceptance  is  filed  it  shall 
not  be  necessary  for  the  carriers  filinj?  the  same  to  also  tile  copies 
of  the  tariffs  in  which  they  are  named  as  parties. 

l('<i|ileH    of    <-<>n<riic4M,    >iu;rfOiiiciitM    or    iirriiiiureiiieniN    rcliiliiiK 
to   trnflie   iiiiiHt    Im'   IIUmI    wltU    ConiiiiiM.Nion.  | 

Every  coiuiiion  carrier  subject  to  this  Act  shall  al.so  lile  with 
said  Conunission  copies  of  all  contracts,  acrreements,  or  arrange- 
ments with  otlier  conmion  carriers  in  relation  to  any  traffic  af- 
fected by  tlie  provisions  of  this  Act  to  which  it  may  be  a  party. 

[Co  III  mi. S.Hi  on    iimy    prfHfrllu'    f«irms    of    sfli«'<liile.l 

The  Coiimiission  nuiy  determine  and  pi-cscribe  the  form  in 
which  the  schedules  rc(|uired  by  this  section  to  be  kept  0{)en  to 
public  inspection  shall  be  prepared  and  arranged  and  may 
change  the  form  from  time  to  time  as  shall  be  found  expedient. 

fXo  t-nrrlor  .sliiiM  t'li^xKi'  1"  trjiii>i|»orl«(i'<>ii   niilesN  it  llIeH  and 
liiihliwlics    rnH's,    fiirt-s,    iid    <'iiHr;n'M    t  Imtcoii.  I 

No  carrier,  unless  otherwise  i)rovided  l)y  this  Act,  shall  en- 
gage or  participate  in  the  transportation  of  passengers  or  prop- 
erty, as  defined  in  this  Act,  unless  the  rates,  fares,  and  charges 
upon  whicli  the  same  are  transported  by  said  carrier  have  been 
filed  and   published   in  accordance  with   the  provisions  of  this 

(I'liblislipd   rate.s   not   to   Ite  deviated    froni.l 

Act;  nor  shall  any  carrier  charge  or  demand  or  collect  or  re- 
ceive a  greater  or  less  or  different  compensation  for  such  trans- 
portation of  passengers  or  property,  or  for  any  service  in  con- 
nection therewith,  between  the  points  named  in  such  tariffs  than 
the  rates,  fares,  and  charges  which  are  specified  in  the  tariff  filed 
and  in  effect  at  the  time ;  nor  shall  any  carrier  refund  or  remit 
in  any  manner  or  by  any  device  any  portion  of  the  rates,  fares, 
and  charges  so  specified,  nor  extend  to  any  shipper  or  person 
any  privileges  or  facilities  in  the  transportation  of  ])assengers  or 
property,  except  such  as  are  specified  in  such  tariffs:  Provided, 

["Carrier"   meaiLs    "foninioii    earri«T."l 

That  wherever  the  word  "carrier"  occurs  in  this  Act  it  sliall  be 
held  to  mean  "common  carrier." 

iPreferenoe  and  «'xi»edition  €»f  military  tratlio  in  tinu'  of  tvar.l 

That  in  time  of  war  or  threatened  war  preference  and  pre- 
cedence shall,  upon  the  demand  of  the  President  of  the  United 
States,  be  given,  over  all  other  traffic,  to  the  transportation  of 
troops  and  material  of  war,  and  carriers  shall  adopt  every  means 
within  their  control  to  facilitate  and  expedite  the  military  traf- 
fic. 

[Conimi.Nsion   may   reject   scliediileM.] 

The  Conmiission  may  reject  and  refuse  to  file  any  schedule 
that  is  tendered  for  filing  which  does  not  ])rovide  and  give  law- 
ful notice  of  its  effective  date,  and  any  schedule  so  rejected  by 
the  Conunission  shall  be  void  and  its  use  sliall  lie  unlawful. 

[I'oiialty    for   failure   to   <'oin|«ly   with    reurnlalion.l 

In  case  of  failure  or  refusal  on  the  part  of  any  carrier,  re- 
ceiver, or  trustee  to  comiily  with   the  terms  of  any  regulation 


398  THE    INTERSTATE    COMMERCE    ACT,  [SECTION    6 

adopted  and  promulgated  or  any  order  made  by  the  Commission 
under  the  provisions  of  this  section,  such  carrier,  receiver,  or 
trustee  shall  be  liable  to  a  penalty  of  five  hundred  dollars  for 
^ach  such  offense,  nnd  twenty-five  dollars  for  each  and  every  day 
of  the  continuance  of  such  offense,  which  shall  accrue  to  the 
United  States  and  may  be  recovered  in  a  civil  action  brought  by 
the  United  States. 

[Carrier  to  furnish  written  statement  of  rate.l 

If  any  common  carrier  subject  to  the  provisions  of  this  Act, 
after  written  request  made  upon  the  agent  of  such  carrier  here- 
inafter in  this  section  referred  to,  by  any  person  or  company  for 
a  written  statement  of  the  rate  or  charge  applicable  to  a  described 
shipment  between  stated  places  under  the  schedule  or  tariff's  to 
which  such  carrier  is  a  party,  shall  refuse  or  omit  to  give  such 
written  statement  within  a  reasonable  time,  or  shall  misstate  in 
writing  the  applicable  rate,  and  if  the  person  or  company  making 
such  request  suffers  damage  in  consequence  of  such  refusal  or 

[Danm^es  for  niisstatomeiit   of  rate.l 

omission  or  in  consequence  of  the  misstatement  of  the  rate,  either 
through  making  the  shipment  over  a  line  or  route  for  which  the 
proper  rate  is  higher  that  llie  rate  over  another  available  line 
or  route,  or  through  entering  into  any  sale  or  other  contract 
whereunder  such  person  or  company  obligates  himself  or 
itself  to  make  such  shipment  of  freight  at  his  or  its  cost,  then 
the  said  carrier  shall  be  liable  to  a  penalty  of  two  hundred  and 
fifty  dollars,  which  shall  accrue  to  the  United  States  and  may 
be  recovered  in  a  civil  action  brought  by  the  United  States. 

I  Name  of  earrier's  anent   to   be  yosteil.! 

It  shall  be  the  duty  of  every  carrier  by  railroad  to  keep  at 
all  times  conspicuously  posted  in  every  station  where  freight  is 
received  for  transportation  the  name  of  an  agent  resident  in 
the  city,  village,  or  town  where  such  station  is  located,  to  whom 
application  may  be  made  for  the  information  by  this  section  re- 
quired to  be  furnished  on  written  request;  and  in  case  any  car- 
rier shall  fail  at  any  time  to  have  such  name  so  posted  in  any 
station,  it  shall  be  sufficient  to  address  such  request  in  sub- 
stantially the  following  form :  ' '  The  Station  Agent  of  the 

Company  at  Station,"  together  with  the  name  of  the 

proper  post-officPi.  inserting  the  name  of  the  carrier  company  and 
of  the  station  in  the  blanks,  and  to  serve  the  same  by  depositing 
the  request  so  addressed,  with  postage  thereon  prepaid,  in  any 
post-office. 

§  305.  History  and  amendment  of  the  section. — This  section 
has  been  extensively  amended;  first  in  1889,  in  the  first  series 
of  amendments  made  to  the  act,  which  provided  for  printing 
of  the  schedule   and  posting  in   two   public   and   conspicuous 


§    30G]  THE   INTERSTATE   COMMERCE   ACT.  390 

places,  pro]iil)itcd  rodnetion  of  rates  without  three  days'  notice, 
and  made  a  more  specific  provision  as  to  the  power  of  the  Com- 
mission in  prescribing  different  schedules,  rates,  fares  and 
charges. 

The  section  was  also  amended  by  the  so-called  Elkins  Act 
of  1903  {infra,  §  422),  in  the  requirement  of  publipation  and 
the  invariable  application  of  the  tariff  rates,  making  the  rate 
conclusive  as  against  the  carrier. 

In  the  amendments  of  1906,  the  section  was  substantially  re- 
written. The  important  changes  were,  first,  the  requirement  of 
the  same  publication  of  the  joint  rate  as  of  the  separate  rates. 
Theretofore  the  measure  of  publicity  given  to  joint  rates  was  pre- 
scribed by  general  order  of  the  commission.  Second,  change  in 
the  rates,  either  separate  or  joint,  was  prohibited  except  after 
thirty  days  notice,  while  before  the  amendment,  ten  days  notice 
was  required  of  an  increase  and  three  days  notice  of  a  decrease. 
Third,  the  requirement  of  a  separate  printing  and  posting,  not 
only  of  terminal  charges  and  all  other  charges  which  the  com- 
mission might  require,  and  all  privileges  or  facilities  granted 
or  allowed.  Fom-th,  the  requirement  as  to  posting  and  notice 
could  be  modified  on  good  cause  shown. 

The  section  was  also  amended  by  the  act  of  1910,  in  author- 
izing the  commission  to  reject  any  schedule  tendered  for  filing 
which  did  not  provide  an  effective  date.  The  failure  of  a  car- 
rier to  comply  with  the  terms  of  any  regulation  adopted  under 
the  section  was  penalized,  and  tlie  carrier  was  required  to  fur- 
nish a  written  statement  of  rate  on  request,  made  subject  to 
damages  for  any  mistake  or  omission  of  a  rate,  and  it  was  made 
the  duty  of  the  carrier  to  keep  the  name  of  its  agent  posted  in 
its  station  where  freight  was  received  for  transportation. 

The  importance  of  these  successive  changes  should  be  con- 
sidered in  connection  with  the  decisions  of  the  commission  and 
of  the  court  construing  the  section  at  the  different  periods. 

§  306  (234.)  Effect  of  publication. — In  Gulf,  Colorado  & 
Santa  Fe  Railroad  Co.  v.  lletley.  158  U.  S.  98.  39  L.  Ed.  910 
(1895),  the  supreme  court  decided  that  all  railroads  carrying  in- 
terstate freight  were  subject  to  the  provisions  of  the  act  to  regu- 
late commerce,  and  that  the  only  rule  of  compensation  which  can 
be  followed  in  regard  to  interstate  shipments  in  the  rate  ex- 


400  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    6 

pressed  in  tariffs  published  at  stations  and  filed  with  the  com- 
mission in  accordance  with  the  requirements  of  the  act.  In 
this  case  there  was  conflict  between  the  Texas  law  containing 
a  provision  for  recoverj'^  of  a  penalty  in  the  case  of  a  violation, 
while  the  federal  statute  prohibits  carriers  from  deviating 
from  tariff  rates  published  and  on  file,  and  providing  penalties 
for  any  departure  therefrom.  The  coiu't  held  that  these  two 
statutes  prescribing  a  different  rule  on  the  subject-matter,  ex- 
posed a  party  to  a  conflict  of  duties,  and  that  in  the  case  of  an 
interstate  shipment,  the  state  law  must  yield. 

As  to  the  effect  of  the  published  rates  upon  the  standard  of 
reasonableness  in  an  action  at  law  for  alleged  unreasonable 
charges,  see  supra,  section  1. 

Contracts  and  tariffs  filed  with  the  commission  under  this 
section  may  be  considered  in  any  proceeding  before  the  com- 
mission, although  not  specifically  introduced  in  evidence  on  the 
hearing.  4  I.  C.  C.  R.  664,  3  Int.  Com.  Rep.  493.  The  reduc- 
tion of  passenger  rates  without  consent  of  connecting  lines,  over 
which  tickets  are  sold,  and  without  filing  schedules  with  the 
commission  was  ruled  in  violation  of  this  section.  2  I.  C.  C.  R. 
513,  2  Int.  Com.  Rep.  340. 

The  filing  of  schedules  of  rates  w4th  the  commission  as  re- 
quired by  statute  raises  no  presumption  as  to  the  legality  of 
such  rates,  and  no  omission  or  failure  to  challenge  or  disap- 
prove the  schedules  of  rates  so  filed  can  have  the  effect  of  mak- 
ing rates  lawful  wdiich  are  unreasonable.  4  I.  C.  C.  R.  104^ 
8  Int.  Com.  Rep.  138. 

"When  a  schedule  is  filed  announcing  an  advance  of  general 
application,  for  which  no  apparent  reason  exists,  such  action 
is  a  proper  subject  of  investigation,  and  if  it  thereupon  appears 
that  the  advance  is  unwarranted,  the  commission  will  proceed 
to  correct  the  injustice.  9  I.  C.  C.  R.  382.  It  is  the  duty  of 
the  carrier  to  apply  the  rate  as  published,  and  wdiere  it  ap- 
pears in  the  complaint  before  the  commission  that  a  contract 
was  made  for  a  lower  charge  than  published,  the  contract  is 
not  binding  and  its  violation  furnishes  no  ground  for  redress 
under  the  act.  See  9  I.  C.  C.  R.  216.  The  commission  said  that 
that  question  had  been  decided  by  the  supreme  court  in  the 
Hefley  Case,  supra.  See  amendatory  act  of  February  19,  1903, 
infra,  §  422,  making  the  failure  to  publish  the  tariff,  or  to  strictly 


'^    307]  THE    INTERSTATE    CO-M-MHKtE    ACT.  401 

observe  the  tariff,  until  ehanj^od,  a  misdemoanor,  and  also  de- 
claring the  published  rate  conclusively  deemed  to  be  the  legal 
rate. 

It  was  held  in  United  States  v.  DeCoursey  82  Fed.  302  (1897), 
that  a  receiver  is  not  criminally  liable  under  this  section  for 
violation  of  a  joint  tariff  previously  established  by  a  railroad 
eompanj^  of  which  he  is  receiver  and  another  company  which 
he  has  not  ratified,  adopted  or  recognized  in  any  way. 

§  307.  The  published  rate  conclusive. — Under  this  section 
before  its  anieudineiit  in  I'JOG,  it  was  held  by  the  supreme  court 
in  Texas  Pacific  R.  Co.  v.  IMugg,  202  U.  S.  24,  and  50  L.  Ed. 
620,  May  24,  1906,  reversing  the  Texas  civil  court  of  appeals. 
98  Tex.  352,  that  a  carrier  could  exact  the  regular  rate  for  an 
interstate  shipment  as  shown  by  its  published  and  printed  sched- 
ule on  file  with  the  Interstate  Commerce  Commission  and  posted 
in  the  station  of  the  carrier,  although  a  lower  rate  had  been 
quoted  by  the  carrier  to  the  shipper  and  shipped  under  such 
lower  rate  so  quoted.  The  court  said  that  this  was  within  the 
principle  of  the  decision  of  the  Hefley  Case,  supra.  It  was 
said  by  the  commission  in  17  I.  C.  C.  R.  418,  that  the  pub- 
lished rate  governing  transportation  between  two  given  points, 
so  long  as  it  remains  uncanceled,  is  as  fixed  and  unalterable 
either  by  the  commission  or  by  the  carrier,  as  if  that  particular 
rate  had  been  establislied  by  a  special  act  of  congress.  "When 
regularly  published  it  is  no  longer  the  rate  imposed  upon  the 
carrier,  but  the  rate  imposed  by  law. 

The  commission  in  its  annual  report,  1908,  p.  16,  in  comment- 
ing upon  this  decision  of  the  supreme  court  in  the  ^lugg  Case, 
said  that  tlie  theory  of  the  act  was  that  the  shipper  could  at  all 
times  by  reference  to  the  schedules  ascertain  for  himself  the  rate, 
but  that  in  practice  it  v»^as  quite  different,  as  the  tariffs  were  very 
voluminous ;  and  that  it  had  been  found  practically  impossible  to 
comply  with  the  literal  requirement  of  the  statute  as  to  the  post- 
ing ;  that  in  a  great  majority  of  cases  the  ordinary  sliipper  could 
not  without  special  experience  ascertain  for  himself  from  an  in- 
spection of  the  tariffs  what  the  rates  are,  and  he  inust  rely  on  the 
statement  of  the  railroad  agent,  and  added : 

"The  commission  feels  that  to  require  the  shipper  to  ascertain 
for  himself  at  his  peril  the  rate  imposed  upon  him  an  undue 
26 


402  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    6 

burden.  The  railway  should  know  what  its  established  charges 
are,  and  may  fairly  be  required  to  state  in  writing,  when  a  writ- 
ten request  is  made  by  the  shipper,  the  rate  which  it  has  pub- 
lished and  maintains  in  force.  We  call  special  attention  to  this 
matter  as  one  of  immediate  and  general  concern,  which  discloses 
the  need  of  an  appropriate  remedy,  and  urgently  request  that  a 
suitable  measure  be  promptly  enacted." 

The  amendment  of  1910  provides  for  a  penalty  of  $250  to  ac- 
crue to  the  United  States  to  be  recovered  by  civil  action  against 
the  carrier  brought  by  the  United  States,  for  any  misstatement 
by  the  carrier  as  to  the  rates  whereby  the  shipper  suffers  dam- 
age.* Whether  any  remedy  is  available  to  the  shipper  for  such 
damage  has  not  been  judicially  determined.  See  §  308,  infra. 
The  commission  has  ruled  (18  I.  C.  C.  R.  299)  that  it  has  no 
power  under  the  Act  to  award  such  damages  to  the  shipper. 

Any  unpublished  rate  made  by  the  agent  of  a  carrier,  whether 
through  mistake  or  otherwise,  is,  therefore,  unenforcible  by  the 
carrier  or  shipper;  and  decisions,  such  as  the  Pondecker  Lumber 
Co.  V,  Spencer,  86  Fed.  846  (1898),  and  certain  state  decisions 
sustaining  recovery  by  the  shipper  in  such  cases,  would  seem  to 
be  inapplicable  under  the  construction  of  this  section  as  amended. 
See  Armour  Packing  Co.  v.  U.  S.,  C.  C.  A.  eighth  circuit,  153 
Fed.  18  (1907). 

The  word  "different,"  included  by  the  amendment  of  1906  in 
the  prohibition  against  the  carrier  charging  any  other  than  the 
schedule  rate,  extends  this  prohibition  to  any  evasion  by  indirec- 
tion of  the  fundamental  requirement  of  publicity  of  rates,  con- 
formity thereto  and  equality  in  such  rates  to  all  similarly  condi- 
tioned. The  practice  of  using  transportation  in  payment  of  ad- 
vertising services  and  claims  was  condemned  by  the  supreme 
court  as  violative  of  this  section.  See  supra,  §  156.  The  sec- 
tion does  not  repeal  section  22,  nor  impair  the  power  of  the 
carrier  as  thus  recognized  to  adjust  its  rates  to  different  classes 
and  conditions. 


*  It  was  said  in  the  report  of  the  house  committee  on  interstate  and 
foreign  commerce,  in  reporting  the  amended  bill  of  1910,  that  the  "bill 
does  not  provide  for  any  redress  to  the  shipper  who  may  have  suffered 
loss  on  account  of  misquotation  of  the  tariff  rate,  for  the  reason  that 
it  has  so  far  seemed  impracticable  to  find  any  method  of  so  doing  with- 
out opening  a  loophole  for  the  allowance  of  secret  rebates  in  such  man- 
ner as  would  be  practically  unprovable  in  criminal  proceedings. 


§    309]  THE   INTERSTATE   COMMERCE    \CT.  403 

§  308.  Failure  to  post  rates  in  stations. — In  Texas  Pacific  R. 
Co.  V.  Cisco  Oil  Mill,  204  IJ.  S.  449,  52  L.  Ed.  562  (1907),  it 
was  claimed  that  a  rate  schedule  not  having  been  lawfully 
posted  in  public  and  conspicuous  depots,  waiting  rooms,  offices 
etc.,  was  itself  unlawful  and  therefore  not  binding  upon  the 
carrier.  The  court  said  that  the  contention  was  without  merit 
and  that  the  requirenient  of  posting  was  not  a  condition  pre- 
cedent to  the  establishment  and  putting  in  force  the  tariff  of 
rates,  but  it  was  a  provision  based  upon  the  existence  of  an  es- 
tablished rate,  and  had  for  its  definite  object  the  affording  of 
special  facilities  to  the  public  for  ascertaining  the  rates  actually 
in  force. 

The  court  added:  ''"Whether  by  the  failure  to  post  an  estab- 
lished schedule,  a  carrier  became  subject  to  penalties  provided  in 
the  act  to  regulate  coimnerce,  or  whether,  if  damage  had  been  oc- 
casioned to  a  shipper  by  such  omission,  a  right  to  recover  on  that 
ground  alone  would  have  obtained,  we  are  not  called  upon  in  this 
case  to  decide." 

This  decision  was  prior  to  the  amendment  of  1910  which  ex- 
pressly penalizes  any  failure  by  the  carrier  to  perform  its  duty 
or  any  misstatement  whereby  a  shipper  suffers  damage. 

This  decision  was  construed  and  applied  by  the  commission  in 
14  .  C.  C.  R.  82 ;  and  it  declined  to  allow  a  refund  to  the  shipper, 
where  the  delay  in  posting  the  tariff  was  due  to  unforeseen  causes, 
though  the  carrier  was  willing  to  pay  the  amount  claimed,  saying 
that  it  was  an  unpleasant  duty  to  deny  such  request,  and  thus 
prevent  shippers  from  receiving  refunds  which  the  carrier  was 
willing  to  pay,  but  that  the  issuance  of  such  authority  woidd  be 
in  contravention  of  the  terms  or  purposes  of  the  law  and  would 
establish  a  wrongful  precedent. 

§  309.  Claims  for  Misrouting'. — It  follows  therefore  that 
the  published  rates  are  conclusive  upon  both  the  carrier  and 
the  shipper,  that  the  misrepresentation  by  the  agent  of  a  car- 
rier as  to  the  rates  is  not  binding  on  the  carrier  although  he  is 
thereby  misled  to  his  oaau  injury,  18  I.  C.  C.  R.  299,  that  is,  a 
shipper  is  bound  by  the  publislied  rate  whatever  other  remedy 
he  may  have  for  the  misrepresentation. 

In  case  of  through  routing,  as  the  shipper  is  entitled  to  the 
lowest  published  rate  between  the  points  of  shipment,  the  initial 
carrier  is  bound  to  ship  via  the  road  having  the  lowest  rate  and 


404  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    6 

is  liable  on  claim  of  reparation  to  the  shipper  for  failure  to  do 
so.  17  I.  C.  C.  E.  44.3,  18  I.  C.  C.  R.  190.  In  case  the  shipper 
gives  instructions  as  to  the  route  of  shipment  the  initial  carrier 
is  justified  in  follo\^dng  instructions,  even  though  a  higher  rate 
applies  on  such  route  than  Avas  available  between  another  road 
between  the  same  points.  12  I.  C.  C.  E.  469,  18  I.  C.  C.  299.  If 
the  shipper  is  in  doubt  as  to  what  route  provides  the  lowest  rate 
to  the  terminal  point,  he  should  tender  the  traffic  to  the  initial 
carrier  without  instructions  as  to  the  specific  route  and  he  is  then 
entitled  to  the  lowest  rate.     18  I.  C.  C.  E.  190. 

In  17  I.  C.  C.  E.  588,  the  commission  ruled  that  if  an  initial 
carrier  files  and  posts  a  rate  making  joint  rates  from  stations 
upon  its  lines  to  destination  upon  a  connection  line  in  which 
tariff  a  connecting  line  does  not  occur,  the  initial  line  thereby 
becomes  responsible  to  the  shipper  under  its  tariff.  If  the  ship- 
per is  compelled  to  pay  under  rates  legally  in  effect  a  greater 
transportation  charge  than  that  named  in  the  tariff,  he  may 
recover  from  the  initial  carrier  the  difference,  certainly  if  the 
rate  posted  by  it  is  found  to  be  reasonable. 

Every  carrier  party  to  a  joint  rate  is  jointly  and  severally 
responsible  for  that  rate,  and  those  carriers  who  actually  par- 
ticipate in  the  transportation  under  a  joint  rate,  are  jointly 
and  severally  liable  for  damages  for  unreasonableness  of  that 
rate ;  and  a  complainant  is  not  deprived  of  his  right  to  a  reason- 
able rate  by  the  fact  that  the  defendants,  through  neglect  of 
the  rules  of  the  commission  as  to  the  publication  of  their  tariffs, 
had  failed  to  establish  that  rate  in  legal  form.  See  also  17  I. 
C.  C.  E.  379. 

A  carrier  voluntarily  establishing  a  through  rate  less  than 
the  sum  of  the  locals  after  a  shipment  has  moved,  does  not 
ipso  facio  become  liable  for  the  difference  between  the  amount 
charged  and  the  amount  which  would  have  been  collected,  if 
the  through  rate  had  been  in  effect  at  the  time  of  the  removal. 
17  I.  C.  C.  E.  295. 

The  same  principle  applies  whether  the  claim  for  reparation 
is  made  by  a  shipper  or  an  offer  to  refund  is  made  by  a  carrier. 
Thus,  in  17  I.  C.  C.  E.  461,  the  commission  refused  to  grant 
leave  to  a  carrier  to  refund  to  a  shipper  the  difference  between 
the  class  rate  paid  and  a  reduced  commodity  rate,  though  the 
shipper  had  been  informed  by  the  carrier  that  the  reduced  rate 


§    310]  THE   INTERSTATE   COMMERCE   ACT.  405 

was  in  force;  and,  being  informed  of  tlu;  coi-rcct  rate  before  the 
shipment,  on  advice  of  the  carrier  the  shipper  allowed  the  ship- 
ment to  go  forward  on  the  carrier's  agreeing  to  apply  for  au- 
thority to  make  the  refund.  The  commission  said  that  to  grant 
the  refund  in  such  a  case  would  do  away  with  the  published 
tariff  altogether. 

Claims  of  reparation  are  determined  upon  the  principle  of 
knowledge  which  the  sliipper  is  conclusively  presumed  to  have 
as  to  tlie  published  rates.  In  case  of  through  routing  it  has 
been  held  that  a  carrier  is  criminally  responsible  under  the 
Elkins  Act  (see  infra,  §  422),  for  failure  to  ob.serve  a  through 
rate  with  which  it  participates  although  it  filed  no  written 
agreement  therein.  In  such  cases  the  shipper  could  not  be  con- 
clusively charged  with  knowledge  of  the  parties  to  the  through 
route  and  rate. 

§  310.  Status  of  carriers  as  shippers  or  consignees. — A  very 
considerable  volume  of  the  interstate  railroad  traffic  of  the 
country  is  that  of  shipments  for  railroads  themselves  who  may 
be  shippers  or  consignees.  The  commission  has  had  occasion  in 
several  cases  to  consider  the  status  of  a  carrier,  which  is  a  ship- 
per or  consignee  as  well  as  a  transporter  and  the  duty  and  re- 
sponsibility of  other  carriers  in  routing  such  shipments,  and 
the  commission  has  expressed  its  \'iew  in  Rule  225  Conference 
Rulings  Bulletin  No.  5  (1909)  : 

**In  answer  to  inquiries  the  commission  expresses  the  opin- 
ion, that  under  the  law  a  carrier,  or  a  person  or  corporation 
operating  a  railroad  or  other  transportation  line,  may  not,  as  a 
shipper  over  the  lines  of  another  carrier,  be  given  any  prefer- 
ence in  the  application  of  tariff  rates  on  interstate  shipments, 
but  it  may  lawfully  and  properly  take  advantage  of  legal  tariff 
joint  rates  applying  to  a  convenient  junction  or  other  point  on 
its  own  line,  provided  such  sliipments  are  consigned  through  to 
such  ])oint  from  point  of  origin  and  are,  in  good  faith  sent  to 
such  billed  destination.  In  other  words,  one  carrier  shipping  its 
fuel,  material,  or  other  supplies  over  the  lines  of  another  carrier 
must  pay  the  legal  tariff  rates  applicable  to  the  same  commodities 
shipped  by  an  individual,  but  when  a  carrier  is  the  consignee 
of  a  shijuuent  of  its  own  property  which  moves  under  a  joint 
rate  and  is  to  participate  in  the  haul  of  same  via  its  ovni  line, 
routing  instructions  of  consignor  to  a  specified  junction  point 
on  the  line  of  consignee  carrier  must  be  observed.  There  may 
be  some  instances,  such  as  the  movement  of  needed  fuel,  in  which. 


406  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    6 

in  order  to  keep  the  trains  or  boats  moving,  snch  traffic  could 
temporarily  be  given  preference  in  movement  without  creating 
unjust  or  unwarranted  discrimination. 

'*  "Where  stock  in  one  carrier  company  is  owned  by  another 
carrier  company,  but  both  maintain  separate  organizations  and 
report  separately  to  the  commission,  they  may  not  lawfully 
carry  property  free  for  each  other." 

For  applications  of  these  rulings  in  cases  of  misrouting  claims 
against  the  initial  carrier  in  shipment  of  property  where  car- 
rier was  the  consignee,  see  21  I.  C.  C.  R.  p.  280,  where  repara- 
tion was  awarded  for  damages  resulting  from  misrouting  ship- 
ment of  lumber.  In  21  I.  C.  C.  R.  270,  the  commission  con- 
demned the  practice  of  applying  a  portion  of  a  joint  rate  from 
the  point  of  origin  to  the  point  of  destination,  to-wit,  that  por- 
tion from  the  point  of  origin  to  the  junction  point,  for  the  use 
of  a  particular  shipper  which  is  not  published  for  the  benefit 
at  large  nor  filed  with  the  Interstate  Commerce  Commission  un- 
der section  6.  But  the  commission  said  that  nothing  therein 
was  to  be  construed  as  denying  the  carriers  themselves  the  bene- 
fits of  through  rates  on  company  material  according  to  lawfully 
published  tariffs.  In  another  case,  21  I.  C.  C.  R.  290,  it  was 
said  that  a  carrier  was  liable  for  damages  resulting  from  a  dis- 
regard of  a  shipper's  specific  routing  instructions,  even  though 
it  sends  a  shipment  via  a  route  taking  a  lower  rate  to  the  orig- 
inally billed  destination,  and  that  it  was  no  part  of  the  carrier's 
duty  to  speculate  upon  the  reasons  which  actuated  such  instruc- 
tions and  assume  that  they  do  not  express  the  shipper's  desire. 
See  also  21  I.  C.  C.  R.  270. 

§  311.  What  is  included  in  schedules. — The  section  provides 
for  the  publication,  not  only  of  the  charges  for  carriage,  but 
for  a  separate  statement  of  terminal  charges,  storage  charges, 
icing  charges  and  all  other  charges  which  the  commission  may 
require,  all  privileges  and  facilities  granted  or  allowed,  or  any 
rules  and  regulations  which  in  any  wise  change,  affect  or  de- 
termine any  part  of  the  aggregate  of  such  aforesaid  rates,  fares, 
and  charges,  or  the  value  of  the  service  rendered  to  the  shipper 
or  consignee. 

In  the  Grand  Haven  Cartage  Case,  supra,  the  supreme  court 
said,  quoting  the  opinion  of  the  commission,  that  cartage  was 
in  general  a  terminal  expense,  and  was  not  in  general  assumed 


§    312]  THE   INTERSTATE   COMMERCE   ACT.  407 

by  the  carrier.  That  it  was  informed  by  tlie  report  of  tlie  con- 
mission  for  1889  that  there  were  many  railroad  companies 
throiip-hout  the  country  which  furnished  cartage  at  their  sta- 
tions, but  that  in  no  instance  did  the  rate  slieets  or  schedules 
contain  anything  to  that  effect.  At  that  time  the  statute  made  no 
such  requirement.  The  court  sug'gested  that  it  was  proper  for 
the  commission  to  include  the  cartage,  if  furnished,  as  one  of 
the  terminal  charges.  The  commission  acted  upon  the  sug- 
gestion (see  7  I.  C.  C.  Rep.  592;  8  I.  C.  C.  Rep.  5G0),  and  made 
a  general  order  February  8,  1898,  requiring  a  statement  of 
cartage  and  other  terminal  services.  For  the  views  of  the  com- 
mission on  this  subject,  see  also  10  I.  C.  C.  Rep.  352,  and  9  I. 
C.  C.  Rep.  1. 

As  to  the  requirement  of  the  separate  publication  of  terminal 
charges,  see  also  Interstate  Commerce  Commission  v.  Stickney, 
snpra,  §  153,  where  it  was  held  by  the  supreme  court  that 
terminal  charges  for  the  delivery  of  live  stock  at  the  Union 
Stock  Yards  in  Chicago,  must  be  separately  stated  in  tariff 
schedules.  See  also  decision  of  the  circuit  court  of  appeals, 
seventh  circuit,  AValker  v.  Keenan,  snpra,  where  it  was  held 
that  a  railroad  could  post  a  schedule  for  a  separate  terminal 
charge  of  a  fixed  sum  for  a  car  for  delivery  to  the  stock  yards 
where  located  off  its  own  lines. 

The  requirement  of  separate  schedules  is  also  illustrated  in 
Baltimore  &  Ohio  R.  R.  Co.  v.  Hamberger,  et  al.,  155  Fed.  8-19 
(1907),  circuit  court  of  Va.,  where  it  was  held  that  the  failure 
to  insert  in  the  schedule  a  limitation  of  non-transferability  of 
passenger  tickets,  made  such  a  provision  in  the  ticket  void,  and 
hence  the  railroad  could  not  thereafter  maintain  a  suit  to  en- 
join the  transfer  of  the  ticket. 

§  312  (237).  What  is  sufficient  publication  and  filing.— 
Schedules  of  joint  tariffs  required  to  be  filed  with  the  commis- 
sion need  not  be  duplicated  by  each  company  which  unite  in 
making  them.  1  I.  C.  C.  R.  225,  1  Int.  Com.  Rep.  598.  The 
receipt  of  a  written  statement  from  each  company  acknowledg- 
ing the  authority  for  filing  the  tariff  on  its  behalf  is  sufficient. 
The  posting  of  notices  in  a  railroad  station,  that  all  rates  are 
on  file  in  the  office  of  the  station  agent  and  may  be  examined 
on  application  to  the  agent,  is  not  sufficient.  7  I.  C.  C.  R. 
43.    9  I.  C.  C.  R.  221. 


408  THE    INTERSTATE    COMMERCE    ACT,  [SECTION    6 

Shippers  and  consignees  cannot  depend  for  the  lawful  rate 
and  charge  upon  statements,  as  they  must  be  guided  by  the  pub- 
lislied  rates  themselves,  and  the  schedules  must  therefore  be 
sufficient  to  give  the  necessary  information.    7  I.  C.  C.  R.  255. 

The  only  satisfactory  method  of  publishing  rates,  6  I.  C.  C. 
R.  488,  is  to  definitely  state  the  charges  fixed  between  points 
clearly  specified,  without  burdening  and  confusing  the  public 
with  the  need  of  making  of  involved  calculations  or  with  an- 
alyzing a  series  of  statements  to  determine  whether  a  particular 
rate  has  been  changed  since  the  particular  tariff  was  issued. 
Thus  published  tariffs  specifying  rates  upon  standard  articles, 
as  vegetables  shipped  from  Florida,  should  state  plainly  the 
weight  or  dimensions  of  the  crate  to  which  the  rate  should  ap- 
ply.   8  I.  C.  C.  R.  585. 

Rules  or  regulations  which,  if  enforced,  would  result  in 
changing  or  affecting  rates  or  charges  show^n  on  published 
schedules,  must  be  notified  to  the  public  for  the  time  required 
by  law  for  other  rate  changes.  The  notice  should  set  forth  the 
changes  proposed  to  be  made  in  the  schedules  then  in  effect, 
and  such  changes  must  be  shown  by  printing  new  schedules 
or  be  plainly  indicated  upon  the  schedules  in  force  at  the  time. 
7  I.  C,  C,  R.  255.  As  to  publication  and  filing  of  rate  sched- 
ules, see  annual  report  of  commission  of  1904,  p.  64. 

§  313  (238),  Joint  tariffs  and  through  rates. — An  important 
change  made  by  the  amendment  of  1906  was  the  requirement  in 
the  same  publication  of  a  joint  rate  as  of  separate  rates.  Prior  to 
this  the  publication  of  joint  rates  had  been  regulated  by  orders  of 
the  commission,  which,  by  order  of  ]\Iarch  23,  1889,  prescribed 
that  the  carriers  should  publish  their  joint  rates  as  separate  indi- 
%'idual  roads  were  required  by  law  to  do.    See  9  I.  C.  C.  R.  182. 

In  1907  (see  12  I.  C  C.  R.  164)  the  commission  had  a  hearing 
at  the  request  of  various  shippers  and  railroads  with  reference  to 
the  construction  of  this  amendment  of  1906,  and  particularly 
with  reference  to  the  matter  of  through  rates,  which  should 
govern  shipments  over  more  than  one  railroad  where  no  joint  rate 
had  been  made.     (See  also  report  of  1907,  p.  75), 

The  commission  ruled  that  when  a  through  route  has  been 
formed,  the  rate  charged  is  a  through  rate  and  the  shipment  will 
move  upon  the  rate  existing  at  the  time  it  is  billed  by  the  initial 
carrier.    Any  increase  or  decrease  made  in  the  through  rate  after 


§    314]  THE   INTERSTATE   COMMERCE   ACT.  409 

the  (late  of  shipment,  is  not  applicable  to  such  through  ,sliii)iiient. 
A  through  route  is  a  continuous  line  of  railway  formed  by  an 
arrangement,  express  or  implied,  between  connecting  carriers.  A 
through  bill  of  lading  is  conclusive  evidence  of  the  existence  of  a 
through  route,  nnder  the  principle  established  in  the  Social 
Circle  Case,  162  U.  S.  184,  supra;  L.  &  N.  R.  Co.  v.  Behlmer,  175 
U.  S.  650,  svpra.  '  A  through  route  must  have  a  through  rate  for 
every  service  that  it  offers.  If  a  through  rate  is  established 
notice  must  be  given  to  the  world  of  such  arrangement  by  publi- 
cation. If  no  through  rate  is  established  over  a  through  route  the 
sum  of  the  locals  will  make  up  the  rate.  5  I.  C.  C.  R.  44,  3  Int. 
Com.  Rep.  706. 

As  to  jurisdiction  of  commission,  under  amendments  of  1906 
and  1910  to  establish  through  routes  without  consent  of  carriers, 
see  infra,  section  15  of  act. 

"When  the  rates  established  applying  between  the  points  with- 
in a  single  state  are  applied  as  part  of  combination  rates  in  trans- 
portation between  different  states,  such  state  rates,  as  well  as 
the  interstate  rates  with  which  they  are  combined,  must  be 
published  and  filed  as  provided  by  section  6.  See  also  as  to 
application  of  the  section,  8  I.  C.  C.  R.  316. 

So  passenger  excusion  rates  are  required  to  be  published  and 
filed.    3  I.  C.  C.  R.  465,  2  Int.  Com.  Rep.  729. 

§  314  (129).  Responsibility  for  through  rates.— When  rail- 
road companies  make  a  through  and  continuous  line  and  offer  it 
for  the  use  of  the  publie,  the  commission  has  ruled  that  they  can- 
not rid  themselves  of  responsibility  for  unjust  charges  by  break- 
ing the  haul  in  two  and  calling  themselves  carrier  of  the  separate 
€nds  of  their  through  line.  Through  and  continuous  lines  im- 
ply through  rates,  which  must  be  reasonable  rates,  and  suitable 
instrumentalities  of  shipment  and  carriage.  6  I.  C.  C.  R.  378. 
.  The  commission,  in  2  1.  C.  C.  R.  131  and  2  Int.  Com.  Rep.  78, 
applied  this  principle  to  the  Pennsylvania  railroad  company, 
which  operated  a  part  of  a  through  line  and  owns  a  controll- 
ing interest  in  the  capital  stock  of  a  connecting  line,  the  Pitts- 
burgh, Cincinnati  &  St.  Louis,  and  the  commission  ruled  that 
the  Pennsylvania  Railroad  Company  could  not  free  itself  of 
the  responsibility  for  the  through  rates  by  hiding  behind  the 
corporation  of  the  other  company  as  a  separate  carrier. 

The  carrier  however  does  not  assume  responsibility  for  rates 


410  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    6 

made  by  a  connecting  road  because  merely  of  its  giving  them 
in  connection  with  its  own  rates  by  way  of  information  to  par- 
ties desiring  to  make  through  shipments.  1  I.  C.  C.  R.  401,  and 
1  Int.  Com.  Rep.  703.  In  the  absence  of  some  agreement  or 
understanding  with  a  connecting  line,  by  which  the  joint  tariff 
rates  is  authorized,  the  carrier  cannot  lawfully  publish  or  apply 
any  other  rates  than  those  fixed  for  transportation  between 
the  points  reached  by  its  railroads,  and  it  cannot  publish  the 
sum  as  a  rate  to  points  on  the  line  of  another  carrier  without  its 
consent.  Such  a  through  rate  is  not  a  joint  rate,  for  joint  rates 
can  be  made  only  by  concurrence  or  assent,  and  it  is  not  a 
combination  rate,  for  one  of  its  component  parts  is  not  a  sub- 
ject for  a  separate  charge.  There  must  be  lawful  rates  for  each 
of  the  roads  before  there  can  be  a  lawful  combination  of  rates. 
It  has  been  held  that  where  the  lines  of  several  railroad  cor- 
porations are  conducted  as  a  single  system  for  the  purpose  of 
traffic  between  different  points  originating  on  either,  and  such 
corporations  divide  the  profits  of  such  business  on  a  mileage 
basis,  the  several  corporations  as  to  such  business  are  partners 
liable  to  third  persons  on  the  principles  of  the  law  of  agency. 
See  Lehigh  Valley  R.  Co.  v.  Dupont,  C.  C.  A.  2nd  Circuit,  128 
Fed.  840  (1904).  But  the  fact  that  a  railroad  company  owns 
stock  and  bonds  of  another  railroad  does  not  show  partnership  or 
agreement  to  run  the  roads  of  the  latter  on  a  common  account. 
See  Pennsylvania  R.  Co.  v.  Jones,  155  U.  S.  333,  39  L.  Ed.  176 
(1894). 

§  315  (239).  Published  joint  rates  must  be  duly  authorized. 

The  only  rates,  which  a  carrier  is  authorized  to  publish,  are  its 
own  local  rates,  that  is,  to  points  on  its  own  line,  and  such 
through  rates,  as  it  is  authorized  by  agreement  with  any  eom- 
necting  carrier  to  combine  with  the  rates  of  such  carrier  ta 
points  on  its  line.  It  cannot  lawfully  add  to  the  duly  estab- 
lished rates  of  another  carrier  any  amount  it  pleases  less  than 
its  own  local  rates,  and  publish  and  use  them  the  same  as  a 
through  rate  to  points  on  the  line  of  another  carrier  without 
its  consent.  Such  a  through  rate  is  not  a  joint  rate,  for  joint 
rates  can  be  made  only  by  concurrence  or  assent,  nor  is  it  a 
combination  rate,  for  one  of  its  component  parts  has  no  legal 
existence   or   sanction   as   a   through   rate   or   through   charge. 


§    316]  THE   INTERSTATE   COMMERCE    ACT.  411 

There  must  be  lawful  rates  upon  each  of  the  roads  before  there 
can  be  a  lawful  combination  of  rates.  This  was  ruled  in  a 
case,  7  I,  C.  C.  R.  323,  where  the  receivers  of  a  road  connect- 
ing with  the  New  York,  New  Haven  &  Hartford  railroad, 
published  what  purported  to  be  a  joint  tariff  of  coal  rates  from 
the  point  on  its  road  to  a  number  of  destinations  reached  by 
the  New  York  &  New  Haven  road,  whereby  the  complainant 
company  received  its  full  local  charges  to  said  destinations 
from  the  junction  points  with  defendant's  road,  and  the  defend- 
ant accepted  the  remainder,  which  was  in  each  instance  less 
than  the  established  local  rate  from  the  place  of  shipment  ta 
the  point  of  connection.  The  New  York  &  New  Haven  road 
which  carried  coal  to  the  same  destinations  by  a  longer  route 
over  its  own  rails  thereby  securing  greater  compensation  than 
was  afforded  to  it  by  coal  coming  to  it  from  defendant's  road, 
refused  to  unite  in  these  rates  published  by  the  connecting  car- 
riers so  unauthorized  and  its  complaint  w-as  sustained.  Commis- 
sioner Clemens  dissented,  saying  that  a  carrier  could  make  and 
publish  through  rates  to  points  on  a  connecting  line  less  than 
its  regular  locals,  provided  the  rates  on  its  own  line  were  duly 
filed  and  published  and  are  themselves  just  and  reasonable  and 
are  not  in  themselves  unjustly  discriminative  against  local 
shippers. 

§  316.  The  commission's  power  of  modification  as  to  filing 
of  tariffs. — The  proviso  allowing  the  commission  to  allow 
changes  in  rates  less  than  a  thirty  days'  notice,  and  to  modify 
the  requirements  of  the  section  as  to  posting  and  filing  tariffs, 
either  in  particular  instances  or  by  a  general  order,  applicable 
to  special  instances,  on  good  cause  shown,  was  inserted  in  the 
amendment  of  1906,  because  it  was  found  that  a  literal  enforce- 
ment of  the  "posting"  provisions  and  of  the  thirty  day  notice 
in  the  matter  of  import  and  export  rates  and  of  special  excur- 
sion rates,  would  be  impracticable.  It  was  not  clear  that  the 
excursion  rates  under  section  22  were  changes  under  this  clause 
but  the  commission  ruled  that  they  were  so  subject.  The  com- 
mission made  an  exhaustive  investigation  upon  the  subject  of 
import  and  export  rates  (see  10  I.  C.  C.  Rep.  55),  and  there  said 
that  the  practical  difficulty  arose  from  tlie  fact  that  ocean  rates 
from  the  ports  are  not  under  the  control  of  the  commission  and 


412  THE    INTERSTATE    COMMERCE    ACT.  [SECTION    6 

are  constantly  vaiying;  that  the  rate  varied  from  day  to  day, 
and  sometimes  from  hour  to  hour.  The  same  kind  of  merchan- 
dise may  be  carried  in  the  same  vessel,  even  for  the  same  person, 
at  different  charges  for  the  transportation.  See  the  full  discus- 
sion of  this  subject  in  the  report  of  the  commission  for  1904, 
page  49.  The  purpose  of  this  proviso  was  therefore  to  make  the 
section  adaptable  to  commercial  conditions  and  environments. 
See  annual  report  for  1905,  page  8. 


318]  THE   INTERSTATE    CO.M.MKUCE   ACT.  415 


Section  7. 

§  317.  Continuous  carriage  of  freights  from  place  of  shipment  to  place 
of  destination. 
31S.  Judicial  application  of  section. 

§  317  (241).  Continuous  carriage  of  freights  from  place  of 
shipment  to  place  of  destination. — Si:c.  7.  That  it  shall  he  un- 
lawful for  any  common  carrier  subject  to  the  provisions  of  this 
act  to  enter  into  any  combination,  contract,  or  agreement,  ex- 
pressed or  implied,  to  i^revent,  by  change  of  time  schedule,  car- 
riage in  different  cars,  or  by  other  means  or  devices,  the  carriage 
of  freights  from  being  continuous  from  the  place  of  shipment  to 
the  place  of  destination;  and  no  break  of  bulk,  stoppage  or 
interruption  made  by  such  common  carrier  shall  prevent  the 
carriage  of  freights  from  being  and  being  treated  as  one  continu- 
ous carriage  from  the  place  of  shipment  to  the  place  of  destina- 
tion, unless  such  break,  stoppage,  or  interruption  was  made  in 
good  faith  for  some  necessary  purpose,  and  without  any  intent 
to  avoid  or  unnecessarily  interrupt  such  continuous  carriage  or 
to  evade  any  of  the  provisions  of  this  act. 

§  318  (242).  Judicial  application  of  section. — This  section 
which  has  not  been  amended  prohibiting  any  combination 
for  preventing  the  continuitj^  of  traffic  and  providing  for 
the  continuous  carriage  of  freights  from  the  place  of  ship- 
ment to  the  place  of  destination,  is  to  be  considered  in 
connection  with  the  provision  of  section  3  concerning  the 
interchange  of  traffic  (supra,  §  278).  which  has  been  con- 
strued as  leaving  the  carriers  free  to  make  arrangements 
for  through  traffic  among  themselves.  It  was  said  by  the  com- 
missicn  in  a  case,  10  I.  C.  C.  R.  188,  that  in  view  of  this 
construction  of  section  3  of  the  act,  it  was  not  clear  what  the 
seventh  section  was  intended  to  accomplish,  and  that  possibly 
congress  had  in  mind  that  railways  might  attempt  to  interrupt 
traffic  at  state  lines,  thereby  depriving  the  traffic  of  the  character 
of  interstate  business,  and  that  the  seventh  section  may  have 
been  intended  to  prevent  this.  The  commission  was  clear  that 
it  added  nothing  to  the  third  section  in  support  of  the  claim  made 
requiring  the  defendant  carrier  to  deliver  its  cars  to  another 
carrier. 

This  section  has  also  been  cited  in  the  cases  wherein  the  courts 
have  been  asked  to  protect  interstate  carriers  against  interfer- 
ence by  unlawful  combinations.    See  chai)ter  VI,  supra. 


414  THE   INTERSTATE    COMMERCE   LAW.  [SECTION    8 


Section  8. 

§  31&.  Liability  of  common  carriers  for  damages. 

320.  Right  of  action  based  on  the  statute. 

321.  Plaintiff  must  show  injury. 

322.  Allowance  of  attorney's  fee  as  costs. 

323.  Limitation  of  actions. 

324.  Assignability  of  claims.  • 

325.  The  jurisdiction  of  federal  courts. 

326.  Jurisdiction  of  the  federal  courts  in  equity  under  the  act. 

327.  Jurisdiction  in  equity  for  protection  of  interstate  commerce. 

§  319  (243).  Liability   of  common   carrier  for  damages. — 

See.  8.  That  in  case  any  common  carrier  subject  to  the  pro- 
visions of  this  act  shall  do,  cause  to  be  done,  or  permit  to  be 
done  any  act,  matter,  or  thing  in  this  act  prohibited  or  declared 
to  be  unlawful,  or  shall  omit  to  do  any  act,  matter,  or  thing  in 
this  act  required  to  be  done,  such  common  carrier  shall  be  liable 
to  the  person  or  persons  injured  thereby  for  the  full  amount  of 
damages  sustained  in  consequence  of  any  such  violation  of  the 
provisions  of  this  act,  together  with  a  reasonable  counsel  or  at- 
torney's  fee,  to  be  fixed  by  the  court  in  every  case  of  recovery, 
which  attorney's  fee  shall  be  taxed  and  collected  as  part  of  the 
costs  in  the  case. 

§  320  (244).  Right  of  action  based  on  the  statute. — Section 
8  and  succeeding  section  9  which  have  not  been  amended,  pro- 
vide for  private  actions  at  law  for  damages  by  persons  injured 
by  violations  of  the  provisions  of  the  act,  and  are  the  only 
provisions  of  the  act  directly  relating  to  such  private  actions 
in  the  courts.  Their  importance  is  very  much  qualified  by 
the  construction  given  to  the  remedial  features  of  the  act 
xmder  the  amendments  of  1906  and  1910  by  the  recent  deci- 
sions of  the  supreme  court,  see  section  9,  infra.  Some  of  the  cases 
cited  under  this  section  were  decided  prior  to  these  amendments, 
and  the  judicial  construction  of  the  act  following  thereon.  These 
sections  were  construed  in  Parsons  v.  C.  &  N.  W.  R.  Co.,  167  U. 
S.  447,  42  L.  Ed.  231  (1897),  affirming  11  C.  C.  A.  489,  68  Fed. 
903,  an  action  for  alleged  discrimination  in  shipping  grain  from 
Iowa  to  Chicago  on  account  of  differential  rates  granted  to  ship- 
pers from  Nebraska.  The  court  said  that  the  cause  of  action  was 
hased  entirely  on  the  statute,  and  to  enforce  what  was  in  its 


§    321]  THE    INTERSTATE    COMMERCE   LAW.  41 0 

rrature  a  penalty  imposed  on  aceonnt  of  tlie  wrongful  conduct  of 
the  defendant.  One  who  is  seeking  to  recover  a  pen  .y  is  bound 
by  the  rules  of  strict  law,  as  no  violation  of  the  statutes  was  to 
be  presumed  and  he  must  make  out  a  case  showing  not  by  way 
of  inference,  but  clearly  and  directly,  such  violations.  Such  a 
suit  was  distinguished  from  the  case  of  a  party  who  had  been 
charged  and  compelled  to  pay  an  unreasonal)le  rate.  The  right  of 
a  shipper,  who  pays  reasonable  rates,  to  recover  from  such  com- 
pany the  excess  of  such  payment  over  the  rates  charged  to  ship- 
pers of  similar  goods  to  the  same  destination  from  another  place 
of  shipment  for  the  same  or  greater  distance  from  it,  is  a  right 
growing  out  of  the  Interstate  Commerce  Act,  and  being  in  the 
nature  of  a  penalty,  can  be  enforced  only  by  strict  proof  show- 
ing clearly  and  directly  the  violations  complained  of. 

§  321  (245).  Plaintiff  must  show  injury.— Under  this  sec- 
tion the  common  carrier  is  liable  only  to  the  person  or  persons 
injured  thereby  for  the  full  amount  of  damages  sustained  in  con- 
sequence of  the  violation  of  the  act.  The  supreme  court  said 
in  the  case  cited  that  as  the  only  right  of  recovery  given  by 
the  act  to  the  individual  was  for  the  amount  of  damages  sus- 
tained, the  party,  before  he  can  recover  under  the  act,  must 
show  not  merely  the  wrong  of  the  carrier,  but  that  the  wrong 
has  operated  to  his  injury.  Thus  it  is  not  sufficient  to  show 
the  failure  to  publish  the  tariff  rates,  as  provided  by  section 
six,  but  it  must  be  further  shown  that  this  non-publication  op- 
erated to  his  injury.  Penalties  are  not  recoverable  on  mere 
possibilities. 

The  discriminating  rate  must  be  actually  charged  to  make 
an  offense  or  cause  of  action  under  the  act.  I\Ierely  making  or 
offering  an  illegal  rate  when  it  is  not  shown  that  an  actual 
shipment  was  made,  constitutes  no  legal  injury  to  a  shipper 
who  was  charged  a  higher  rate.  Lehigh  Valley  R.  Co.  v,  Rainey, 
112  Fed.  487  (1902),  E.  Dist.  of  Penn. 

It  was  held  in  Jmiod  v.  C.  &  AY.  R.  Co..  47  Fed.  290  (1891). 
that  where  plaintiff  is  entitled  to  the  same  rate  for  the  shorter 
as  is  afforded  other  shippers  for  the  longer  haul,  the  measure 
of  damages  is  the  difference  between  the  amounts  paid  by  each 
for  like  services,  and  that  it  is  for  the  jury  to  determine  whether 


416  THE   INTERSTATE    COMMERCE   LAW.  [SECTION    8 

they  v.'ill  allow  interest  on  the  damage;  but  if  it  is  awarded, 
it  should  be  estimated  from  the  date  of  the  last  shipment. 

§  322.  Allowance  of  attorney's  fee  as  costs. — In  Atlantic 
Coast  Line  R.  R.  Co.  v.  Riverside  Mills,  219  U.  S.  186,  55  L.  Ed. 
—  (19]  1),  it  was  held  by  the  supreme  court  that  the  allowance  of 
an  attorney's  fee,  taxable  as  costs  under  this  section,  does  not 
apply  in  case  of  an  action  by  a  shipper  against  an  initial  carrier 
for  loss  on  a  connecting  line,  wherein  the  carrier's  liability  is 
dependent  upon  the  so-called  Carmack  Amendment  of  1906  to 
sec.  20,  since  the  cause  of  action  in  such  case  is  the  loss  of  prop- 
erty which  is  in  no  way  traceable  to  a  violation  of  the  provisions 
of  the  statute  (affirming  with  modification  168  Fed.  990),  See 
§  407,  infra. 

§  323  (246).  Limitation  of  actions. — The  Interstate  Com- 
merce Act  prescribes  no  limitation  of  time  within  which  actions 
based  thereon  shall  be  instituted,  and  therefore,  vmder  R.  S., 
U.  S.  721,  the  statute  of  limitations  of  the  state  in  which  the 
action  is  brought  nuist  apply  and  control.  ^Michigan  Insurance 
Bank  v.  Eldred,  130  U.  S.  693,  32  L.  Ed.  1080  (1889).  This  was 
directly  ruled  in  Rattican  v.  Terminal  Railroad  Association,  114 
Fed.  666  (1902)  (E.  Dist.  of  Mo.),  and  in  Copp  v.  Louisville  & 
Nashville  R.  Co.,  50  Fed.  164  (1891),  Dist.  of  Ky. ;  Murray  v. 
Railroad  Co.,  35  C.  C.  A.  62,  92  Fed.  868  (1892).  In  both  cases 
the  state  statutes  of  limitations  were  held  to  apply.  AVhere 
under  the  statute  of  a  state  the  defense  of  the  statute  of 
limitations  can  be  invoked  by  the  defendant  by  demurrer, 
the  same  procedure  will  apply  in  the  federal  court.  It  was 
ruled  in  the  I\Tissouri  case,  that  an  action  to  recover  damages 
for  a  discrimination  in  violation  of  section  2  was  one  to  recover 
money  in  the  nature  of  a  penalty,  and  therefore  must  be 
brought  within  the  time  allowed  by  the  state  statutes  for  such 
action.  In  this  case  the  court  held,  that  the  allegations  of  the 
petition  Avere  not  sufficient  to  prevent  the  running  of  the  stat- 
ute, as  there  was  no  allegation  that  plaintiff  believed  and  re- 
lied on  defendant's  announcement,  that  it  made  no  discrimina- 
tion in  the  rates,  or  that  he  exercised  diligence  to  ascertain  the 
facts.  In  action  at  common  law,  not  founded  on  the  statute, 
to   recover   unreasonable    charges,   the    unreasonableness    being^ 


§    325]  TOE    INTERSTATE    COMMERCE   LAW.  417 

established  by  the  pa>Tnent  of  rebates,  it  has  been  held  that 
the  statute  of  limitation  did  not  begin  to  run  against  the  ship- 
per as  long  as  he  had  no  knowledge  of  his  rights  owing  to  the 
fault  of  the  carrier  in  concealing  the  facts.  See  Cook  v.  C,  R. 
I.  &  P.  R.  Co.,  81  Iowa,  551,  9  L.  R.  A.  764  (1890). 

As  to  the  liniitJitions  governing  proceedings  for  reparation 
before  tlie  commission,  see  infra,  section  16. 

§  324  (247).  Assignability  of  claims. — Claims  for  damages 
under  sections  8  and  9  constitute  property  rights,  which  may  be 
assigned,  so  as  to  convey  the  beneficial  interests  to  the  assignee ; 
and  suits  brought  in  the  United  States  circuit  court  under 
these  sections  are  maintainable  in  the  name  of  the  assignee 
under  provisions  of  the  law  of  the  state,  requiring  all  suits  to 
be  brought  in  the  name  of  the  real  party  in  interest.  Edmunds 
V.  Illinois  Central  R.  Co.,  80  Fed.  78  (1897). 

In  Pennsylvania  R.  R.  Co.  v.  International  Coal  ^Mining  Co.. 
supra,  it  was  held  that  a  pending  action  to  recover  damages  for 
discrimination  in  violation  of  section  2,  is  not  abated  by  a 
judicial  sale  of  plaintiff's  corporate  property,  including  the 
choses  in  action  in  such  suit;  and  proof  of  such  sale  constitutes 
no  defense  to  the  action. 

§  325  (248).  The  jurisdiction  of  federal  courts. — It  is  spe- 
cifically provided  in  section  9  that  a  person  claiming  to  be  dam- 
aged by  any  common  carrier  subject  to  the  provisions  of  the 
act  may  at  his  election  make  complaint  to  the  commission,  or 
may  bring  suit  in  any  district  or  circuit  court  of  the  United  States 
of  competent  jurisdiction.  It  follows  that  the  jurisdiction  of  the 
federal  court  Avhen  invoked  is  not  based  upon  diverse  citizenship, 
but  on  a  cause  of  action  arising  under  the  laws  of  the  United 
States.  Diverse  citizenship  therefore  is  not  necessary  to  juris- 
diction of  the  federal  court. 

In  Van  Patten  v.  C,  I\l.  &  St.  P.  R.  R.  Co.,  74  Fed.  981  (1896). 
it  was  decided  by  Shiras,  J.,  of  the  northern  district  of  Iowa, 
that  the  limitation  as  to  the  district  in  which  suit  may  be 
brought  in  the  United  States  circuit  court  contained  in  the 
Judiciary  Act  of  1887  and  1888,  did  not  apply  to  suits  brought 
under  sections  8  and  9  of  the  Interstate  Commerce  Act,  but 
that  such  suits  may  be  brought  in  any  district  in  which  the 
27 


418  THE   INTERSTATE    COMMERCE    LAW.  [SECTION    8 

defendtiut  may  be  found,  as  the  limitations  contained  in  those 
acts  are  applicable  onlj-  to  the  cases  whereof  the  state  and 
federal  courts  have  concurrent  jurisdiction,  citing  In  re  Hor- 
horst,  150  U.  S.  653,  37  L.  Ed.  1211.  It  was  said  in  the  same 
case  that  the  jurisdiction  under  these  sections  was  exclusive  in 
the  courts  of  the  United  States,  as  the  use  of  the  words  in  sec- 
tion 9  concerning  certain  courts  in  the  United  States  indicated 
that  in  the  view  of  congress  there  were  courts  in  the  United 
States  who  were  competent  to  take  jurisdiction  over  such  cases 
as  arise  under  the  provisions  of  the  act,  and  courts  not  com- 
petent to  take  jurisdiction.  But  see  Connor  v.  V.  &  M.  R.  Co., 
36  Fed.  273  (1888)  ;  Lowiy  v.  C.  B.  &  Q.  R.  R.  Co.,  46  Fed.  83 
(1888). 

In  Swift  V.  Railroad  Co.,  58  Fed.  858  (1893),  it  was  held  that 
a  court  had  no  jurisdiction  over  a  suit  under  the  act,  removed 
from  a  state  court,  where  the  state  court  had  none.  This  did 
not  apply  v>here  a  state  court  had  jurisdiction  of  the  cause  of 
action  stated  in  the  petition,  but  a  federal  question  was  raised  in 
the  answer,  which  set  up  an  alleged  discrimination  violative  of  the 
act.  See  also  Sheldon  v.  "Wabash  Railroad  Co.,  105  Fed.  785 
(1900). 

The  exclusiveness  of  the  jurisdiction  over  suits  brought  un- 
der these  remedial  sections  of  the  act  to  enforce  its  provisions 
must  be  distinguished  from  the  concurrent  jurisdiction  of  the 
state  court  over  questions  in  interstate  commerce,  not  arising 
from  or  based  upon  the  act.  Murray  v.  Railroad  Co.,  62  Fed. 
24  (1894).    See  supra,  §  44. 

§  326  (249).  Jurisdiction  of  the  federal  courts  in  equity  un- 
der the  act. — The  general  chancery  jurisdiction  of  the  circuit 
courts  of  the  United  States  in  cases  arising  under  the  Interstate 
Commerce  Act  was  sustained  by  the  supreme  court  in  the  Lennon 
Case,  166  U.  S.  548,  41  L.  Ed.  1110  (1897).  The  court  held  that 
a  bill  brought  solely  to  enforce  compliance  with  the  Interstate 
Commerce  Act,  and  to  compel  railroad  companies  to  comply  with 
such  act,  and  to  offer  proper  and  reasonable  facilities  for  the 
interchange  with  the  complainant  and  enjoining  them  from  re- 
fusing to  receive  from  complainant  for  transportation  over  their 
lines  any  cars  which  might  be  tendered,  made  a  case  arising 
under  the  constitution  and  laws  of  the  United  States,  of  which 


§    32G]  THE    INTERSTATE   COMMERCE   LAW.  419 

the  circuit  courts  had  jurisdiction.  A  case  arises  under  the  con- 
stitution and  laws  of  the  United  States  wlienever  the  plaintiff 
sets  up  a  right  wliioh  llie  parties  had  denied  to  him,  and  the  cor- 
rect decision  of  the  case  dei)ends  ui)on  the  construction  of  such 
laws. 

In  Central  Stockyards  Co.  v.  L.  &  N.  R.  Co.,  112  Fed.  823 
(1902),  which  was  a  proceeding  to  enforce  hy  injunction  riglits 
claimed  under  section  3  of  the  act,  the  court,  though  deciding 
against  the  phiintilf  on  tlie  merits,  was  of  the  opinion  that  the 
remedies  provided  in  section  9  were  exclusive  for  remedies  at 
law,  where  tlie  parties  did  not  apply  in  the  first  instance  to 
the  Interstate  Commerce  Commission  and  that  a  bill  for  injunc- 
tion to  enforce  obedience  to  the  section  would  not  lie.  The  su- 
preme court  however  in  affirming  the  judgment,  assumed,  with- 
out deciding,  that  such  rights  as  plaintiff  had,  could  be  enforced 
by  bill  in  equity.    See  192  U.  S.  568,  48  L.  Ed.  5G5  (1904). 

In  Interstate  Stockyards  Co.  v.  Indianapolis  U.  R.  Co.,  99 
Fed.  Rep.  472,  the  circuit  court  of  Indiana  sustained  the  ju- 
risdiction in  equity,  saying  that  wiiere  a  wrong  was  continuing 
in  character  and  not  susceptible  of  accurate  pecuniary  esti- 
mation and  resorts  to  actions  at  law  would  involve  a  multi- 
plicity of  suits,  none  of  which  would  end  the  litigation,  a  resort 
to  equity  was  proper. 

In  the  case  of  IMissouri  Pacific  Railway  Co.  v.  United  States, 
189  U.  S.  774,  47  L.  Ed.  811  (1903),  the  supreme  court  held 
that  prior  to  the  passage  of  the  act  of  February  19,  1903,  infra, 
§  422.  known  as  the  Elkins  Law  the  district  attorney  of  the 
United  States  under  the  direction  of  the  attorney  general  in 
pursuance  of  a  reijuest  made  by  the  commission,  was  without 
power  to  commence  a  proceeding  in  equity  against  a  railroad 
corporation  to  restrain  from  discriminating  in  its  rates  between 
different  localities  (Justices  Brewer  and  Harlan  dissenting). 
This  amcndatoiy  act  provides  for  equity  jurisdiction  in  such 
cases  where  proceedings  are  instituted  at  the  instance  of  the 
Interstate  Commerce  Commission  but  makes  no  change  in  the 
law  so  far  as  to  the  remedies  open  to  private  indi\dduals. 

The  general  chancery  jurisdiction  has  been  sustained  in 
several  cases  in  the  federal  circuit  courts  where  it  was  invoked 
by  both  railroads  and  shippers  for  the  enforcement  of  rights 
under  the  act.     For  the   equity  jurisdiction  in  protection  of 


420  THE   INTERSTATE    COMMERCE   LAW.  [SECTION    8 

rights  in  interstate  commerce  under  the  decisions  of  United 
States  supreme  court  holding  that  resort  must  be  had 
to  the  Interstate  Commerce  Commission,  where  the  matters 
are  within  the  jurisdiction  of  that  body.  See  infra,  §  330,  The 
radical  change  effected  by  those  decisions  in  the  right  to  resort 
to  the  courts  without  going  before  the  commission  makes  it  un- 
necessary to  recite  the  different  decisions  of  the  circuit  courts 
prior  thereto. 

§  327  (250).  Jurisdiction  in  equity  for  protection  of  inter- 
state commerce. — In  another  class  of  cases,  jurisdiction  in 
equity  has  been  successfully  invoked  not  only  by  the  United 
States,  as  in  the  Debs  Case,  158  U.  S.  564,  but  by  railroad  com- 
panies for  the  protection  of  interstate  commerce  against  unlaw- 
ful combinations  preventing  the  performance  by  such  railroad 
companies  of  the  duties  imposed  upon  them  by  the  statute. 
Thus  in  Toledo,  A,  A.  &  N.  W,  R.  Co.  v.  Pennsylvania  Com- 
pany, 54  Fed.  730  (1893),  Judge  Taft  in  the  northern  district  of 
Ohio,  sustained  the  equitable  jurisdiction  in  a  suit  filed  against 
several  railroad  companies  connecting  with  complainant  com- 
pany at  Toledo,  and  asking  an  order  enjoining  the  companies 
from  refusing  to  receive  and  deliver  complainant's  freight, 
such  refusal  being  threatened  on  the  ground  that  the  locomo- 
tive engineers  of  the  defendants  refused  to  handle  trains  con- 
taining such  freight  because  the  complainant  employed  on  its 
line  engineers  who  were  not  members  of  their  brotherhood. 
The  court  sustained  the  jurisdiction  irrespective  of  citizenship, 
saying  it  was  immaterial  what  rights  the  complainant  would 
have  had  before  the  passage  of  the  Interstate  Commerce  Act. 
"It  was  sufficient  that  congress  in  the  exercise  of  constitutional 
power  had  given  a  positive  sanction  of  the  federal  law  to  the 
rights  secured  in  the  statute,  and  any  action  involving  the  en- 
forcement of  those  rights  was  a  case  arising  under  the  laws  of 
the  United  States."  See  also  Ex  parte  Lennon,  166  U.  S.  548, 
supra. 

The  court  also  held  that  a  mandatory  injunction  was  a  proper 
remedy  to  restore  the  passage  of  freight  backwards  and  forward, 
as  each  carrier  had  the  right  to  enjoy  this  without  interruption. 


§    329]  THE    INTERSTATE    COMMERCE   LAW.  421 


Section  9. 

§  328.  Right  of  election  in  appealing  to  commission  or  the  court. 

329.  The  limitation  of  the  right  of  private  action  in  the  courts. 

330.  Jurisdiction  in  equity  under  the  act  as  amended. 

331.  Action  for  damages  on  account  of  discrimination. 

332.  Judicial  application  of  section. 

[Perxons  claiming  to  be  daniaKcd  may  elect  whether  to  cona- 
liliiiii  to  the  C'oinniiNMloii  or  briuK  suit  In  a  United  States 
court.] 

§  328.  Right  of  election  in  appealing  to  commission  or  the 
court, — Sec.  9.  That  any  person  or  persons  claiming:  to  be  dam- 
aged by  any  common  carrier  subject  to  the  provisions  of  this 
act  may  either  make  complaint  to  the  commission  as  hereinafter 
provided  for,  or  may  bring  suit  in  his  or  their  own  behalf  for 
the  recovery  of  the  damages  for  which  such  common  carrier  may 
be  liable  under  the  provisions  of  this  act,  in  any  district  or  circuit 
court  of  the  United  States  of  competent  jurisdiction;  but  such 
person  or  persons  shall  not  have  the  right  to  pursue  both  of  said 
remedies,  and  must  in  each  case  elect  which  one  of  the  two 
methods  of  procedure  herein  provided  for  he  or  they  will  adopt. 
In  any  such  action  brought  for  the  recovery  of  damages,  the 
court  before  which  the  same  shall  be  pending  may  compel  any 

lOtlieers  of  defendant  may  be   compelled   to   testify.] 

director,  officer,  receiver,  trustee,  or  agent  of  the  corporation  or 
company  defendant  in  such  suit  to  attend,  appear,  and  testify 
in  such  case,  and  may  compel  the  production  of  the  books  and 
papers  of  such  corporation  or  company  party  to  any  such  suit; 
the  claim  that  any  such  testimony  or  evidence  may  tend  to  crim- 
inate the  person  giving  such  evidence  shall  not  excuse  such  wit- 
ness from  testifying,  but  such  evidence  or  testimony  shall  not  be 
used  against  such  person  on  the  trial  of  any  criminal  proceed- 
ing. 

§  329.  The  limitation  of  the  right  of  private  action  in  the 
courts, — While  sections  8  and  9  of  the  act,  which  specifically 
provide  for  a  remedy  at  the  choice  of  the  shipper  either  by 
appeal  to  the  commission  or  to  the  courts  by  private  action 
against  the  carrier,  have  remained  unchanged  through  the  suc- 
cessive amendments,  the  general  scope  of  the  act  has  been  so 
radically  changed  by  these  amendments  and  the  powers  of  the 
commission  thereunder  have  been  so  materially  enlarged  that 
the  judicial  construction  of  these  sections  as  to  the  jurisdiction 


•122  THE   INTERSTATE    COMMERCE   LAW.  [SECTION    1) 

of  the  courts  to  entertain  private  actions  under  the  act  has  been 
profoundly  affected  thei-eby. 

In  Texas  &  Pacific  Ey.  Co.  v.  Abilene  Cotton  Oil  Co.,  201  U. 
S.  246,  51  L.  Ed.  553  (3907),  plaintiff  brought  suit  in  a  state  court 
in  the  state  of  Texas  to  recover  because  of  the  exaction  by  the 
carrier  on  an  interstate  shipment  of  an  alleged  unreasonable 
rate,  although  the  rate  charged  was  that  stated  in  the  schedules 
duly  filed  and  published  in  accordance  with  the  act.  The  court 
held  that  the  relief  prayed  was  inconsistent  with  the  act  to  regu- 
late commerce,  since  by  that  act  the  rates  so  filed  were  controlling 
until  they  had  been  held  to  be  unreasonable  by  the  Interstate 
Commerce  Commission  on  a  complaint  made  to  that  body.  In 
this  case  the  court  held  that  the  independent  right  of  the  indi- 
vidual to  maintain  actions  to  obtain  pecuniary  redress  for  viola- 
tions of  the  act  under  sections  9  must  be  confined  to  such  wrongs, 
as  are  consistent  with  the  context  of  the  act  to  be  redressed  with- 
out previous  action  of  the  commission;  and  that  the  provision 
of  section  22,  infra,  expressly  preserving  the  common  law  and 
statutory  remedies,  could  not  be  construed  as  continuing  for 
shippers  the  common-law  right,  the  continued  existence  of  which 
will  be  absolutely  inconsistent  with  the  provisions  of  the  statute. 

The  suit  in  this  case  was  brought  in  the  state  court,  but  the 
conclusion  of  the  court  did  not  depend  upon  that,  as  the  reason- 
ing would  apply  equally  to  a  suit  brought  in  the  circuit  court  of 
the  United  States.  See  also  Cisco  Coal  Case;  201  U.  S.  419,  51  L. 
Ed.  552  (1907). 

This  ruling  in  the  Abilene  Cotton  Oil  Case  was  reaffirmed  in 
B.  &  0.  R.  Co.  V.  United  States,  215  U.  S.  481,  54  L.  Ed.  292 
(1910),  in  a  case  involving  the  remedy  of  mandamus  specifically 
provided  under  section  23 ;  and  tlie  court  said  that  it  was  settled 
in  the  Abilene  case  that  the  right  to  c[uestion  in  the  courts  the 
rates  established  in  accordance  with  the  act  to  regulate  commerce, 
without  previous  resort  by  complaint  to  the  commission  in  order 
to  determine  their  unreasonableness,  would  be  destructive  of  the 
act,  and  therefore  was  not  permissible.  The  court  said  in  its 
opinion  that  the  Abilene  Case  was  decided  before  the  amend- 
ment of  1906  and  that  the  construction  given  in  that  case  was 
made  the  more  imperative  by  these  later  amendments  of  1906, 
as  the  commission  is  now  empowered,  and  it  is  made  its  duty, 
in  disposing  of  the  complaints,  not  only  to  determine  the  illegal- 


§    330]  THE   INTERSTATE    COMMERCE   LAW,  423 

ity  of  the  practices  alleged  to  give  rise  to  an  unjust  preference 
or  undue  discrimination,  and  to  forbid  the  same,  but  moreover 
to  direct  the  practice  to  be  followed  as  to  such  subject  for  a 
future  pei-iod  not  exceeding  two  years,  the  order  to  become  oper- 
ative without  judicial  action.  The  court  therefore  said  that  the 
primary  interferonfc  of  the  courts  with  the  administrative  func- 
tions of  the  commission  was  wholly  incompatible  with  the  act. 

The  court  said  there  was  nothing  in  the  case  of  Southern  Rail- 
road Company  v.  Tift,  206  U.  S.  428,  infra,  which  quali- 
fied the  ruling  of  the  iVbilene  Case.  See  also  section  23, 
infra.  This  ruling  has  been  followed  in  several  of  the  circuit 
courts.  See  Howard  Supply  Co.  v.  Chesapeake  &  Ohio  R.  Co., 
162  Fed.  188,  where  the  court  held  that  the  plaintiff  had  no  right 
to  sue  in  the  circuit  court  for  damages  for  an  alleged  overcharge 
until  the  commission  had  passed  upon  the  matter,  although  the 
rate  charged  was  higher  than  the  former  rate  passed  on  by  the 
commission  and  held  unreasonable. 

In  Clement  v.  L.  &  N.  R.  Co.,  153  Fed.  979  (1908),  the  circuit 
court  (E.  D.  of  La.),  held  that  the  action  by  a  shipper  to  recover 
damages  because  of  an  alleged  discrimination  in  exacting  a 
charge  from  one  class  not  required  from  another  class  for  the 
same  service,  was  not  within  the  jurisdiction  of  the  court  as  a 
case  arising  under  the  Interstate  Commerce  Act,  where  it  is  not 
alleged  that  the  charge  vfas  not  in  accordance  with  the  schedule 
of  rights  in  interstate  commerce,  whether  private  or  public,  has 
been  made  to  the  commission  to  correct  the  alleged  discrimina- 
tion. 

§  330.  Jurisdiction  in  equity  under  the  act  as  amended. — 
The  general  jurisdiction  of  courts  in  e(iuity  for  the  protection 
of  rights  in  interstate  commerce,  whether  private  or  public  has 
been  considered  in  the  cases  cited  under  the  previous  section. 

There  has  been  a  difference  of  judicial  opinion  since  the  de- 
cision of  the  supreme  court  in  the  Abilene  Cotton  Oil  case,  supra, 
as  to  the  jurisdiction  of  the  courts  under  the  law  there  declared 
to  grant  any  equitable  relief  in  relation  to  matters  which  were 
within  the  jurisdiction  of  the  commission. 

In  Southern  Railway  Co.  v.  Tift,  206  U.  S.  428,  51  L.  Ed.  1124, 
decided  in  1907,  though  the  original  suit  Avas  filed  in  1903,  the 
court  affirmed  the  decree  of  the  circuit  court  of  appeals,  fifth 
circuit,  138  Fed.  753,  affirming  an  injunction  granted  bv  the  cir- 


424  THE   INTERSTATE    COMMERCE   LAW.  [SECTION    9 

cuit  court,  southern  district  of  Georgia,  enjoining  an  interstate 
carrier  from  enforcing  an  increased  freight  rate  on  lumber.  The 
railroad  had  filed  a  demurrer  to  the  bill  for  want  of  jurisdiction 
which  was  overruled ;  but  the  court  made  an  order  that  the  com- 
plainant should  make  a  proper  application  to  the  Interstate 
Commerce  Commission,  and  the  court  would  then  entertain  a 
renewed  application  on  the  record  as  made.  Application  was 
made  to  the  commission,  which  found  that  the  advance  was  un- 
reasonable ;  and  thereupon,  upon  that  record,  the  court  enjoined 
the  enforcement  of  the  advance.  The  parties  had  made  a  stipu- 
lation that  in  the  subsequent  proceedings  in  the  court  the  circuit 
court  could  adjudge  the  amount  of  reparation  to  be  made.  The 
final  decree  in  the  circuit  court  directed  an  order  of  reference 
with  instructions  to  ascertain  the  amount  of  increase  in  rates 
paid  since  the  rate  went  into  effect. 

Eef erring  to  the  Abilene  case,  the  court  said : 

"We  are  not  required  to  say,  however,  that  because  an  action 
at  law  for  damages  to  recover  unreasonable  rates  which  have 
been  exacted  in  accordance  with  the  schedule  of  rates  as  filed  is 
forbidden  by  the  Interstate  Commerce  Act  a  suit  in  equity  is 
also  forbidden  to  prevent  the  filing  or  enforcement  of  a  schedule 
of  unreasonable  rates  or  change  to  unjust  or  unreasonable  rates. ' ' 

These  decisions  of  the  supreme  court  have  been  considered  by 
the  circuit  court  of  appeals  in  the  second,  fourth,  fifth,  seventh 
and  ninth  circuits,  and  varying  conclusions  reached  as  to  the 
jurisdiction  of  the  circuit  court  to  grant  an  injunction  against 
an  increase  of  rates  before  or  pending  an  investigation  by  the 
commission.  Thus,  while  the  power  to  grant  such  an  injunction 
was  sustained  in  the  ninth  circuit  in  Northern  Pacific  Ry.  Co. 
V.  Pacific  Coast  Lumber  Mfg.  Ass'n,  165  Fed.  1,  in  October, 
1908  (Judge  Ross  dissenting),  affirming  the  circuit  court  of 
Washington,  on  same  day,  in  the  Kalispel  Lumber  Co. 
Case,  165  Fed.  25,  an  injunction  order  was  reversed,  where  the 
rates  had  been  filed  and  gone  into  effect,  the  court  saying  that  the 
thirty  days'  notice  required  to  be  given  of  a  change  in  schedules 
gave  ample  time  for  invoking  the  aid  of  equity  if  irreparable 
injury  would  result  from  their  being  put  into  effect.  On  the 
other  hand,  the  circuit  court  of  appeals  of  the  fifth  circuit,  in 
Atlantic  Coast  Line  v.  Macon  Grocer  Co.,  166  Fed.  206  (1909), 
reversed  the  circuit  court  (163  Fed.  738),  in  granting  a  temporary 


§    330]  THE   INTERSTATE    COMMERCE   LAW.  425 

injunction  and  ordered  a  dismissal  of  the  bill,  Shelby,  J.,  dissent- 
ing. The  eoifrt  said  that  a  decree  in  equity  would  work  incalcul- 
ably greater  mischief  in  interfering  with  the  statutory  rates 
than  would  an  action  at  law.  The  same  ruling  was  made  in  the 
fourth  circuit  (Columbus  I.  &  Steel  Co.  v.  Kanawha  &  N.  Ry. 
€o.,  178  Fed.  261,  affirming  171  Fed.  173),  in  February  1910; 
and  these  cases  were  followed  by  the  court  of  appeals  of  the 
second  circuit  in  "Wickwire  Steel  Co.  v.  New  York  Central  Co., 
181  Fed.  31 G,  June  1910.  In  this  case  the  order  which  was  re- 
versed, restrained  defendants  from  promulgating  a  proposed 
schedule  through  the  commission  and  from  putting  it  into  effect 
pending  the  determination  of  the  reasonableness  of  the  rate  by 
the  connnission,  the  complainant  being  required  to  file  bond  to 
indemnify  defendants  from  loss  in  case  the  commission  found 
the  rate  to  be  reasonable. 

In  Jewett  Bros.  v.  C.  M.  &  P.  Ry.  Co.,  15G  Fed.  IGl,  in  1907, 
southern  district  of  Dakota,  it  was  held  by  Garland,  J.,  that  the 
court  could  not  grant  a  temporary  injunction  to  restrain  a  car- 
rier from  putting  into  effect  an  alleged  unlawful  rate,  where  the 
suit  was  merely  in  aid  of  a  proceeding  before  the  commission, 
since  the  commission  was  without  power  to  pass  upon  a  rate 
which  was  merely  proposed  by  a  carrier. 

In  Sandusky-Portland  Cement  Co.  v.  B.  &  0.  R.  Co.,  in  the 
circuit  court  of  appeals  of  the  seventh  circuit,  187  Fed.  583 
(1911),  the  complainant  sought  to  enforce  a  contract  whereunder 
the  railroad  company  agreed  under  the  consideration  of  his  es- 
tablishing a  cement  factory  on  its  line  of  a  certain  capacity,  that 
the  railroad's  regular  established  tariff  rates  on  cement  during 
a  specified  period  should  not  exceed  those  made  out  in  the 
schedule.  The  court  refused  to  grant  relief  saying  that  the 
Interstate  Commerce  Commission  was  charged  with  the  unit<ary 
administration  of  interstate  regulations  and  that  the  court  could 
not  grant  relief,  in  advance  of  a  finding  by  the  commission  on 
an  issue  whether  the  rates  were  reasonable  or  unreasonable  to 
be  obtained  in  the  light  of  the  railroad's  operations  as  an  en- 
tirety. The  court  said  that  the  Interstate  Commerce  Commis- 
sion superseded  a  primary  jurisdiction  over  all  other  tribunals 
upon  the  question  of  facts  arising  upon  interstate  rates. 

It  should  be  observed,  however,  that  these  decisions  exceptinsr 
the  last  cited  were  rendered  prior  to  the  amendment  of  1010. 


426  THE   IXTERSTxVTE    COMMERCE   LAW.  [SECTION   9 

which  enlarges  the  power  of  the  commission  in  the  very  matter 
in  which  the  temporary  injunctions  were  sought  to  prevent  irre- 
parable injury  pending  the  investigation  by  the  commission,  as 
now  the  commission  is  empowered  to  suspend  an  increase  of 
rates  for  a  stated  period  for  the  purpose  of  investigating  their 
reasonableness.  The  principle  discussed  in  these  cases  would 
seem  not  to  apply  M'here  the  aid  of  the  court  is  sought  to  enforce 
the  performance  of  a  duty  by  a  carrier  imposed  by  general  law 
and  therefore  not  within  the  duty  of  the  commission  as  specified 
in  the  act.  Thus,  in  L.  &  N.  R.  Co.  v.  F.  W.  Cook  Brewing  Co., 
172  Fed.  117  (1909),  circuit  court  of  appeals  seventh  circuit, 
Avhere  the  court  had  jurisdiction  of  the  parties  and  the  suit  was 
brought  to  compel  the  carrier  to  carry  intoxicating  liquors  into  a 
district  where  the  sale  was  prohibited  by  law,  the  court  held  that 
an  application  of  the  statute  to  shipments  from  other  states  was 
void  as  an  attempted  regulation  of  interstate  commerce  and  that 
such  a  case  Avas  not  one  for  submission  to  the  commission,  and 
that  the  court  had  jurisdiction  to  entertain  the  same. 

It  would  therefore  follow  from  the  rulings  of  the  supreme 
court  and  the  reasoning  w^hereon  the  decisions  are  based,  that 
there  can  be  no  resort  to  the  courts  whether  in  law  or  equity,  if 
the  subject  matter  of  the  complaint  is  within  the  jurisdiction  of 
the  commission  and  can  be  there  determined  under  the  procedure 
provided  in  the  act;  but  if  the  aid  of  the  court  is  required  in 
furtherance  of  the  jurisdiction  of  the  commission  or  the  protec- 
tion of  property  rights  pending  such  determination,  or  if  any  of 
the  common  law  duties  of  the  carrier  are  sought  to  be  enforced 
on  an}^  of  the  recognized  grounds  of  equitable  cognizance,  such 
as  the  prevention  of  irreparable  wrong,  the  jurisdiction  of  equity 
would  be  sustained. 

§  331.  Actions  for  damages  on  account  of  discrimination. — 
In  Morrisdale  Coal  Co.  v.  Pa.  R.  Co.  circuit  court  of  appeals 
third  circuit,  183  Fed.  929,  Nov.  1910,  affirming  176  Fed.  748. 
it  was  held  that  a  party  claiming  to  be  injured  by  a  discrimin- 
ating rule  for  the  distribution  of  coal  cars  in  time  of  shortage 
by  an  interstate  railroad  could  not  maintain  an  action  at  law 
for  the  recovery  of  damages,  although  the  action  was  commenced 
more  than  two  years  after  the  discrimination  had  ceased,  until 
the  Interstate  Commerce  Commission  had  investigated  the  case 
and  determined  by  its  report  that  the  rule  is  and  was  discrimina- 


§    331]  THE   INTERSTATE   COMMERCE   LAW.  427 

tory;  that  the  ed'ect  of  tlie  Interstate  CoimnerL-c  Act  under  the 
construction  of  the  supreme  court  in  the  Abilene  Case  was  not 
merely  to  suspend  the  right  of  a  shipper  to  maintain  an  action 
at  law  to  recover  damages  resulting  from  an  unrcasonal)le  rato 
or  discriminating  regulation,  while  such  rate  or  regulation  re- 
mained in  force,  but  to  sui)crse(]c  the  right  entirely,  and  the 
shippers'  indei)endent  right  of  action  was  not  revived  by  the 
abolition  of  the  unlawful  rate  or  regulation. 

The  commission  had  ruled,  infra,  §  387,  that  it  had  no  jurisdic- 
tion to  make  awards  of  general  damages  in  cases  of  discrimina- 
tion other  than  damages  measured  by  the  difference  in  rates  and 
that  such  damages  should  be  left  to  be  determined  by  action  of 
the  court.  In  this  case  the  court  alluded  to  this  report  of  the 
commission  and  intimated  that  the  letter  of  the  statute  seemed 
to  confer  upon  the  commission  the  power  to  assess  damages  in 
every  ease  of  discriminatory  practice.  The  court  said  further 
that  it  did  not  pass  upon  the  question,  whether  after  the  com- 
mission had  found  such  a  rule  to  be  discriminatory,  it  was  its 
the  commission's  duty  to  assess  the  damages  or  whether  they 
were  to  be  recovered  by  an  action  in  some  court  without  any  pre- 
liminary assessment  by  the  commission. 

For  a  case  wherein  the  same  court  affirmed  a  judgment  for 
damages  on  account  of  discrimination  in  rates  by  the  giving  of 
rebates  to  competitors,  wherein  the  question  of  jurisdiction 
pending  the  action  of  the  Interstate  Commerce  Commission  does 
not  seem  to  have  been  raised,  see  Pa.  R.  Co.  v.  International 
Coal  ]\Iining  Co.,  173  Fed.  1  (October,  1909).  The  Morrisdale 
Coal  Company  Case  above  cited  was  followed  by  the  circuit 
court  E.  D.  Penn.,  183  Fed.  908  (January  4,  1911),  in  the  case 
of  Mitchell  Coal  &  Coke  Co.  v.  Pa.  R.  Co.,  where  the  court  held 
that  it  had  no  jurisdiction  where  the  complaint  was  founded 
upon  the  defendant's  practice  of  granting  rebates  to  the  de- 
fendant's competitors  affecting  not  only  the  plaintiff  but  other 
shippers  in  the  same  region.  It  was  a  regulation  or  practice 
affecting  rates,  and  the  fact  that  it  may  have  ceased  did  not 
affect  L*he  primary  jurisdiction  of  the  Interstate  Commerce  Com- 
mission. 

In  another  case  in  the  same  circuit,  American  Union  Coal  Co. 
V.  Pa.  R.  Co.,  159  Fed.  278  (February,  1908),  the  distinction 
above  mentioned  between  a  discrimination  against  an  individual 
and  a  class  of  shippers  was  illustrated  in  a  ruling  of  the  court 


428  THE   INTERSTATE    COMMERCE    LAW.  [SECTION    9 

upon  demurrer.  The  first  count  claimed  damages  for  an  alleged 
violation  of  the  second  section  of  the  Interstate  Commerce  Act 
for  discriminating  against  plaintiff  in  charging  the  full  tariff 
rates  and  permitting  its  competitors  by  a  device  to  transport 
their  coal  at  a  lower  rate.  This  count  was  held  good,  while  other 
counts  in  the  same  petition,  claiming  damages  for  alleged  con- 
spiracy in  charging  the  tariff  rates  which  were  posted  and  filed 
with  the  Interstate  Commerce  Commission,  were  held  bad  on 
demurrer ;  and  treble  damages  were  also  asked  under  the  Sherman 
Anti-Trust  Act  for  alleged  conspiracy;  but  the  court  held  that 
these  second  and  third  counts  were  bad  as  there  was  no  right 
of  action  either  under  the  anti-trust  act  or  the  Interstate  Com- 
merce act  for  a  readjustment  of  tariff  rates  filed  and  posted 
other  than  through  the  Interstate  Commerce  Commission;  and 
there  was  no  allegation  that  the  rates  had  been  found  unreason- 
able by  the  Interstate  Commerce  Commission. 

It  follows,  therefore,  that  where  the  action  requires  the  de- 
termination of  the  unreasonableness  of  a  rate  or  of  a  regulation 
in  interstate  commerce  whereof  the  commission  has  jurisdiction 
under  the  act,  the  action  cannot  be  maintained  until  the  prior 
determination  by  the  commission  of  the  unreasonableness  of  such 
rate  or  regulation.  On  the  other  hand,  if  the  action  does  not 
require  such  a  determination,  but  seeks  to  recover  for  a  discrim- 
ination in  rates  where  the  measure  of  damages  is  the  difference 
between  the  amount  paid  by  plaintiff  and  that  paid  by  others 
under  substantially  the  same  circumstances  and  conditions  dur- 
ing the  same  time,  and  in  such  case  there  is  no  occasion  to  resort 
to  the  commission,  as  there  is  no  question  to  submit  to  them,  the 
action  at  law  is  maintainable.  See  Pa.  R.  R.  v.  International 
Coal  Mining  Co.,  supra.  Redress  for  such  a  wrong,  therefore, 
in  the  words  of  the  supreme  court,  would  be  consistent  with  the 
context  of  the  act  to  be  redressed  without  previous  action  by 
the  commission.  The  distinction  is  illustrated  in  the  Pennsyl- 
vania cases  above  cited. 

§  332  (252).  Judicial  application  of  section. — See  notes  in 
section  8,  supra.  The  provisions  in  this  section  for  the  compell- 
ing of  testimony  and  the  production  of  books  and  papers  were 
in  effect  held  unconstitutional  by  the  decision  of  the  supreme 
court  in  the  case  of  Hitchcock  v.  Counselman,  infra,  section  12. 
in  that  the  protection  given  to  the  witness  forced  to  give  self- 


§    332]  THE    INTERSTATE    COMMERCE   LAW.  429 

incriminating  testimony  was  not  sufficient  nnder  the  fifth 
amendment  of  the  constitution.  The  act  of  1893,  infra,  section 
12,  only  related  to  testimony  given  before  the  commission  and 
did  not  apply  to  this  section.  This,  however,  was  remedied  by 
the  act  of  1903.     See  infra,  §  3-47. 

The  case  of  Webster  Coal  &  C.  Co.  v.  Cassatt,  207  U.  S.  181,  52 
L.  Ed.  IGO  (1007),  an  j.ction  for  damages  (see  150  Fed.  32,  50), 
came  before  the  supreme  court  on  a  writ  of  error  involving  the 
production  of  books  and  papers,  and  the  court  hold  that  the  order 
was  insufficient  to  support  the  writ,  and  the  merits  of  the  orig- 
inal action  were  not  considered. 

A  final  order  of  the  Interstate  Commerce  Conmiission  and 
remaining  of  record  in  full  force  and  effect  is  a  bar  in  the  United 
States  circuit  court  to  a  suit  brought  for  the  recovery  of  dam- 
ages alleged  to  be  sustained  by  plaintiff  from  the  same  acts  com- 
plained of  in  the  statement  before  the  commission.  See  Riddle 
V.  New  York,  Lake  Erie  &  Western  Railroad  Co.,  U.  S.  Circuit 
Court  W.  Dist.  of  Penn.,  3  Int.  Com.  Rep.  230. 

A  party  is  not  barred  from  prosecuting  an  action  in  court 
for  an  individual  claim  because  of  proceedings  instituted  be- 
fore the  commission  by  an  association  of  which  he  is  a  mem- 
ber, where  it  does  not  appear  that  the  association  presented  a 
claim  for  the  plaintiff  to  the  commission.  Junod  v.  C.  &  N.  "W. 
R.  Co.,  47  Fed.  Rep.  290. 

It  appears  from  the  discussion  in  congress  that  the  purpose 
of  this  provision  of  the  section,  that  a  party  must  elect  whether 
to  proceed  before  the  commission  or  in  the  court,  was  intended 
to  prevent  a  party  from  using  the  commission  merely  as  a  means 
of  procuring  evidence  for  a  suit  in  court. 

Under  this  section  suit  may  be  brought  in  any  circuit  court 
or  district  court  of  the  United  States.  Under  the  Anti-Trust 
Act  of  1890  the  jurisdiction  is  limited  to  the  circuit,  court.  In 
New  Mexico  v.  Baker,  196  U.  S.  432,  49  L.  Ed.  540  (1905),  the 
question  was  suggested,  though  not  decided,  whether  either 
under  the  Interstate  Commerce  Act  or  the  Anti-Trust  Act  of 
1890  a  suit  could  be  brought  in  a  territorial  district  court,  or 
whether  congress  intended  that  only  courts  of  the  United  States 
invested  by  the  third  article  of  the  constitution  with  the  judicial 
power  of  the  United  States  should  have  original  jurisdiction  in 
such  suits. 


430  THE   INTERSTATE    COMMERCE   LAW.  [SECTION    10 


Section  10. 

§  333.  Penalties  for  violations  of  act  by  carriers. 

334.  Amendments  to  the  section. 

335.  The  amendment  of  1903. 

336.  Illegal  combinations  under  section  10. 

337.  The  incidental  interference  with  commerce  by  a  peaceable  strike 

not  a  violation  of  the  section. 

338.  Construction  of  the  statute. 

339.  Removal  of  indicted  persons  to  other  districts  for  trial. 

340.  Limitation  of  criminal  prosecution  under  the  act. 

[Penalties  for  violations  of  Act  l>y  carriers  or  T\lieii  the  car- 
rier is  a  corporation,  it.s  officers,  agents,  or  employees:  I-'"'ine 
ami   imprisonment.] 

§  333.  Penalties  for  violations  of  act  by  carriers. — Sec.  10. 
(As  Amended  March  2, 1889,  and  June  18, 1910.)  That  any  com- 
mon carrier  subject  to  the  provisions  of  this  act,  or,  whenever  such 
common  carrier  is  a  corporation,  any  director  or  officer  thereof, 
or  any  receiver,  trustee,  lessee,  agent,  or  person  acting  for  or  em- 
ployed by  such  corporation,  who,  alone  or  with  any  other  cor- 
poration, company,  person,  or  party,  shall  willfully  do  or  cause 
to  be  done,  or  shall  willingly  suffer  or  permit  to  be  done, 
any  act,  matter,  or  thing  in  this  act  prohibited  or  declared 
to  be  unlawful,  or  who  shall  aid  or  abet  therein,  or  shall 
willfully  omit  or  fail  to  do  any  act,  matter,  or  thing  in  this 
act  required  to  be  done,  or  shall  cause  or  willingly  suffer  or  per- 
mit any  act,  matter,  or  thing  so  directed  or  required  by  this  act 
to  be  done  not  to  be  so  done,  or  shall  aid  or  abet  any  such  omis- 
sion or  failure,  or  shall  be  guilty  of  any  infraction  of  this  act 
for  which  no  penalty  is  otherwise  provided,  or  who  shall  aid  or 
abet  therein,  shall  be  deemed  guilty  of  a  misdemeanor,  and  shall, 
upon  conviction  thereof  in  any  district  court  of  the  United  States 
within  the  jurisdiction  of  which  such  offense  was  committed,  be 
subject  to  a  fine  of  not  to  exceed  five  thousand  dollars  for  each 
offense.  Provided,  That  if  the  offense  for  which  any  person  shall 
be  convicted  as  aforesaid  shall  be  an  unlawful  discrimination  in 
rates,  fares,  or  charges  for  the  transportation  of  passengers  or 
property,  such  person  shall,  in  addition  to  the  fine  hereinbefore 
I)rovided  for,  be  liable  to  imprisonment  in  the  penitentiary  for 
a  term  of  not  exceeding  two  years,  or  both  such  fine  and  impris- 
onment, in  the  discretion  of  the  court. 

[Penalties  for  false  l>ilIinK«  etc.,  l»y  carriers,  their  officers  or 
agents:    Fine    anrt    imprisonment.] 

Any  common  carrier  subject  to  the  provision  of  this  act,  or, 
whenever  such  common  carrier  is  a  corporation,  any  officer  or 
agent  thereof,  or  any  person  acting  for  or  employed  by  such 


§    333]  THE    INTERSTATE    COM  M  KKCE   LAW.  431 

corporation,  wlio,  by  means  of  false  billing,  false  classification, 
false  weighinf?,  or  false  report  of  weight,  or  by  any  other  device 
or  means,  shall  knowingly  and  willfully  assist,  or  shall  willingly 
suffer  or  ix'i'iiiit,  any  person  or  persons  to  obtain  transportation 
for  property  at  less  than  the  regular  rates  then  established  and 
in  force  on  the  line  of  transportation  of  such  common  carrier 
shall  be  deemed  guilty  of  a  misdemeanor,  and  shall,  upon  con- 
viction tliercof  in  any  court  of  the  United  States  of  competent 
Jurisdiction  within  the  district  in  wliicli  such  oll'ense  was  com- 
mitted, be  subject  to  a  fine  of  not  exceeding  five  thousand  dollars, 
or  imprisonment  in  the  penitentiary  for  a  term  of  not  exceeding 
two  years,  or  both,  in  the  discretion  of  the  court,  for  each  offense. 

[Peiinltirs  for  fiil.se  billiiiK'*  etc.,  by  MliipperM  and  other  per- 
Hoii.s:    I'Mne   lliiil    iiii|>riNOiiiii(>nt.| 

Any  person,  corporation,  or  company,  or  any  agent  or  officer 
thereof,  who  shall  deliver  property  for  transportation  to  any 
common  carrier  subject  to  the  provisions  of  this  act,  or  for  whom, 
as  consignor  or  consignee,  any  such  carrier  shall  transport  prop- 
ert>%  who  shall  knowingly  and  willfully,  directly  or  indirectly, 
himself  or  by  employee,  agent,  ollicor,  or  otherwise,  by  false  bill- 
ing, false  classification,  false  weighing,  false  representation  of 
the  contents  of  the  package  or  the  substance  of  the  property, 
false  report  of  weight,  false  statement,  or  by  any  other  device  or 
means,  whether  with  or  without  the  consent  or  connivance  of  the 
carrier,  its  agent,  or  officer,  obtain  or  attempt  to  obtain  trans- 
portation for  such  property  at  less  than  the  regular  rates  then 
established  and  in  force  on  the  line  of  transportation;  or  who 
shall  knowingly  and  willfully,  directly  or  indirectly,  himself  or 
by  employee,  agent,  officer,  or  otherwise,  by  false  statement  or 
representation  as  to  cost,  value,  nature,  or  extent  of  injury,  or 
by  the  use  of  any  false  bill,  bill  of  lading,  receipt,  voucher,  roll, 
account,  claim,  certificate,  affidavit,  or  deposition,  knowing  the 
same  to  be  false,  fictitious,  or  fraudulent,  or  to  contain  any  false, 
fictitious,  or  fraudulent  statement  or  entry,  obtain  or  attempt  to 
obtain  any  allowance,  refund,  or  payment  for  damage  or  other- 
wise in  connection  with  or  growing  out  of  the  transportation  of 
or  agreement  to  transport  such  property,  whether  with  or  with- 
out the  consent  or  connivance  of  the  carrier,  wiiereby  the  com- 
pensation of  such  carrier  for  such  transportation,  either  before 
or  after  payment,  shall  in  fact  be  made  less  than  the  regular 
rates  then  established  and  in  force  on  the  line  of  transportation, 
shall  be  deemed  guilty  of  fraud,  which  is  hereby  declared  to  be 
a  misdemeanor,  and  shall,  upon  conviction  thereof  in  any  court 
of  the  United  States  of  competent  jurisdiction,  within  the  district 
in  Avhich  such  offense  was  wholly  or  in  part  conunitted,  be  sub- 
ject for  each  offense  to  a  fine  of  not  exceeding  five  thousand 
dollars  or  imprisonment  in  the  penitentiary  for  a  term  of  not 
exceeding  two  years,  or  both,  in  the  discretion  of  the  court: 


432  THE   INTERSTATE    COMMERCE    LAW.  [SECTION    10' 

Provided,  Tliat  the  penalty  of  imprisonment  shall  not  apply  ta- 
artificial  persons. 

[Peisallies  for  liiiluclng  oonimon  carriers  to  rtiscrlniiiiate  uii- 
jii^tly:  Fine  nud  iniprisouiiieut.  Joiut  liability  with  carrier 
for   damages.] 

If  any  such  person,  or  any  officer  or  agent  of  any  such  corpor- 
ation or  company,  shall,  by  payment  of  money  or  other  thing  of 
value,  solicitation,  or  otherwise,  induce  or  attempt  to  induce  any 
common  carrier  subject  to  the  provisions  of  this  act,  or  any  of 
its  officers  or  agents,  to  discriminate  unjustly  in  his,  its,  or  their 
favor  as  against  any  other  consignor  or  consignee  in  the  trans- 
portation of  property,  or  shall  aid  or  abet  any  common  carrier 
in  any  such  unjust  discrimination,  such  person  or  such  officer 
or  agent  of  such  corporation  or  company  shall  be  deemed  guilty 
of  a  misdemeanor,  and  shall,  upon  conviction  thereof  in  any  court 
of  the  United  States  of  competent  jurisdiction  within  the  district 
in  which  such  ofl^ense  was  committed,  be  subject  to  a  fine  of  not 
exceeding  five  thousand  dollars,  or  imprisonment  in  the  peni- 
tentiary for  a  term  ot'  not  exceeding  two  years,  or  both,  in  the 
discretion  of  the  court,  for  each  offense ;  and  such  person,  corpor- 
ation, or  company  shall  also,  together  with  said  common  carrier, 
be  liable,  jointly  or  severally,  in  an  action  to  be  brought  by  any 
consignor  or  consignee  discriminated  against  in  any  court  of 
the  United  States  of  competent  jurisdiction  for  all  damages 
caused  by  or  resulting  therefrom. 

§  334.  Amendments  to  the  section. — This  section  as  origi- 
inally  enaeted  contained  only  the  general  penalty  clause  in  the 
first  paragraph.  By  the  amendment  of  IMarcli  2,  1889,  the  sub- 
stance of  the  remainder  of  the  section  was  added,  including 
specific  penalties  for  false  billing,  classification,  etc.,  recom- 
mended by  the  commission.  The  amendment  of  1910  specifically 
included  corporations. 

§  335.  The  amendments  of  1903. — In  the  original  act  and 
until  the  enactment  of  the  Elkins  Law  of  1903,  this  action  con- 
tained all  the  provisions  relating  to  criminal  responsibility  for 
violation  of  the  provisions  of  the  Interstate  Commerce  Act. 
Very  important  amendments  were  made  by  the  act  of  February 
19,  ]903,  or  Elkins  Act,  infra,  §  422,  which  in  view  of  the  multi- 
tude of  prosecutions  for  rebating,  has  become  of  great  import- 
ance in  the  enforcement  of  the  act.  Under  the  original  Elkins 
Act,  the  penalty  of  imprisonment  was  abolished,  and  the  only 
penalties  for  offenses,  whether  committed  before  or  after  the 
passage  of  the  Elkins  Act,  was  the  imi^osition  of  fines,  which 


$5    335]  THE    INTERSTATE    COMMERCE   LAW.  43o 

were  limited  from  a  miiiiimim  of  one  thousand  dollars  to  a  maxi- 
mum of  twenty  thousand  dollars.  By  the  amendment  of  190G, 
this  penalty  of  imprisonment  was  re.<5tored.  For  the  construction 
of  the  Elkins  Act,  see  infra,  §  423  c(  sfq. 

§  336  (256).  Illegal   combinations   under  •  section   10. — The 

most  imporlaut  application  of  sccliun  10  has  bei'ii  made  in  con- 
nection with  labor  combinations,  and  attempted  boycotts  of  in- 
terstate railroad  traffic  by  employes  of  other  interstate  railroads 
on  account  of  strikes  among  classes  of  employes  of  such  rail- 
roads. The  law  of  conspiracy  has  been  invoked  under  section 
5440  R.  S.  U.  S.,  which  provides  that  if  two  or  more  persons 
conspire  to  commit  an  offense  against  the  United  States,  and 
one  or  more  of  such  parties  do  any  act  to  effect  that  object  for 
the  conspiracy,  all  parties  to  the  conspiracy  shall  be  liable 
to  the  penalty  prescribed.  (Siipra,  chapter  VI.)  See  United 
States  V.  Stephens,  44  Fed.  132  (1890),  where  the  statute  was 
applied  to  the  case  of  a  conspiracy  to  commit  acts  made  mis- 
demeanors by  section  13  of  the  Census  Act. 

In  the  case  of  Toledo,  A.  A.  &  N.  W.  R.  Co.  v.  Pennsylvania 
Co.,  54  Fed.  730  (1893),  the  court,  Taft,  J.,  held  that  Rule  No.  12 
of  the  Brotherhood  of  Locomotive  Engineers,  then  in  force,  de- 
claring that  the  handling  of  the  property  of  a  railroad,  when 
the  brotherhood  was  at  issue  with  such  company,  was  in  viola- 
tion of  the  obligation  of  the  brotherhood,  constituted  a  combina- 
tion to  induce  the  violation  of  section  3  of  tlie  Interstate  Com- 
merce Act,  providing  for  the  interchange  of  facilities  by  rail- 
roads engaged  in  interstate  commerce,  and  made  criminal  by 
section  10,  and  that  the  chief  of  the  brotherhood  and  all  mem- 
bers engaged  in  enforcing  that  rule  were  equally  guilty  with  him 
as  principals,  and  all  guilty  of  conspiring  to  commit  an  offense 
against  the  United  States  subject  to  the  penalties  of  section  5440, 
R.  S.  U.  S.  The  court  granted  a  mandatory  injunction  to  compel 
the  inteichange  of  facilities.  It  was  said  however  that  the  de- 
fendants could  avoid  obedience  to  the  injunction  by  actually 
ceasing  to  be  emi)loyes  of  the  company,  although  if  they  left 
the  service  of  the  company  under  rule  ]2  of  their  order  so  as  to 
compel  the  defendant  compau}-  to  injure  the  complainant  com- 
pany, they  were  doing  an  unlawful  act  and  rendering  themselves 
liable  in  damages  for  any  injuries  which  are  thereby  indicted, 
28 


434  THE   INTERSTATE    COMMERCE   LAW.  [SECTION    10 

and  might  be  liable  to  a  criminal  penalty.  The  arm  of  a  court 
of  equity  could  not  be  extended  by  mandatory  injunction  to 
compel  the  performance  of  personal  services.  See  54  Fed.  746 
(1893),  where  one  of  the  engineers  was  adjudged  guilty  of  con- 
tempt. See  also  C,  B.  &  Q.  R.  Co.  v.  B.,  C.  K  &  N.  R.  Co.,  34 
Fed.  481  (1888).  See  also  Arthur  v.  Oakes,  11  C.  C.  A.  209,  63 
Fed.  310  (1894). 

In  Beers  v.  Wabash,  St.  Louis  &  Pacific  Railroad  Co.,  34 
Fed.  244  (1889),  the  court  made  the  same  holding  as  to  rule  12 
of  the  brotherhood,  and  as  the  railroad  was  operated  by  a  re- 
ceiver, the  court  said  the  receiver  could  not  refuse  to  receive 
from  and  deliver  to  a  connecting  road,  although  by  doing  so 
his  own  road  may  be  involved  in  a  strike  with  its  employes. 

§  337  (257).  The  incidental  interference  with  commerce  by 
a  peaceable  strike  not  a  violation  of  the  section. — ^While  the 
employes  of  a  railroad  corporation  cannot  lawfully  combine 
to  compel  their  employer  to  discriminate  against  the  traffic  of 
a  connecting  railroad  for  any  reason,  the  incidental  interference 
with  interstate  traffic  resulting  from  a  combined  cessation  of 
employment  by  railroad  employes  for  the  purpose  of  better- 
ing their  own  conditions  of  service  does  not  constitute  a  criminal 
■conspiracy  or  an  offense  under  section  ten  of  the  Interstate 
■Commerce  Act.  See  Arthur  v.  Oakes,  11  C.  C.  A.  209,  63  Fed. 
310  (1894).  The  point  was  directly  ruled  by  Adams,  J.,  in  the 
case  of  the  Wabash  Railroad  Co.  v.  Hannahan  et  al.,  121  Fed. 
563  (1903),  where  the  court  dissolved  a  temporary  injunction 
;granted  without  notice  against  the  officers  of  the  brotherhoods 
'of  trainmen  and  firemen  restraining  them  from  ordering  a 
strike  on  the  Wabash  Railroad.  The  court  said  that  while 
the  employes,  the  members  of  the  brotherhoods,  had  the  right 
to  combine  in  leaving  their  employment,  the  court  would  retain 
jurisdiction  of  the  case  so  that  in  the  event  of  any  molestation 
of  or  interference  with  interstate  commerce  by  them  after 
leaving  employment,  the  lawful  powers  of  the  court  could  be 
invoked  to  restrain  such  interference. 

See  also  Hopkins  v.  United  States,  171  U.  S.  578,  43  L.  Ed. 
290  (1898),  Taft,  J.,  in  Thomas  v.  Cincinnati,  N.  0.  &  T.  0.  Rail- 
road,   62    Fed.    803.      This    subject    of    what    constitutes    a 


§    338]  THE   INTERSTATE   COMMERCE   LAW.  435 

conspiracy  in  restraint  of  trade  has  been  more  extensively  dis- 
cussed in  connection  with  the  more  comprehensive  provisions 
of  the  so-called  Anti-Trust  Law  of  1890,  infra,  §  432  et  seq. 
See  also  charge  to  grand  jury  by  Grosscup,  J.,  as  to  what 
constituted  a  criminal  conspiracy  in  interstate  commerce,  62 
Fed.  838  (1893)  ;  charge  to  grand  jury  in  California  by  Ross,  J., 
G2  Fed.  834  (1893) ;  by  Morrow,  J.,  62  Fed.  840.  See  supra, 
ch.  VI. 

§  338  (258).  Construction  of  the  statute. — ^Under  the  statute 
before  its  amendment  in  1903  it  was  held  that  a  corporation  could 
not  be  indicted  thereunder,  as  the  only  parties  punishable  were 
individuals.  United  States  v.  IMiehigan  Central  Eailroad  Co., 
43  Fed.  26.  (But  see  act  of  Feb.  19,  1903,  infra,  §  422.) 
The  agent  who  was  a  party  to  the  carrying  of  freight  or  pas- 
sengers at  a  rate  less  than  the  published  tariff  was  subject  to 
indictment.  Under  that  provision  of  the  section  making  it  un- 
lawful for  carriers  to  receive  greater  or  less  compensation  from 
one  shipper  than  from  another  for  an  equal  service,  an  indict- 
ment stating  that  a  carrier  gave  a  rebate  to  one  shipper  without 
stating  any  instance  in  which  he  refused  a  like  rebate  to  an- 
other shipper,  is  defective  in  not  showing  discrimination.  United 
States  V.  Ilanley,  71  Fed.  672  (1896).  It  was  held  in  the  same 
case  that  an  indictment  for  paying  or  receiving  rebates  would 
not  lie  under  the  clause  making  it  unlawful  for  the  carrier  by 
means  of  false  billing,  classification  or  any  other  device  know- 
ingly to  assist  or  suffer  any  person  to  obtain  transportation  at 
less  than  the  regular  tariff  rates. 

An  agent  of  a  railroad  who  merely  collects  freight  and  has 
nothing  to  do  with  fixing  the  rates  is  not  indictable  under  the 
act  for  collecting  a  greater  rate  for  a  shorter  than  for  a  longer 
haul.  United  States  v.  ]\Iellin,  D.  of  Kan.,  53  Fed.  229  (1893). 
As  to  essentials  of  indictments  under  the  act,  see  also  United 
States  V.  De  Coursey,  82  Fed.  302;  United  States  v.  Henley, 
71  Fed.  672. 

This  offense  of  obtaining  transportation  of  property  at  less 
than  regular  rates  by  means  of  false  billing,  etc.,  is  not  one 
that  requires  the  transportation  of  the  property  to  its  destina- 
tion to  make  it  complete,  but  the  offense  is  complete  when  the 


43G  THE   INTERSTATE    COMMERCE  .  LAW.  [SECTION    10 

contract  for  the  illegal  rate  was  secured,  and  could  only  be  prose- 
cuted in  that  district,  Davis  v.  United  States,  104  Fed.  136 
(1900). 

In  United  States  v.  Howell,  56  Fed.  21  (1894),  West  Dist. 
of  Ark.,  it  was  held  that  shippers  of  lumber  could  be  convicted 
of  conspiracy  to  violate  the  Interstate  Commerce  Act  upon 
showing  that  tlieir  servants  procured  unlawful  discrimination  in 
rates  by  false  weights,  provided  they  knew  of  the  unlawful  acts 
and  permitted  them  to  continue.  United  States  v.  De  Coursey,  82 
Fed.  302  (1897). 

For  an  indictment  for  alleged  violation  of  section  3,  held  de- 
fective for  want  of  sufficient  allegations  of  alleged  undue  pref- 
erence in  the  furnishing  of  switching  connections  and  car  dis- 
tribution, in  1906  before  the  amendment  of  that  year,  see  U.  S. 
v.  B.  &  0.  R.  R.,  153  Fed.  997. 

§  339  (259).  Removal  of  indicted  persons  to  other  districts 
for  trial.— In  Davis  v.  United  States,  43  C.  C.  A.  448,  104  Fed. 
136  (1900),  the  appellant  was  indicted  in  the  northern  district 
of  Texas  for  trial  under  an  indictment  alleging  violation  of  sec- 
tion ten,  paragraph  three,  of  the  Act  to  Regulate  Commerce. 
The  United  States  district  court  at  Cincinnati  made  an  order 
directing  the  removal  of  the  appellant  for  trial  to  the  northern 
district  of  Texas.  It  was  claimed  that  the  offense  was  com- 
mitted in  Texas,  although  the  shipment  was  made  from  Cincin- 
nati to  Texas,  under  the  provision  of  section  781,  R.  S.  U.  S., 
providing  that  when  any  offense  against  the  United  States  was 
begun  in  one  judicial  circuit  and  completed  in  another,  it 
should  be  deemed  to  have  been  committed  in  either  and  may 
be  dealt  with,  inquired  of  and  tried  or  punished  in  either 
district,  in  the  same  manner  as  if  it  had  been  actually  and 
wholly  committed  therein.  The  court  held  that  this  section 
was  intended  to  provide  for  that  class  of  cases  where  the 
crime  was  not  completed  in  one  district,  but  where  a  separate 
and  essential  act  of  commission  constituting  the  crime  is  com- 
mitted in  another  district,  and  that  this  section  therefore  had 
no  application  to  the  case  of  a  shipper  who  obtains  lower  rates 
by  means  of  false  classification,  billing,  etc.  The  offense  in  that 
case  is  complete  when  the  shipment  is  made.    The  court  therefore 


j5    340]  THE   INTERSTATE    COMMERCE   LAW.  437 

held  that  the  district  court  erred  in  ordering  a  removal  of  the 
defendant  to  Texas,  and  he  was  ordered  discharged. 

As  to  removal  of  United  States  prisoners  from  one  district 
to  another  under  1014,  R.  S.,  see  Green  v.  Ifcnkel,  183  U.  S. 
249,  4G  L.  Ed.  177  (1904)  ;  Beaver  v.  Henkel,  194  U.  S.  73,  48  L. 
Ed.  882. 

§  340  (259a).  Limitation  of  criminal  prosecution  under  the 
act. — While  there  is  no  limitation  of  criminal  prosecution  fixed 
in  the  aet,  sec.  1044,  R.  S.  U.  S.  provides  limitation  of  three 
years,  in  case  of  all  offenses  "other  than  capital."  "Suits  and 
prosecutions  for  penalties  and  forfeitures"  are  subject  under 
sec.  1047,  R.  S.  U.  S.  to  limitation  of  five  years. 


43S  THE   INTERSTATE    COMMERCE   LAW.  [SECTION    11 


Section  11. 

§  341.  Interstate  Commerce  Commission — How  appointed. 
342.  The  organization  and  membership  of  the  commission. 

§  341  (260).  Interstate  Commerce  Commission — ^how  ap- 
pointed.— Sec.  11,  That  a  commission  is  hereby  created  and  es- 
tablished to  be  known  as  the  Interstate  Commerce  Commission, 
which  shall  be  composed  of  five  Commissioners,  who  shall  be  ap- 
pointed by  the  President,  by  and  with  the  advice  and  consent 
of  the  Senate.  The  Commissioners  first  appointed  under  this 
Act  shall  continue  in  office  for  the  term  of  two,  three,  four,  five, 
and  six  years,  respectively,  from  the  first  day  of  January,  Anno 
Domini  eighteen  hundred  and  eight-seven,  the  term  of  each  to 
be  designated  by  the  President ;  but  their  successors  shall  be  ap- 

iTerms  of  commissioners.] 

pointed  for  terms  of  six  years,  except  that  any  person  chosen 
to  fill  a  vacancy  shall  be  appointed  only  for  the  unexpired  time 
of  the  Commissioner  whom  he  shall  succeed.  Any  Commissioner 
may  be  removed  by  the  President  for  inefficiency,  neglect  of  duty, 
or  malfeasance  in  office.  Not  more  than  three  of  the  Commis- 
sioners shall  be  appointed  from  the  same  political  party.  No 
person  in  the  employ  of  or  holding  any  official  relation  to  any 
common  carrier  subject  to  the  provisions  of  this  act,  or  owning 
stock  or  bonds  thereof,  or  who  is  in  any  manner  pecuniarily  in- 
terested therein,  shall  enter  upon  the  duties  of  or  hold  such  office. 
Said  Commissioners  shall  not  engage  in  any  other  business,  vo- 
cation, or  employment.  No  vacancy  in  the  Commission  shall  im- 
pair the  right  of  the  remaining  Commissioners  to  exercise  all 
the  powers  of  the  Commission.  (See  section  24,  enlarging  Com- 
mission and  increasing  salaries.) 

§  342.  The  organization  and  membership  of  the  commission. 

The  commission  was  organized  in  1887  by  the  appointment  by 
President  Cleveland  and  confirmation  by  the  senate  of  the  fol- 
lowing members: 

Hon.  Thomas  M.  Cooley,  of  IMichigan, 
Hon.  William  E.  Morrison,  of  Illinois, 
Hon.  "Walter  L,  Bragg,  of  Alabama, 
Hon.  Aldace  F.  "Walker,  of  "Vermont, 
Hon.  Augustus  Schoonmaker,  of  New  York. 
Judge  Cooley  served  as  chairman  until  his  retirement  in  1891. 
He  was  succeeded  by  Mr.  Morrison,  who  served  as  chairman  until 


§    342]  THE    INTERSTATE    COMMERCE   LAW.  439 

December  31,  1897,  wlicn  he  was  succeeded  by  Judge  Martin  A. 
Knapp,  who  had  succeeded  I\Ir.  Schoonmaker,  of  New  York,  on 
the  commission.  Judge  Knapp  continued  as  chairman  of  the 
board  until  his  appointment  and  confirmation  as  presiding  just- 
ice of  the  new  commerce  court  in  December,  1910.  Vacancies  in 
the  commission  have  been  filled  from  time  to  time  in  accordanf-e 
with  the  directions  of  the  act  that  not  more  than  two  sliall  be 
members  of  the  same  i)olitical  party.  The  commission  is  now 
(October,  1911),  composed  of  the  following  members: 

Hon.  Judson  C.  Clemens,  of  Georgia,  Chairman, 

Hon.  Charles  A.  Prouty,  of  Vermont, 

Hon.  Franklin  K.  Lane,  of  California, 

Hon.  Edgar  E.  Clark,  of  Iowa, 

Hon.  James  F.  Harlan,  of  Illinois, 

Hon.  B.  H.  Meyer,  of  Wisconsin, 

Hon.  C.  C.  McChord,  of  Kentucky. 


•i-iO  THE   INTERSTATE    COMMERCE   LAW.  [SECTION    12 


Section  12. 

§  343.  General  investigating  powers  of  commission. 

344.  Amendments  of  the  section. 

345.  Compelling  of  self-incriminating  testimony. 

346.  Corporations  not  included  in  immunity  of  witness. 

347.  Immunity  acts  of  February  25,  1903  and  June  13,  1906. 

348.  Corporate  official  compelled  to  produce  corporate  books  contain- 

ing personally  incriminating  matter. 

349.  Probative  effect  of  self-incriminating  testimony. 

350.  Immunity  is  limited  to  the  subject  of  testimony. 

351.  Power  of  the  court  to  enforce  testimony  before  the  commission 

sustained. 

352.  Relevancy  of  testimony  before  the  commission. 

353.  Limitation  of  the  power  of  the  commission  to  enforce  testimony. 

354.  Investigating  powers  of  a  grand  jury  in  the  United  States  courts. 

355.  General  powers  of  the  commission. 

[PoTrer  and  duty  of  Coinniis.siou  to  inquire  into  business  of 
carriers  and  keey   itself  informed  iu  regard  thereto,] 

§  343.  General  investigating  powers  of  commission. — Sec  12. 

(As  amended  March  2,  1889,  and  February  10,  1891.)  That 
the  Commission  hereby  created  shall  have  authority  to  inquire 
into  the  management  of.  the  business  of  all  common  carriers  sub- 
ject to  the  provisions  of  this  Act,  and  shall  keep  itself  informed 
as  to  the  manner  and  method  in  which  the  same  is  conducted, 

IComniissions  required  to  execute  and  enforce  provisions  of 
tliis  Act.] 

and  shall  have  the  right  to  obtain  from  such  common  carriers 
full  and  complete  information  necessary  to  enable  the  Commis- 
sion to  perform  the  duties  and  carry  out  the  objects  for  which 
it  was  created;  and  the  Commission  is  hereby  authorized  and 
required  to  execute  and  enforce  the  provisions  of  this  Act ;  and, 
upon  the  request  of  the  Commission,  it  shall  be  the  duty  of  any 

[Duty    of   district    attorney   to   prosecute   under    direction    o£ 
Attorney-General.] 

district  attorney  of  the  United  States  to  whom  the  Commission 
may  apply  to  institute  in  the  proper  court  and  to  prosecute  under 
the  direction  of  the  Attorney-General  of  the  United  States  all 
necessary  proceedings  for  the  enforcement  of  the  provisions  of 
this  Act  and  for  the  punishment  of  all  violations  thereof,  and  the 

[Costs  and  expenses  of  prosecution  to  be  paid  out  of  appro- 
priation   for   courts.] 

costs  and  expenses  of  such  prosecution  shall  be  paid  out  of  the 
appropriation  for  the  expenses  of  the  courts  of  the  United  States; 
and  for  the  purposes  of  this  Act  the  Commission  shall  have 

[Power  of  Commission   to  require   attendance   and   testimony 
of  witnesses   and  production   of  documentary  evidence.] 

power  to  require,  by  subpoena,  the  attendance  and  testimony  of 
witnesses  and  the  production  of  all  books,  papers,  tariffs,  con- 


§    343]  THE   INTERSTATE    COMMERCE   LAW.  441 

tracts,  agreements,  and  documents  relating  to  any  matter  under 
investigation. 

[ComntiMMlon    mny   invoke   uld   of   <-oiir(.s   1o   ooiiipel   %vltiiCHNeN 
to  utiriKl  uiul  ti'Mtify.) 

Such  attendance  of  witnesses,  and  tlie  production  of  such 
docHincntary  evidence,  may  be  required  fi-om  any  place  in  the 
United  States,  at  any  designated  phice  of  hearing.  And  in  case 
of  disobedience  to  a  subprrna  the  Commission,  or  any  party  to 
a  proceeding  before  the  Commission,  may  invoke  the  aid  of  any 
court  of  the  United  States  in  requiring  the  attendance  and  testi- 
ruony  of  witnesses  and  tlie  production  of  books,  papers,  and 
documents  under  the  provisions  of  this  section. 

lI'eiinMy   for   <1iso))tMli(>iirr    to   or<l«>r   of   tln'   «'oiirt.l 

And  any  of  the  circuit  courts  of  the  United  States  within  the 
jurisdiction  of  which  such  inquiry  is  carried  on  may,  in  case  of 
contumacy  or  refusal  to  obey  a  subpa'na  issued  to  any  common 
carrier  subject  to  the  provisions  of  this  Act,  or  other  person,  issue 
an  order  requiring  such  common  carrier  or  other  person  to 
appear  before  said  Commission  (and  produce  books  and  papers 
if  so  ordered)   and  give  evidence  touching  the  matter  in  ques- 

[Cliilni  that  tesllniony  or  evidence  ^vMl  teuU  to  criminate  ^vlil 
not   excii.sc   Avltness.l 

tion;  and  any  fjiilure  to  obe}^  such  order  of  the  court  may  be 
punished  by  such  court  as  a  contempt  thereof.  The  claim  that 
any  such  testimony  or  evidence  may  tend  to  criminate  the  person 
giving  such  evidence  shall  not  excuse  such  witness  from  testify- 
ing; but  such  evidence  or  testimony  shall  not  be  used  against 
such  person  on  the  trial  of  any  criminal  proceeding. 

[Testimony  mny  be  tnlven  l>y  depo.sition.] 

The  testimony  of  an}-  witness  may  be  taken,  at  the  instance 
of  a  party  in  any  proceeding  or  investigation  pending  before  the 
Commission,  by  deposition,  at  any  time  after  a  cause  or  proceed- 

l<  oniniiNsion    may    order    testimony    to    l»e    tnlcen    l>y    deposi- 
tion.! 

ing  is  at  issue  on  petition  and  answer.  The  Commission  may 
aho  order  testimony  to  be  taken  by  deposition  in  am-  proceeding 
or  investigation  pending  before  it.  at  any  stage  of  such  proceed- 
ing or  investigation.  Such  depositions  may  be  taken  before  any 
judge  of  any  court  of  the  United  States,  or  any  commissioner  of 
a  circuit,  or  any  clerk  of' a  district  or  circuit  court,  or  any  chan- 
cellor, justice,  or  judge  of  a  supreme  or  superior  court,  mayor 
or  chief  magistrate  of  a  city,  judge  of  a  county  court,  or  court 
of  conuuon  pleas  of  any  of  the  United  States,  or  any  notary  pub- 
lic, not  being  of  counsel  or  attorney  to  either  of  the  parties,  nor 

I  Ren.Monalile  notiee  niuvt  >>e  Kiven.) 

interested  in  the  event  of  the  proceeding  or  investigation.  Rea- 
sonable notice  must  first  be  given  in  writing  by  the  party,  or 
his  attorney,  proposing  to  take  such  deposition  \o  the  opposite 
party  or  his  attorney  of  record,  as  either  may  be  nearest,  which 
notice  shall  state  the  name  of  the  witness  and  the  time  and  place 


442  THE   INTEKSTATE    COMMERCE   LAW.  [SECTION    12 

of  the  taking  of  his  deposition.    Any  person  may  be  compelled 

iTestinioiiy    hy    deposUioii    may    be    compelled    in    the    same 
mniiuer  as  above  specified.] 

to  appear  and  depose,  and  to  produce  documentary  evidence,  in 
the  same  manner  as  witnesses  may  be  compelled  to  appear  and 
testify  and  produce  documentary  evidence  before  the  Commis- 
sion as  hereinbefore  provided. 

[Manner  of  talvini;  depositions.] 

Every  person  deposing  as  herein  provided  shall  be  cautioned 
and  sworn  (or  affirm,  if  he  so  request)  to  testify  the  whole  truths 
and  shall  be  carefully  examined.  His  testimony  shall  be  re- 
duced to  writing  by  the  magistrate  taking  the  deposition,  or 
under  his  direction,  and  shall,  after  it  has  been  reduced  to  writ- 
ing, be  subscribed  by  the  deponent. 

[Wlien  witness  is  in  a  foreign  country.] 

If  a  witness  whose  testimony  may  be  desired  to  be  taken  by 
deposition  be  in  a  foreign  country,  the  deposition  may  be  taken 
before  an  officer  or  person  designated  by  the  Commission,  or 

[Depositions  must   be  filed  with  the  Commission.] 

agreed  upon  by  the  parties  by  stipulation  in  writing  to  be  filed 
with  the  Commission.  All  depositions  must  be  promptly  filed 
with  the  Commission. 

[Fees  of  witnesses  and  magistrates.] 

Witnesses  whose  depositions  are  taken  pursuant  to  this  Act^ 
and  the  magistrate  or  other  officer  taking  the  same,  shall  sever- 
ally be  entitled  to  the  same  fees  as  are  paid  for  like  services  in 
the  courts  of  the  United  States. 

§  344.  Amendments  of  the  section. — Section  12  was  not 
changed  in  the  amendatory  acts  of  1906  and  1910,  but  it  was 
amended  by  the  act  of  March  2,  1889,  and  again  on  February  10, 
1891,  in  respect  to  the  duties  of  the  district  attorney  and  the 
provisions  for  the  summoning  of  witnesses.  It  has  also  been 
materially  amended  and  enforced  by  the  acts  of  1893,  1903,  and 
1906  concerning  self  incriminating  testimony. 

§  345  (263).  The  compelling  of  self -incriminating  testi- 
mony.— The  most  important  judicial  discussion  under  this  sec- 
tion has  been  in  relation  to  the  power  of  enforcing  self-incrim- 
inating testimony.  The  provision  of  the  third  paragraph  of  the 
section,  that  a  party  could  be  compelled  to  give  self-incriminating 
testimony,  but  providing  that  the  evidence  given  by  him  should 
not  be  used  against  him,  was  held  in  Counselman  v.  Hitchcock, 
142  U.  S.  547,  35  L.  Ed.  1110  (reversing  44  Fed.  Rep.  271),  to 
be  unconstitutional  as  violative  of  the  fifth  amendment  to  the 


§    345]  THE   INTERSTATE    COMMERCE   LAW.  443 

constitution,  wliii-li  declares  lluit  no  person  shall  be  compelled 
in  any  criminal  case  to  be  a  witness  against  himself.  The  court 
disapproved  the  decision  of  the  New  York  court  of  appeals  in 
People  V.  Kelley,  24  N.  Y.  74,  which  held  the  immunity  in  a 
similar  statute  sufficient,  and  ruled  that  the  statutory  enactment 
to  be  valid  must  afford  absolute  immunity  af^aiiist  farther  prose- 
cutions. The  petitioner  who  had  declined  to  answer,  whether  he 
had  received  a  rebate  or  not,  on  the  ground  that  it  would  in- 
criminate him,  was  discharged  on  habeas  corpus.  After  this 
decision,  the  statute  was  amended  by  the  passage  of  the  act  of 
February  11,  1893,  as  follows: 

That  no  person  shall  be  excused  from  attending  and  testifying 
or  from  producing  books,  papers,  tariffs,  contracts,  agreements 
and  documents  before  the  Interstate  Commerce  Commission,  or 
in  obedience  to  the  subpoena  of  the  Commission,  whether  such 
subprt'na  be  signed  or  issued  by  one  or  n.ore  Commissioners,  or 
in  any  cause  or  proceeding,  criminal  or  otherwise,  based  upon  or 
growing  out  of  any  alleged  violation  of  the  act  of  Congress,  en- 
titled "An  act  to  regulate  commerce,"  approved  February 
fourth,  eighteen  hundred  and  eighty-seven,  or  of  any  amendment 
thereof  on  the  ground  or  for  the  reason  that  the  testimony  or 
evidence,  documentary  or  otherwise,  required  of  him,  may  tend 
to  criminate  him  or  subject  him  to  a  penalty  or  forfeiture.  But 
no  person  shall  he  iwosccutcd  or  subjected  to  any  penalty  or  for- 
feiture for  or  on  account  of  any  transaction,  matter  or  thing, 
concerning  wliicli  lie  may  testify,  or  produce  evidence,  document- 
ary or  otherwise,  before  said^  Commission,  or  in  obedience  to  its 
subpoena,  or  the  subpana  of  either  of  them,  or  in  any  such  case 
or  proceeding:  Provided,  That  no  person  so  testifying  shall  be 
exempt  from  prosecution  and  punishment  for  perjury  committed 
in  so  testifying. 

Any  person  who  shall  neglect  or  refuse  to  attend  and  tes- 
tify, or  to  answer  any  lawful  inquiry,  or  to  produce  books,  pa- 
pers, tariffs,  contracts,  agreements  and  documents  if  in  his  power- 
to  do  so,  in  obedience  to  the  subpoena  or  lawful  requirement  of 
the  Commission  shall  be  guilty  of  an  offense  and  upon  conviction 
thereof  by  a  court  of  competent  jurisdiction  shall  be  punished 
by  fine  not  less  than  one  hundred  dollars  nor  more  than  five 
thousand  dollars,  or  by  imprisonment  for  not  more  than  one  year 
or  by  both  such  fine  and  imprisonment. 

The  act  of  1893  was  sustained  in  Brown  v.  Walker,  161  U. 
S.  591,  40  L.  Ed.  S19  (1896),  the  supreme  court  holding  that  if 
afforded  absolute  immunity  against  prosecutions,  federal  or 
state,  for  the  offense  to  which  the  question  related,  and  there- 


444  THE   INTERSTATE    COMMERCE   LxVW.  [SECTION    12 

fore  deprived  the  witness  of  his  constitutional  right  to  decline 
to  answer.  (Justices  Shiras,  Gray,  White  and  Field  dissent- 
ing on  the  ground  that  the  state  courts  would  not  be  com- 
pelled to  accept  the  saving  clause  of  the  federal  statute  in  re- 
spect to  crimes  against  the  state.)  This  amendment  of  1893 
only  refers  to  testimony  before  the  Interstate  Commerce  Com- 
mission, and  does  not  refer  to  testimony  given  before  a  court 
in  a  suit  brought  under  the  provisions  of  sections  8  and  9  of 
the  act.  The  decision  in  the  Counselman  Case  would  clearly 
apply  to  the  provision  of  section  9,  providing  that  self-incrim- 
inating testimony  forced  from  a  witness  should  not  be  used 
against  liim. 

The  Amendatory  Act  of  February  19.  1903,  known  as  the 
Elkins  Act,  in  section  3  specifically  provides : 

"In  proceedings  under  the  act  the  courts  shall  have  the  power 
to  compel  the  attendance  of  witnesses  both  upon  the  part  of  the 
carrier  and  shipper  who  should  be  required  to  answer  on  all 
subjects  relating  directly  or  indirectly  to  the  matter  in  contro- 
versy, and  to  compel  the  production  of  all  books  and  papers  both 
of  the  carrier  and  shipper  w^hich  relate  directly  and  indirectly 
to  such  action.  The  claim  that  such  testimony  or  evidence  may 
tend  to  criminate  the  person  giving  such  evidence  shall  not  ex- 
cuse such  person  from  testifying  or  such  corporation  from  pro- 
ducing its  books  or  papers ;  but  no  person  shall  be  prosecuted  or 
subjected  to  any  penalty  or  forfeiture  for  or  on  account  of  any 
transaction,  matter,  or  thing  concerning  which  he  may  testifv 
or  produce  evidence,  documentary  or  otherwise,  in  such  proceed- 
ing." 

The  same  provision  of  immunity  is,  therefor,  extended  to  all 
witnesses,  whether  before  a  commission  or  court,  who  are  com- 
pelled to  give  self  incriminating  testimony  under  the  act. 

§  346  (264) .  Corporations  not  included  in  immunity  of  wit- 
ness.— In  a  prosecution  under  section  10,  before  the  amend- 
ments of  1903,  it  was  held  that  corporations  could  not  be  in- 
dicted, as  the  only  parties  punishable  thereunder  were  indi- 
viduals; an  official  could  not  therefore  excuse  himself  from 
testifying  on  the  ground  that  his  testimony  would  implicate 
the  corporation,  his  employer.  In  re  Peasley,  44  Fed. 
271  (1890).  In  a  prosecution  under  section  5  of  the  act,  where- 
under  pooling  between  carriers  is  made  unlawful,  and  each 
day  of  its  continuance  made  a  separate-  offense,   indictments 


§    346]  THE   INTERSTATE   COMMERCE   LAW.  445 

against  carrier  corporations  were  returned  ])y  the  grand  jury 
in  western  district  of  Tennessee  under  charge  of  Hammond,  J. 
]]5  Fed.  588  (1902).  In  this  charge  the  opinion  was  ex- 
pressed not  only  tliat  corporations  were  indictable  under  sec- 
tion 5,  but  that  under  the  act  of  1893  there  was  no  vicarious 
immunity  and  that  there  was  no  immunity  to  the  corporation 
from  the  enforced  testimony  of  the  officers,  or  productions  of 
its  books  and  papers. 

The  p:ikins  Act  of  February  19,  190:^  (infra,  §  422),  has  dis- 
tinctly changed  the  relations  of  corporations  to  the  act,  first, 
in  making  (sec.  1)  the  corporation  liable  for' conviction  for 
misdemeanor  and  fine  on  account  of  any  act  done  or  omitted  in 
violation  of  the  statute  by  any  officer  acting  in  its  behalf,  and, 
second,  in  expressly  authorizing  (sec.  3)  the  enforced  produc- 
tion of  the  corporate  books  and  papers ;  and  it  then  grants  im- 
munity in  the  language  above  quoted. 

It  was  held  b}'  the  supreme  court  in  Hale  v.  Henkel,  201  U. 
S.  43,  50  L.  Ed.  652  (1906),  in  a  case  of  habeas  corpus  sued  out 
by  a  witness  who  was  summoned  under  a  subpoena  duces  tecum 
to  bring  certain  papers  and  agreements  of  the  American  Tobacco 
Company,  his  emjoloyer,  in  an  examination  before  the  grand 
jury  for  an  alleged  violation  of  the  anti-trust  act  and  he  declined 
to  obey  on  the  ground  of  self  incrimination,  that  the  immunity 
given  by  the  act  of  February  25,  1903  (see  infra,  §  488),  was  suf- 
ficient for  the  protection  of  the  witness. 

It  was  also  held  that  he  could  not  claim  the  privilege  of  an- 
other person  or  tlie  corporation  of  which  he  was  an  officer  or 
employe.  AAliile  the  corporation  could  not  claim  immunity  under 
the  fifth  amendment  it  was  entitled  to  protection  against  unrea- 
sonable searches  and  seizures  under  the  fourth  amendment.  The 
corporation  was  a  creature  of  the  state.  Although  the  corpora- 
tion in  this  case  was  a  state  corporation,  tlie  power  of  the  gen- 
eral government  to  the  exercise  of  this  authority  was  the  same 
as  if  the  corporation  had  been  created  by  act  of  congress,  al- 
though the  court  claimed  no  general  visitatorial  power  over  the 
state  corporations.  Justices  Brewer  and  Fuller  dissented,  hold- 
ing that  corporations  were  protected  in  both  the  4th  and  5th 
amendments.  See  also  ]\IcAlister  v.  Henkel,  201  U.  S.  p.  90, 
50  L.  Ed.  G71  (1906).  where  the  papers  called  for  were  speei- 
ficall}^  described,  and  tlie  judirincnt  was  atTirmed. 


•14G  THE   INTERSTATE    COMMERCE   LAW.  [SECTION    12 

The  same  ruling  was  made  in  Nelson  v.  U,  S.,  201  U,  S.  92,  51 
L.  Ed.  673  (1906),  in  a  case  arising  under  the  anti-trnst  act  in 
a  suit  of  the  government  against  the  General  Paper  Company. 
The  refusal  of  the  corporate  officers  to  obey  the  order  of  ap- 
pellate court  in  such  a  case  to  produce  documentary  evidence 
could  not  be  justified  on  the  theory  that  the  evidence  was  not  in 
their  possession  or  under  their  control,  when  their  possession  was 
not  personal  but  that  of  a  corporation.  It  was  also  ruled  that 
evidence,  whether  documentary  or  oral,  sought  to  be  elicited 
from  witnesses  in  such  an  action,  was  material  where  it  would 
tend  to  establish  the  manner  in  which  the  agent  executed  its 
functions,  and  that  the  immateriality  of  the  evidence  would  not 
justify  their  refusal  to  answer  questions  put  to  them  and  to 
produce  written  evidence  in  examination  before  a  special  master ; 
and  the  materiality  of  the  evidence  was  not  open  to  consideration 
on  a  writ  of  error  sued  out  by  witnesses  to  review  a  judgment  for 
contempt. 

These  cases  were  both  under  the  Anti-Trust  Act,  but  the  prin- 
ciple decided  that  the  immunity  is  personal  to  the  witness  and 
did  not  extend  to  the  corporation  of  which  he  was  an  employe, 
was  clearly  applicable  to  proceedings  before  the  commission  or 
the  courts  under  the  Interstate  Commerce  Act,  There  is,  there- 
fore, no  immunity  to  the  corporation  by  reason  of  the  enforced 
testimony  of  its  officers,  nor  can  an  officer  or  an  employe  refuse 
to  produce  books  of  an  employer  corporation  on  the  ground  that 
it  would  implicate  the  corporation  employer.  Gardner  v.  Early, 
69  Iowa,  42.  The  ruling  in  Hale  v.  Henkel  was  re-affirmed  in 
Wilson  V.  United  States,  infra,  in  1911. 

.  In  proceedings  under  the  Interstate  Commerce  Act  therefore 
the  immunity  as  regards  books  and  papers  extends  in  any  event 
only  to  those  which  are  private,  that  is,  to  those  whose  produc- 
tion or  inspection  can  only  be  enforced  when  incriminating  under 
statutory  immunity.  It  does  not  include  records,  whether  cor- 
porate or  individual,  Vidiich  are  made  public  by  law. 

Thus  the  railroad  rates  and  regulations  concerning  rates  are 
required  by  law  to  be  public.  A  tariff  sheet  of  a  railroad  which 
is  required  by  law  to  be  publicly  posted  is  not  a  private  paper, 
and  its  enforced  production  in  a  prosecution  against  a  railroad 
company  is  not  compelling  it  in  a  legal  sense  to  give  evidence 
against  itself.     L.  &  N.  R.  Co.  v.  Commonwealth   (Ky.  1899), 


§    347]  THE   INTERSTATE    COMMERCE   LAW.  447 

51  S.  W.  Rep.  167;  as  to  applications  of  same  principle,  see 
People  V.  Coombs,  158  N.  Y.  532  (1899) ;  State  v.  Donovan,  10 
N.  Dak.  203 ;  State  v.  Smith,  74  Iowa,  580. 

§  347.  Immunity  act  of  Feb.  25,  1903  and  June  13,  1906.— By 

the  act  of  February  25,  1903  it  was  provided  both  as  to  the  In- 
terstate Commerce  Act  and  the  Anti-Trust  Act  that  no  person 
shall  be  subjected  to  any  penalty  or  forfeiture  for  or  on  accoimt 
of  any  transaction,  matter  or  thing  concerning  which  lie  may 
testify  or  produce  evidence,  documentary  or  otherwise,  in  any 
suit  proceeding  or  prosecution  under  said  act,  and  provided 
further  that  no  person  so  testifying  shall  be  exempt  from  prose- 
cution or  punishment  for  perjury  coiiiinitted  in  so  testifying. 

In  U.  S.  V.  Armour,  142  Fed.  808,  in  March,  1906,  district 
court  northern  district  of  Illinois,  it  was  held  on  a  motion  to 
quash  indictments  of  corporations  and  individuals  for  conspir- 
acy in  violation  of  the  Anti-Trust  Act  that  a  corporation,  whether 
state  or  federal,  could  not  claim  immunity  from  prosecution  for 
\dolation  of  the  Interstate  Commerce  or  Anti-Trust  laws  of  the 
United  States  because  of  testimony  given  or  produced  by  its 
officers  or  agents  before  the  Interstate  Commerce  Commission 
or  the  Commissioner  of  Corporations  or  in  any  proceeding,  suit, 
or  prosecution  under  such  laws,  the  right  to  immunity  being 
limited  to  individuals  who.  as  witnesses,  gave  testimony  or  pro- 
duced evidence ;  but  as  to  the  individual  defendants  it  was  held 
that  the  immunity  under  the  acts  of  congress  extended  to  a  per- 
son who  gave  self-incriminating  statements  to  the  Commissioner 
of  Corporations  in  the  course  of  his  official  investigation  under 
section  6  of  the  act  of  February  14,  1903,  creating  the  depart- 
ment to  commerce  and  labor  and  authorizing  the  Commissioner 
of  Corporations  to  make  investigations  and  compel  the  attend- 
ance of  witnesses.  The  indictment  as  to  individual  defendants 
was  therefore  quashed.  Under  the  recommendation  of  the  presi- 
dent, in  view  of  this  ruling,  the  act  of  June  13,  1906  was  passed 
providing  that  "under  the  several  immunity  acts  immunity 
shall  extend  only  to  a  natural  person  who,  in  obedience  to  a  sub- 
poena, gives  testimony  under  oath  or  produces  evidence,  docu- 
mentary or  otherwise,  under  oath." 

In  a  subsequent  indictment  of  the  parties  whose  indictment 
was  quashed  in  U.  S.  v.  Armour,  fiupra,  it  was  held  in  U.  S.  v. 


448  THE    INTERSTATE    COMMERCE   LAW.  [SECTION    12 

Swift,  ISG  Fed.  1002  (3911),  that  this  immnnity  act  did  not 
make  the  defendants  immnne  from  prosecution  thereafter  for 
continuing  the  same  offense.    See  infra,  Anti-Trust  Act,  sec.  2. 

§  348.  Corporate  official  compelled  to  produce  corporate 
books  containing  personally  incriminating  matter. — In  Wilson 
V.  The  United  States,  220  U.  S.  614,  55  L.  Ed.  —  (May,  1911), 
the  supreme  court  affirmed  the  judgment  of  the  circuit  court  for 
the  southern  district  of  New  York  in  committing  the  president 
of  the  United  Wireless  Telegraph  Company,  the  main  corpora- 
tion, for  contempt  for  refusing  to  produce  the  corporate  hooks 
in  his  custody  before  the  grand  jury.  The  court  said  that  Wilson 
was  protected  against  giving  oral  self-incriminating  testimony 
and  against  the  production  of  his  private  books  and  papers;  but 
the  copies  of  letters  written  by  the  president  of  the  corporation 
in  the  course  of  his  transactions  were  as  much  a  part  of  its 
documentary  property,  subject  to  its  control  and  to  its  duty  to 
produce  when  lawfully  required  in  judicial  proceedings,  as  its 
ledgers  and  minute  books.  He  could  not  make  the  books  his 
private  or  personal  books  by  keeping  copies  of  personal  letters 
in  them.  It  seems  that  the  court  had  suggested  the  removal  of 
the  strictly  private  letters  from  the  books.  The  court  said  the 
fact  that  the  appellant  himself  wrote  or  signed  the  official  letters 
copied  into  the  books  neither  conditioned  nor  enlarged  his  privi- 
lege, and  that  the  principle  applied  not  only  to  public  documents 
and  public  offices,  but  also  to  records  required  by  law  to  be  kept 
in  order  that  they  may  be  suitable  information  for  transactions 
which  are  appropriate  subjects  of  governmental  regulation  and 
the  enforcement  of  restrictions  validly  established;  there  the 
privilege  which  existed  as  to  private  papers  cannot  be  main- 
tained. 

Wilson  held  the  corporate  book's  subject  to  the  corporate  duty. 
If  the  corporation  w^as  guilty  of  misconduct,  he  could  not  with- 
hold its  books  to  save  it ;  and  if  he  were  implicated  in  the  viola- 
tions of  law,  he  could  not  withhold  the  books  to  protect  himself 
from  the  effect  of  their  disclosures.  It  was  immaterial  that  the 
corporation  was  organized  under  state  law,  and  that  Wilson's 
own  conduct  was  under  investigation  with  a  view  to  his  own 
indictment.    Justice  McKenna  dissented. 


§    351]  THE   INTERSTATE   COMMERCE   LAW.  449 

§  349  (265).  Probative  effect  of  enforced  self -incriminating 
testimony.— It  was  held  in  Burrell  v.  Montana,  194  U.  S.  572 
(1904).  48  L.  Ed.  1122,  tliat  testimony  given  in  an  examination 
in  bankruptcy,  which  was  used  without  objection  on  tJie  trial 
of  the  bankrupt  on  indictment  in  the  state  court  did  not  vio- 
late any  federal  right.  Section  7  of  the  Bankrupt  Act  provid- 
ing that  tlie  testimony  should  not  be  olTered,  did  not  deprive 
the  evidence  of  probative  force  when  admitted  without  objee- 
lion  in  the  state  court. 

§  350  (266) .  Immunity  is  limited  to  the  subject  of  testimony. 
In  United  States  v.  Price,  96  Fed.  960  (1899),  parties  were  in- 
dicted for  conspiring  to  obstruct  justice  by  taking  from  a  witness 
subpccned  to  appear  before  a  United  States  grand  jury,   cer- 
tain pai)ers  which  he  had  been  directed  to  produce  as  furnish- 
ing testimony  concerning  a  charge  of  violation  of  the  act  to 
regulate  commerce  then  before  the  grand  jury.     Two  of  the  in- 
dicted persons  testified  that  they  had  been  called  before  and 
had  testified  before  the  grand  jury  concerning  the   violation 
of  the  act  to  regulate  commerce,  and  had  also  testified  concern- 
ing the  taking  of  the  papers  from  the  witness.     The  court  over- 
ruled the  pleas,  saying  it  was  not  the  intention  of  congress  to 
grant  to  a  witness  amnesty  as  to  otlicr  crimes  merely  because 
he  had  testified  to  the  violation  of  the  Interstate  Commerce  Act. 
The  amnesty  Avas  only  co-extensive  with  the  requirement  to  tes- 
tify.   The  first  clause  of  the  act  of  1893  made  necessary  the  sec- 
ond clause:  otherwise  neither  would  have  been  effective.     The 
latter  supplemented  the  former  and  was  limited  by  it,  and  re- 
ferred to  nothing  excej^t  to  matters  that  witnesses  should  not 
be  excused  from  testimony  by  virtue  of  the  act.    The  court  said 
that  this  was  not  the  proper  construction  of  the  act  of  1893. 
The  least  collusion  with  a  friendly  grand  jury  might  enable  the 
worst  violator  of  the  laws  of  the  United  States  to  entitle  himself 
to  testify  by  procuring  himself  to  be  summoned  as  a  witness 
nominally  to  testify,  or  to  be  asked  about  a  violation  of  the  In- 
terstate Commerce  Law. 

§  351  (267).  Power  of  the  court  to  enforce  testimony  before 
the  commission  sustained.— In  Brimson  v.  Interstate  Commerce 
Comm.,  154  U.  S.  447,  38  L.  Ed.  1047  (1893),  the  supreme  court, 
29 


450  THE   INTERSTATE    COMMERCE    LAW.  [SECTION    12 

reversing  53  Fed.  47G,  sustained  the  authority  of  the  cir- 
cuit court  under  this  section  of  the  Interstate  Commerce  Act 
to  enforce  the  giving  of  testimony  and  the  production  of  books 
and  papers.  It  was  strongly  urged  that  the  provision  was  in 
conflict  with  the  constitution  in  that  it  imposed  on  judicial 
tribunals  duties  that  were  not  judicial  in  their  character.  But 
the  court  ruled  that  the  proceeding  under  the  twelfth  section 
of  the  act  was  not  merely  ancillary  and  advisory,  nor  was  its 
object  merely  to  obtain  an  opinion  of  the  circuit  court,  which 
would  be  v/ithout  operation  upon  the  rights  of  the  parties.  Any 
judgment  would  be  a  final  and  indisputable  basis  of  action  as 
between  the  commission  and  the  defendant,  and  furnish  a  pre- 
cedent for  similar  cases.  The  judgment  was  none  the  less  one 
of  a  judicial  tribunal,  dealing  with  questions  judicial  in  their 
nature,  and  presented  in  the  customary  forms  of  judicial  pro- 
ceedings, because  its  effect  may  be  to  aid  an  administrative  or 
executive  body  in  the  performance  of  duties  legally  imposed 
upon  it  by  congress  in  the  case  of  a  power  granted  by  the  con- 
stitution. The  issue  made  in  such  a  case  was  not  one  for  the  de- 
termination of  a  jury,  nor  could  any  question  of  contempt  arise 
until  the  issue  of  law  in  the  circuit  court  was  determined  adversly 
to  the  defendants  and  he  had  refused  to  obey,  not  the  order  of 
the  commission,  but  the  final  order  of  the  court.  Such  a  power 
to  adjudge  for  contempt  could  not,  under  our  system  of  govern- 
ment and  consistently  with  due  process  of  law  be  vested  in  a 
subordinate  and  administrative  or  executive  tribunal  for  final 
■determination.  There  was  a  dissenting  opinion  by  Justice 
Brewer,  in  which  Chief  Justice  Fuller  and  Justice  Jackson  con- 
curred.   155  U.  S.  1,  39  L.  Ed.  49. 

§  352  (268).  Relevancy  of  testimony  before  the  commission. 

In  a  later  decision.  Interstate  Commerce  Commission  v.  Baird, 
194  U.  S.  25  (1904)  48  L.  Ed.  860  the  supreme  court  sustained 
an  application  of  the  commission,  reversing  the  circuit  court, 
for  the  production  of  papers  and  the  giving  of  testimony  in  an 
investigation  pending  before  the  commission  concerning  an 
alleged  pooling  agreement  in  the  transportation  of  coal.  The 
complaint  filed  before  the  commission  alleged  that  the  railroad 
companies  were  natural  competitors  and  had  made  an  agree- 
ment or  combination  in  coal  rates  which  were  unreasonable  and 


§    353]  THE    INTERSTATE    COMMERCE   LAW.  451 

unjust.  Tlie  witness  refused  to  produce  contracts  for  pun-has- 
ing  coal  b}^  the  railroads  from  operators  in  Pennsylvania  and 
to  answer  certain  questions  as  to  the  sale  and  price  of  coal,  and 
it  was  claimed  that  the  enforced  production  of  these  papers  and 
the  compelling  of  this  testimony  would  be  violative  of  the  fourth 
and  fifth  amendments  to  the  constitution.  The  suijreme  court 
said  that  while  the  contracts  might  not  establish  the  pooling  ar- 
rangement, they  would  have  a  legitimate  bearing  upon  the  in- 
quiry, and  that  the  testimony  should  not  be  so  limited  as  to 
unreasonably  hamper  the  commission  by  narrowing  its  field  of 
inquiry  beyond  the  reasonable  requirements  of  the  rights  of 
citizens,  as  such  a  course  would  seriously  impair  its  usefulness 
and  prevent  a  realization  of  the  salutary  purposes  of  congress. 
The  court  held  also  that  as  under  the  act  of  1903  the  witnesses 
were  given  immunity,  there  was  no  invalid  objections  under 
the  fourth  and  fifth  amendments  to  the  constitution.  It  Avas  also 
ruled  in  this  case  that  the  contracts,  under  which  the  railroad 
companies  engaged  in  interstate  carriage  of  anthracite  coal  had 
acquired  certain  colliei-ies,  whose  proprietors  were  about  to  build 
competing  lines  and  guaranteed  the  stock  and  bonds  issued  in 
payment  thereof  by  a  corporation  whose  charter  they  had  pur- 
chased for  that  purpose,  could  properly  be  produced,  although 
they  had  been  made  with  third  persons  not  parties  of  the  pro- 
ceeding. 

§  353.  Limitation  of  the  power  of  the  commission  to  enforce 
testimony. — In  Harriman  v.  Interstate  Commerce  Commission, 
211  U.  S.  p.  407,  53  L.  Ed.  253,  December,  1908,  the  court  re- 
versed the  circuit  court  of  the  United  States,  southern  district 
of  New  York,  in  one  case  where  the  court  directed  appellant  to 
answer  certain  questions  in  an  investigation  by  the  Interstate 
Commerce  Commission,  and  affirmed  its  judgment  in  another 
case  where  it  refused  to  compel  an  answer.  See  157  Fed.  432. 
This  was  an  investigation  b}^  the  commission  on  its  own  order 
(see  12  I.  C.  C.  R.  277),  as  to  certain  consolidations  and  combi- 
nations in  interstate  commerce.  Appellant  Harriman  was  in- 
terrogated about  the.OA\Tiership  of  certain  stock  of  the  Chicago 
&  Alton  Railway  Company,  deposited  with  his  bankers,  and 
certain  stock  of  other  railroads  so  purchased  and  deposited.  He 
was  asked  whether  he  or  any  other  director  bought  stocks  of 


452  THE   INTERSTATE    COMMERCE   LAW,  [SECTION   12 

the  Union  &  Southern  Pacific  in  anticipation  of  dividends;  and 
appellant  Kahn,  member  of  the  firm  of  Knhn,  Loeb  &  Co.,  was 
asked  concerning  the  same  matters.  The  court  held  that  the 
witnesses  could  not  be  required  to  answer  before  the  Interstate 
Commerce  Commission  except  in  connection  with  complaints  for 
violation  of  the  Interstate  Commerce  x\ct  or  with  the  investi- 
gation by  the  commission  of  subjects  that  might  have  been  made 
the  object  of  complaint,  these  being  the  only  matters  contem- 
plated by  the  provision  of  section  12  of  that  act  which  gave  the 
commission  power  to  require  testimony  for  the  purposes  of  the 
act,  which  power  could  not  be  exercised  by  the  commission  per- 
forming its  duty  under  that  section  to  keep  itself  informed  as 
to  the  manner  and  method  in  which  the  business  of  common  car- 
riers was  conducted,  nor  in  connection  with  the  enforcement  of 
the  requirement  of  section  20  concerning  reports  by  carriers  nor 
to  aid  the  commission  in  recommending,  pursuant  to  section  21, 
additional  legislation  by  congress.  Justices  Day,  Harlan,  and 
McKenna  dissented.  The  court  said  the  act  clearly  showed  that 
the  power  to  compel  the  attendance  of  witnesses  was  to  be  exer- 
cised only  in  connection  with  the  quasi-judicial  duties  of  the 
commission.  This  decision  was  rendered  after  the  amendments 
of  1906,  but  prior  to  the  amendment  of  1910.  See  section  15, 
infra. 

§  354.  Investigating  power  of  a  grand  jury  in  United  States 
courts. — It  was  also  ruled  in  the  Wilson  Case,  supra,  that  a 
grand  jury  could  make  investigation,  summon  and  examine  wit- 
nesses, and  compel  the  production  of  books  and  papers,  although 
there  was  no  case  or  specific  charge  pending  before  it,  and  that 
a  subpoena  duces  tecum  is  not  invalid  because  it  contains  no  ad 
testificandum  clause  but  simply  directs  a  corporation  which 
could  not  give  oral  testimony,  to  produce  books. 

It  is  not  necessary  that  a  subpoena  duces  tecum  directed  to  a 
corporation  should  conform  to  the  provisions  of  the  U.  S.  R.  S. 
877,  concerning  the  summoning  of  witnesses;  nor  is  an  accused 
accorded  the  right  to  be  apprised  of  the  names  of  witnesses 
who  appeared  before  the  grand  jury. 

§  355.  General  powers  of  the  commission. — The  powers  of 
the  commission  have  been  so  enlarged  by  the  amendments  of 


§    355]  TIIK    INTERSTATE    COMMERCE   LAW.  453 

1906  and  1910  wliicli  are  set  forth  in  succeeding  sections  that 
the  general  provisions  of  this  section,  giving  the  commission  au- 
thority to  inquire  into  the  management  of  the  business  of  com- 
mon carriers  to  obtain  full  and  complete  information,  and  to 
execute  and  enforce  tljc  provisions  of  tlie  act,  have  been  super- 
seded by  the  comprehensive  range  of  powers  set  forth  in  sections 
15,  16,  and  20,  as  enacted  in  the  amendments  referred  to. 

The  comprehensive  and  inquisitorial  power  of  the  commission 
is  illustrated  by  investigations  from  time  to  time  as  to  freifht 
rates  in  different  sections  of  the  country  and  in  other  inquiries 
made,  either  on  its  own  motion  or  under  specific  direction  ot 
congress.  Very  large  administrative  duties  are  also  required  in 
connection  with  the  Safety  Appliance  Laws,  See  infra.  See  re- 
port on  the  eastern  bituminous  coal  situation,  January  25,  1907, 
and  the  report  on  block  signal  systems,  February  23,  1907. 

The  services  of  the  commission  have  also  been  invoked  in  ad- 
justing controversies  between  shippers  and  carriers,  as  in  the 
investigation  of  the  differentials  recognized  by  the  carriers  in 
their  rates  to  the  different  cities  of  the  eastern  seaboard.  See 
report  for  1904,  p.  23. 

The  commission  in  taking  testimony  before  itself,  w^hether  in 
original  investigations  or  in  the  hearing  of  complaints,  is  empow- 
ered to  siunmon  witnesses  or  to  produce  documentary  evidence 
from  any  place  in  the  United  States  to  any  designated  place  of 
hearing.  The  power  of  the  commission  in  this  respect  is  greater 
than  the  power  of  the  courts  of  the  United  States,  as  witnesses 
living  out  of  the  district  are  not  required  to  attend  court  at  a 
greater  distance  than  a  hundred  miles,  nor  to  attend  the  taking 
of  depositions  under  a  commission  at  any  place  out  of  the  county, 
nor  more  than  forty  miles  from  the  place  of  their  residence.  Sec- 
tion 870  R.  S.  U.  S.  This  power  however  has  been  rarely  used,  as 
the  commission  has  arranged  its  hearings  as  authorized  by  the 
act  (section  19)  in  different  parts  of  the  comity  convenient  for 
the  witnesses. 


454  THE   INTERSTATE    COMMERCE    LAW.  [SECTION    13 


Section  13. 

§  356.  Complaints    to    commission— How    and    by    whom    made — How 
ser\ed  upon  carriers. 

357.  The  amendment  of  1910. 

358.  Procedure  before  commission — Parties. 
259.  Pleadings  and  proofs. 

360.  Demand  for  reparation  must  be  specifically  stated. 

361.  Burden  of  proof. 

362.  Production  of  books  and  papers. 

363.  The  rulings  of  the  commission  as  precedents. 

§  356  (270).  Complaints  to  commission — How  and  by  whom 
made — How  served  upon  carriers. — Sec.  13.  {As  amended  June 
18,  1910.)  That  any  person,  firm,  corporation,  company,  or  as- 
sociation, or  any  mercantile,  agricultural,  or  manufacturing  so- 
ciety or  other  organization,  or  any  body  politic  or  municipal 
organization,  or  any  common  carrier,  complaining  of  anything 
done  or  omitted  to  be  done  by  any  common  carrier  subject  to 
the  provisions  of  this  Act,  in  contravention  of  the  provisions 
thereof,  may  apply  to  said  Commission  by  petition,  which  shall 
briefly  state  the  facts;  whereupon  a  statement  of  the  complaint 
thus  made  shall  be  forwarded  by  the  Commission  to  such  com- 
mon carrier,  who  shall  be  called  upon  to  satisfy  the  complaint, 
or  to  answer  the  same  in  writing,  within  a  reasonable  time,  to 
be  specified  by  the  Commission.    If  such  common  carrier  within 

[Reparation  by  carriers   before   investigatiou.] 

the  time  specified  shall  make  reparation  for  the  injury  alleged 
to  have  been  done,  the  common  carrier  shall  be  relieved  of  lia- 
bility to  the  complainant  only  for  the  particular  violation  of 

[Investigations   of  complaints   by   the   Commission.] 

law  thus  complained  of.  If  such  carrier  or  carriers  shall  not 
satisfy  the  complaint  within  the  time  specified,  or  there  shall 
appear  to  be  any  reasonable  ground  for  investigating  said  com- 
plaint, it  shall  be  the  duty  of  the  Commission  to  investigate  the 
matters  complained  of  in  such  manner  and  by  such  means  as  it 
sliall  deem  proper. 

Said  Commission  '.lall,  in  like  manner  and  with  the  same  au- 
thority and  powers,  investigate  any  complaint  forwarded  by  the 
railroad  commissioner  or  railroad  commission  of  any  State  or 
Territory  at  the  request  of  such  commissioner  or  commission, 
and  the  Interstate  Commerce  Commission  shall  have  full  author- 

[Commission    may   issue    orders    in    investigations    begun 
on  Its  own  motion.] 

ity  and  power  at  any  time  to  institute  an  inquiry,  on  its  own 
motion,  in  any  case  and  as  to  any  matter  or  thing  concerning 


§    358]  THE   INTERSTATE    COMMERCE   LAW.  455 

which  a  coinpLiint  is  authorized  to  be  made,  to  or  before  said 
Commission  by  any  provision  of  this  Act,  or  concerning  whicli 
any  question  may  arise  under  any  of  the  provisions  of  this  Act, 
or  relating  to  the  enforcement  of  any  of  the  provisions  of  this  Act. 
And  the  said  Connnission  shall  have  the  same  powers  and  au- 
thority to  proceed  with  any  in<iuiry  instituted  on  its  own  motion 
as  though  it  had  been  appealed  to  by  complaint  or  petition  un- 
der any  of  the  provisions  of  this  Act,  including  the  po\yer  to 
make  and  enforce  any  order  or  orders  in  the  case,  or  relating  to 
the  matter  or  thing  concerning  w^hich  the  inquiry  is  had  except- 
ing orders  for  the  payment  of  money.  No  complaint  shall  at 
any  time  be  dismissed  because  of  the  absence  of  direct  damage 
to  the  complainant. 

§  357.  The  amendment  of  1910.— This  section  was  not 
amended  until  the  act  of  June  18th,  1910.  In  its  original  form 
it  provided  for  complaints  by  shippers,  or  their  representatives, 
but  made  no  provision  for  a  complaint  by  a  common  carrier,  and 
while  authorizing  an  inquiry  by  the  commission  on  its  own  mo- 
tion, made  no  specific  provision  for  the  powers  which  the  com- 
mission could  exercise  in  such  investigation  made  upon  its  own 
motion.  Thus  in  the  Harriman  Case,  supra,  decided  after  the 
amendment  of  1906,  it  was  held  that  in  such  investigation  the 
commission  had  no  power  of  compelling  testimony.  The  com- 
mission (see  page  8  of  report  of  1909)  had  said  that  it  was  a 
question  whether  it  could  make  an  order  under  the  fifteenth 
section  in  a  proceeding  instituted  on  its  own  motion  under  sec- 
tion 13. 

The  amendatory  act  of  1910  amends  this  section,  providing 
for  the  making  of  a  complaint  by  a  common  carrier,  and  also 
that  the  "commission  shall  have  the  same  powers  and  authority 
to  proceed  in  any  inquiry  instituted  on  its  own  motion  as  though 
it  had  been  ai  >ealed  to  by  complaint  or  petition  under  any  of 
the  provisions  of  this  act,  including  the  power  to  make  and  en- 
force any  order  or  orders,  in  the  case,  or  relating  to  the  nuitter 
or  thing  concerning  which  the  inquiry  is  had,  excepting  the  or- 
ders for  the  payment  of  money. ' ' 

In  this  connection  also  should  be  read  section  9  of  the  act. 

§  358  (271).  Procedure  before  commission— Parties.— This 
section  regulating  procedure  before  the  commission  has  been 
liberal Iv  construed   by   the   commission  in   furtherance   of  the 


456  THE   INTERSTATE    COMMERCE   LAW.  [SECTION   13 

obvious  purpose  of  securing  a  summary  investigation  and  with 
only  so  much  formality  as  was  essential  to  justice.  Dilatory 
proceedings  are  considered  objectionable  and  a  single  speedy 
hearing  is  desired  in  every  case.  1  I.  C.  C.  R.  223,  1  Int.  Com. 
Rep.  410. 

Any  person  or  association  is  entitled  to  complain  either  for 
himself  or  for  any  community  in  which  he  is  interested.  Many 
complaints  have  been  made  before  the  commission  by  local  trade 
organizations  interested  in  the  locality  or  in  specific  industries. 
Thus  the  Boston  Fruit  &  Produce  Exchange  was  held  a  mercan- 
tile society  within  the  meaning  of  the  section  and  could  main- 
tain a  proceeding  without  showing  special  damage  to  itself  as 
a  society.  4  I.  C.  C.  R.  664:,  3  Int.  Com.  Rep.  493.  The  Chicago 
Live  Stock  Exchange,  whose  members  were  engaged  in  the  sale  of 
live  stock  on  commission  in  Chicago,  was  held  entitled  to  main- 
tain a  proceeding  to  correct  an  unreasonable  freight  rate  upon 
live  stock  from  various  points  to  Chicago,  notwithstanding  cer- 
tain by-laws  and  proceedings  of  the  association  were  claimed  to 
be  in  violation  of  the  Anti-Trust  law.  7  I.  C.  C.  R.  513.  It  is 
inunaterial  that  such  trade  organizations  are  unincorporated.  See 
also  10  I.  C.  C.  R.  428. 

The  Forest  City  Freight  Bureau,  which  admitted  members 
upon  written  contract  to  perform  certain  services  in  return  for 
an  annual  fee,  is  an  association  competent  to  bring  a  complaint 
before  the  commission.  The  fact  that  it  must  be  able  to  answer 
in  costs  in  case  such  should  be  awarded  against  it  on  appeal 
taken  into  the  courts  does  not  take  away  the  right  to  bring  a 
complaint  under  the  act;  13  I.  C.  C.  Rep.  109.  It  was  there- 
fore an  "association"  within  the  meaning  of  section  13  of  the 
act. 

The  prior  leave  of  court  is  not  necessary  to  entitle  a  shipper 
to  proceed  against  a  railroad  in  the  hands  of  a  receiver.  6  I. 
C.  C.  R.  520.  When  one  makes  a  complaint  under  the  act  to 
regulate  commerce  and  sets  up  a  personal  grievance  which  he 
fails  to  prove  before  the  commission,  if  a  violation  of  law  by 
the  defendant  appears,  the  commission  can  take  the  necessary 
steps  to  bring  the  violation  of  the  law  to  an  end.  1  I.  C.  C.  R. 
208,  1  Int.  Com.  Rep.  Gil. 

As  to  parties  defendant,  it  was  held  by  the  supreme  court  in 
Texas  Pacific  R.  Co.  v.  Interstate  Commerce  Commission,  supra, 


§    359]  THE   INTERSTATE   COMMERCE   LAW.  457 

lliat  tlie  owner  of  tlie  portion  of  line  over  which  tlirough  freight 
is  carried  is  a  proper  but  not  a  necessary  party  in  a  proceed- 
ing concerning  the  alleged  discrimination  between  inland  and 
import  rates.  The  commission  however  has  exercised  the  right 
to  bring  in  all  parties  interested  in  a  case.  4  I.  C.  C.  R.  276,  3 
Int.  Com.  Kep.  282,  5  I.  C.  C.  R.  571,  4  Int.  Com.  Rep.  230. 

The  disposition  of  the  commission  to  simplify  its  practice  and 
procedure  was  illustrated  in  its  ruling,  20  I.  C.  C.  R.  486,  in 
a  case  involving  a  demand  for  a  switch  track  connection,  which 
under  the  ruling  of  the  supreme  court  under  the  statute  then  ex- 
isting in  force,  could  only  be  made  by  a  shipper.  See  Interstate 
Commerce  Commission  v.  D.  L.  &  N.  R.  Co.,  supra.  The  com- 
plainant, an  Electric  Traction  Company,  in  order  to  obviate  this 
objection  produced  at  the  hearing  two  letters  from  shippers  au- 
tlioriziug  the  application.  The  commission  ruled  that  for  all 
practical  purposes  this  was  sufficient  to  make  them  parties  to 
the  proceeding.    See  also  12  I.  C.  C.  R.  483. 

§  359  (272).  Pleadings  and  proofs. — A  complaint  concerning 
classification  of  rates  should  not  be  made  against  the  classifica- 
tion committee  or  rate  committee,  but  against  the  carriers  who 
were  represented  by  such  committees,  and  the  complaint  should 
point  them  out  by  name.  4  I.  C.  C.  R.  276,  3  Int.  Com.  Rep. 
282.  The  commission  has  early  announced  and  it  has  always 
insisted  that  it  would  not  express  opinions  on  abstract  questions, 
nor  on  questions  pres  nted  on  exparte  statements  of  facts,  nor 
on  questions  of  the  statute  presented  for  its  advice,  but  without 
any  controversy  pending  before  it  on  complaint  of  violation  of 
law.  1  I.  C.  C.  R.  8,  1  Int.  Com.  Rep.  18.  The  commission  will 
not  consider  the  claim  of  a  party  for  injury  to  goods  resulting 
from  delay,  detention,  etc.,  or  from  any  cause  not  attributable 
to  any  violation  of  the  provision  of  the  act  to  regulate  commerce. 
6  I.  C.  C.  R.  85.  Where  reparation  is  asked  to  the  extent  of  al- 
leged excessive  charges,  reasonable  time  is  allowed  for  making 
proof  of  the  amounts  paid  when  the  evidence  adduced  shows  ex- 
<3essive  charges  without  disclosing  the  amount  of  the  excess.  6  I. 
C.  C.  R.  335.  The  procedure  is  in  the  simplest  form  consistent 
with  reasonal)le  certainty.  No  replication  is  required.  "When  the 
facts  are  not  agreed  uj»on,  deposition  may  be  taken  upon  notice 
•or  the  lioaring  entered  upon  immediately  after  answer.    Assign- 


458  THE   INTERSTATE    COMMERCE   LAW.  [SECTION    13 

ments  of  hearing  are  made  upon  the  request  of  either  party  and 
parties  are  heard  orally  or  on  briefs,  as  they  may  prefer.  See 
1  I.  C.  C.  R.  223,  1  Int.  Com.  Rep.  408. 

"When  a  carrier  fails  to  answer  the  complaint  filed,  the  com- 
mission takes  such  proof  of  the  facts  as  may  be  deemed  proper 
and  reasonable,  and  makes  order  therein  accordingly.  5  I.  C.  C. 
R.  663,  4  Int.  Com.  Rep.  318. 

§  360.  Demand  for  reparation  must  be  specifically  stated. — 

In  order  to  avoid  multiplicity  of  actions  and  consequent  un- 
necessary labor  and  expense,  and  in  order  that  defendants  as 
well  as  the  commission  might  have  due  notice  of  the  full  extent 
of  a  complaint,  the  commission  has  announced  that  reparation 
will  not  ordinarily  be  awarded  in  a  formal  case  attacking  a  rate 
as  unreasonable  or  otherwise  in  violation  of  law,  unless  intent  to 
claim  reparation  is  specifically  disclosed  therein,  or  in  an  amend- 
ment thereof  filed  before  the  submission  of  the  case.  See  20  I.  C. 
C.  R.  612.  The  commission  said  in  this  case  that  it  was  not  a 
court  and  added,  "its  proceedings  partake  somewhat  of  a  judicial 
or  semi-judicial  character,  but  its  work  is  distinctively  adminis- 
trative" and  said  further  that  it  was  obviously  fair  that  a  com- 
plainant be  required  to  disclose  his  whole  case,  and  the  demands 
upon  the  time  of  the  commission  was  so  many  and  pressing  that 
unnecessary  multiplicity  of  proceedings  could  not  be  encouraged 
or  even  tolerated. 

§  361  (273).  Burden  of  proof. — The  question  of  burden  of 
proof  has  been  eonstraed  in  the  matter  of  reasonableness  of  rates, 
section  1,  discriminations,  section  2,  and  unjust  preferences, 
section  3.  In  general  terms  it  may  be  said  that  the  commission 
adopts  the  rules  in  regard  to  the  burden  of  proof  and  the  shift- 
ing of  the  weight  of  testimony  in  accordance  with  the  established 
rules  of  courts  of  justice  liberally  and  not  technically  admin- 
istered. Thus  the  burden  is  upon  the  party  making  the  com- 
plaint, 8  I.  C.  C.  R.  561,  and  relief  will  not  be  granted  without 
proof.  1  I.  C.  C.  R.  185,  1  Int.  Com.  Rep.  627.  But  when  the 
fact  of  a  greater  aggregate  charge  for  a  short  or  long  haul  on  the 
same  line  is  established,  the  burden  is  upon  the  carrier  to  justify 
such  excess.  4  I.  C.  C.  R.  104,  4  Int.  Com.  Rep.  348.  But  where 
the  carrier  makes  application  for  relief  under  the  fourth  section,. 


§    362]  THE    IXTEltSTATE    COMMERCE   LAW.  459^ 

he  assumes  the  l)urdeu  in  the  first  instance.  So  where  there  is  a 
departuie  from  equal  rates  on  several  branches  of  a  road,  the  car- 
rier is  called  upon  to  justify.  2  I.  C.  C.  R.  604,  2  Int.  Com.  Rep. 
431.  8  I.  C.  C.  R.  93,  ruled  that  the  bui-den  is  upon  the  carrier  in 
all  cases,  where  the  departure  from  the  rule  of  the  law  is  made,  to 
show  clearly  that  his  departure  is  justified,  citing  ^lissouri  Pacific 
Ry.  Co.  V.  Texas  &  Pacific  Ry.  Co.,  31  Fed.  Rep.  862.  When  the 
facts  justifying  an  apparent  disparity  in  rates  are  peculiarly  . 
within  tlie  knowledge  of  the  carrier  (6  I.  C.  C.  R.  1),  the  burden 
is  on  him;  thus  the  carrier  must  justify  the  disparity  between 
rates  on  grain  and  grain  products.  3  I.  C.  C.  R.  252,  2  Int.  Com, 
Rep.  604. 

As  to  the  burden  of  proof  on  carriers  as  to  the  reasonableness 
of  increase  of  rates,  where  such  increase  is  made  after  January 
1st,  1910.    See  section  15,  infra. 

The  informal  character  of  the  procedure  before  the  commission 
is  illustrated  by  the  case  (9  I.  C.  C.  R.  602)  where  the  general 
freight  agent  of  the  Texas  &  Pacific  Railroad  Company  referred 
to  the  commission  a  claim  of  a  shipper  for  carload  rating  on  a 
mixed  carload  of  lemons  and  pineapples,  it  appearing  that  the 
tariff  provided  for  a  mixed  carload  of  lemons  and  bananas  and 
pineapples  and  bananas,  but  not  for  a  mixed  carload  of  lemons 
and  pineapples,  the  general  freight  agent  expressing  his  belief 
that  the  claim  was  equitable.  The  commission  said  that  a  matter 
submitted  in  this  way  should  be  treated  as  a  complaint  and 
answer;  the  railroad  company  should  make  answer  and  make 
reparation  to  the  complainant  for  the  rate  above  the  carload  rate. 

"When  an  important  question  is  raised  by  the  pleadings  in  a 
case,  the  determination  of  which  will  affect  others  quite  as  much 
as  the  parties  before  the  commission,  but  the  parties  give  their 
attention  almost  exclusively  to  other  questions,  and  neither  by  the 
evidence  nor  in  argument  supply  the  commission  with  the  infor- 
mation to  enable  it  to  be  understandingly  determined,  the  com- 
mission will  decline  \o  decide  it,  and  leave  the  parties  to  bring 
it  forward  again  as  they  ma}-  be  advised.  1  I.  C.  C.  R.  503,  1  Int. 
Com.  Rep.  722. 

§  362  (274).  Production  of  books  and  papers.— Tn  3  I.  C.  C. 
R.  186.  2  Int.  Com.  Rep.  584,  the  conunission  suggested  the  modes 
of  procedure  by  which  1lie  inconvcuienee  to  defendant  carriers  of 


460  THE   INTERSTATE    COMMERCE   LAW.  [SECTION    13 

producing  books  -where  many  entries  were  involved,  might  be 
avoided  by  petitioner,  as  by  requiring  statements  of  specific 
charges  and  facilities  during  specified  period,  or  taking  deposi- 
tions by  consent  in  advance  of  hearing. 

As  to  proceedings  for  taking  testimony  and  the  production  of 
books  and  papers,  see  this  case,  in  which  the  commission  said  that 
there  was  a  very  manifest  difference  between  ordering  the  produc- 
tion of  books  and  papers  of  carriers  directly  interested  and  those 
of  other  parties,  strangers  to  the  proceeding.  It  was  said  in  this 
case  that  the  books  of  defendant  carrier  as  to  the  rates  charged, 
the  facilities  furnished  and  the  general  movements  of  freight 
were  in  the  nature  of  semi-public  records,  and  statements  should 
be  made  therefrom  on  request  as  promptly  as  practicable.  (See 
this  case  for  what  is  required  for  an  order  for  the  production  of 
books  and  papers.) 

As  to  the  general  powers  of  the  commission  in  compelling  the 
production  of  books  and  papers,  see  section  12,  supra. 

§  363  (275).  The  rulings  of  the  commission  as  precedents. — ■ 

The  rulings  of  the  commission  are  based  so  distinctively  upon 
the  special  facts  of  the  cases  submitted  that  the  doctrine  of  judi- 
cial precedent  has  only  a  limited  application.  Thus  in  deciding 
a  case  against  one  or  more  carriers  charged  with  making  rates 
which  are  unjustly  discriminating  in  a  certain  line  of  traffic,  the 
decision  may  not  apply  at  all  to  the  rates  in  other  sections  where 
facts  may  be  altogether  different.  2  I.  C.  C.  R.  365,  2  Int.  Com. 
Rep.  245.  One  case  can  seldom  be  an  exact  precedent  for  an- 
other, for  each  traffic  situation  presents  points  of  difference,  and 
each  complaint  must  be  judged  upon  its  own  peculiar  facts.  8  I. 
C.  C.  R.  409. 

A  rate  may  be  unreasonable  at  one  time,  and  through  changed 
conditions  may  become  reasonable  at  another  time,  even  before 
the  conclusion  of  the  litigation  as  to  the  reasonability  of  the  rate. 
See  conclusion  of  opinion  in  Nebraska  Rate  case,  169  U.  S.  1.  c. 
p.  550,  42  L.  Ed.  819  (1898). 

The  essentially  shifting  character  of  the  conditions  under 
which  orders  of  the  commission  are  made,  that  is,  administrative 
orders  regulating  the  conduct  of  the  business  of  the  carrier,  and 
not  involving  payments  for  reparation,  is  recognized  in  the  pro- 
vision of  the  following  section  that  such  orders  continue  in  force 
for  a  period  not  exceeding  two  years. 


§    365]  THE   INTERSTATE   COMMERCE   LAW.  461 


Section  14. 

§  364.  Commission's  report  of  investigation. 

365.  Amendment  of  tlie  section. 

366.  Tlie  cliangeil  relation  of  the  commission  to  the  courts. 

367.  Procedure  before  the  commission. 

368.  Reports  of  decisions. 

§  364  (276).  Commission's  report  of  investigation.— Si:c.  14. 

(Attended  March  :>,  18S9,  and  June  20,  1906.)  That  whenever 
an  invcstio'ation  shall  be  made  by  said  commission,  it  shall  be  its 
duty  to  make  a  report  in  writing  in  respect  thereto,  which  shall 

[Commi8.sion    must    make    report    of       iiivoKtiKations,    Htatliie 
its  foiicliiNioiis  liud  order.] 

state  the  conclusions  of  the  Commission,  together  with  its  deci- 
sion, order  or  requirement  in  the  premises ;  and  in  case  damages 

[Repiiriiiioii.l 

are  awarded  such  report  shall  include  the  findings  of  fact  on 
which  the  award  is  made. 

All  reports  of  investigations  made  by  the  commission  shall  be 
entered  of  record,  and  a  copy  thereof  shall  be  furnished  to  the 

I  Reports  of  iiive.s<iK'a<ioii<s  must  be  entered  of  record.    Serv- 
ice  of  oople.s   on   partles.<1 

party  who  may  have  complained,  and  to  any  common  carrier  that 
may  have  been  complained  of. 

The  Commission  may  provide  for  the  publication  of  its  reports 
and  decisions  in  such  form  and  manner  as  may  be  best  adapted 

[Reports    and    decissions.    Authorized    publication    competent 
evidence. 1 

for  public  information  and  use,  and  such  authorized  publications 
shall  be  competent  evidence  of  the  reports  and  decisions  of  the 
commission  therein  contained  in  all  courts  of  the  United  States 
and  of  the  several  states  without  any  further  proof  or  authentica- 

[Piiblicatiou  and  distribution   of  annual   reitort.s   of  Commis- 
sion.] 

tion  thereof.  The  commission  may  also  cause  to  be  printed  for 
early  distribution  its  annual  reports. 

§  365.  The  amendments  of  the  section. — Under  this  section, 
before  tlie  amendment  of  190G,  the  connnissiou  was  reiiuired  to 
"report  its  findings  of  fact  upon  which  its  conclusions  were 
based,"  and  these  "findings  of  fact"  were  made  prima  facie  evi- 
dence thereafter  as  to  all  judicial  proceedings  as  to  every  fact 
found.  Under  the  section  as  amended  in  1906,  the  findings  of 
fact  are  required  to  be  reported  only  in  case  of  an  award  of 
money  damages;  and  tliese  are  the  only  cases  in  which  such  find- 


462  THE   INTERSTATE    COMMERCE   LAW.  [SECTION    14 

ings  are  made  prima  facie  proof  for  any  judicial  proceedings,  see 
infra,  section  16.  In  ctlier  cases,  the  commission's  report  is  only 
required  to  state  its  conclusion  with  its  order. 

§  366.  The  changed  relation  of  the  commissicn.  to  the  courts. 

Under  the  act  before  the  amendments  of  1906,  it  was  said  hy 
Justice  Jackson  in  the  Kentucky  and  Indiana  Bridge  Case,  37 
Fed.  567  (1889),  the  first  important  decision  under  the  act,  that 
the  commission  could  hi  regarded  as  the  general  referee  upon  each 
and  every  circuit  court  of  the  United  States  upon  which  the  ju- 
risdiction was  conferred  of  enforcing  the  rights,  duties  and  obli- 
gations recognized  and  enforced  by  the  act.  This  was  a  case 
under  the  original  act,  and  orders  of  the  commission  were  not 
enforcible  without  the  approval  and  assistance  of  the  courts.  In 
several  cases  the  supreme  court  commented  upon  the  fact  that 
the  act  attributed  prima  facie  effect  to  the  findings  of  fact  made 
by  the  commission.  See  East  Tennessee,  etc.,  Ry.  Co.  v.  Inter- 
state Com.  Com.,  181  U.  S.  1,  45  L.  Ed.  719  (1901)  ;  and  L.  &  N. 
R.  Co.  V.  Behlmer,  175  U.  S.  648,  44  L.  Ed.  309  (1901). 

Under  the  act  as  amended,  it  is  only  in  the  case  of  an  award  of 
money  damages  that  the  findings  of  the  commission  are  made 
prima  facie  evidence  in  judicial  proceedings,  and  those  are  the 
only  eases  which  require  a  proceeding  and  judgment  in  court. 
The  supreme  court,  however,  has  ruled  with  respect  of  the  admin- 
istrative orders  of  the  conmiission,  that  the  findings  of  fact  made 
by  the  commission  and  concurred  in  by  a  federal  circuit  court, 
would  not  be  disturbed  unless  the  record  established  that  a  clear 
and  unmistakable  error  had  been  committed.  See  Illinois  Central 
R.  Co.  v.  Interstate  Commerce  Commission,  206  U.  S.  441,  51  L. 
Ed.  1128,  May  1907,  enforcing  an  order  of  the  commission.  See 
also  10  I.  C.  C.  Rep.  505 ;  and  the  Baltimore  &  Ohio  Coal  Case, 
supra. 

§  367.  The  procedure  before  the  commission.— In  order  to 
determine  a  claim  of  reparation  for  the  charge  of  an  unreason- 
able rate,  the  commission  must  decide  what  rate  should  have  been 
charged,  that  is,  what  is  a  reasonable  rate,  in  order  to  determine 
the  amount  of  damage  to  which  the  party  is  entitled.  As  to  the 
procedure  of  the  commission  in  claims  of  reparation,  it  was  ruled 
that  the  complainant  must  make  proof  of  his  damage  (8  I.  C.  C. 


§    3G7J  THE    INTERSTATE    COMMERCE   LAW.  463 

E.  158)  ;  that  all  the  carriers  on  the  route  need  not  be  before  the 
commission  (6  I.  C.  C.  R.  378),  and  that  speculative  damages  will 
not  be  allowed.  5  I.  C.  C.  R.  97,  3  Int.  Com.  Rep.  740.  Nor  wiU 
the  commission  consider  claims  not  arising  out  of  the  duties  im- 
posed by  the  Act.  4  I.  C.  C.  R.  265,  3  Int.  Com.  Rep.  278.  It  is 
sufficient  for  the  complainant  to  consult  the  published  schedule 
of  charges,  and  he  is  entitled  to  recover  thereon  the  excess  over 
such  schedules  charged  him.  7  I.  C.  C.  R.  255.  See  also  as  to 
conclusions  of  commission  as  to  its  jurisdictions  in  matter  of 
awarding  reparation.    5  I.  C.  C.  R.  84,  3  Int.  Com.  Rep.  711. 

The  subjects  of  reparation  was  discussed  by  the  commission  in 
the  case  of  the  Independent  Refiners  Association,  6  I.  C.  C.  R. 
378,  7  I.  C.  C.  R.  513.  In  this  case  claims  of  reparation  were 
allowed  to  be  filed  in  the  same  proceeding  by  the  individual  ship- 
pers who  were  members  of  the  complaining  association.  The  cir- 
cuit court  however  for  the  western  district  of  Pennsylvania.  82 
Fed.  192  (1897),  refused  to  enforce  this  order,  holding  that  each 
complainant  had  a  plain,  adequate  and  complete  remedy  at  law. 
Thereafter  in  the  case  of  the  Cattle  Raisers  Association  of  Texas, 
10  I.  C.  C.  R.  83,  the  commission  held  that  in  view  of  the  un- 
settled state  of  the  law  as  to  the  recovery  of  claims  of  reparation, 
the  members  of  the  complaining  association  should  file  interven- 
ing petitions,  each  for  his  own  demand. 

While  there  is  no  requirement  in  the  act  that  carriers  com- 
plained of  shall  produce  all  of  their  evidence  before  the  conmiis- 
sion,  and  in  numerous  cases  parties  have  reserved  such  evidence 
until  hearing  was  had  in  the  courts  on  proceedings  instituted  by 
the  commission  to  enforce  their  orders,  the  supreme  court  has  said 
that  this  was  not  the  proper  procedure  (162  U.  S.  1.  c.  196,  40  L. 
Ed.  935),  but  that  all  the  testimony  should  be  submitted  to  the 
commission  for  their  determination  of  the  questions  of  fact.  The 
commission  has  ruled  that  it  is  not  required  to  report  the  details 
of  evidence,  but  only  its  findings  of  fact.  See  1  I.  C.  C.  R.  490, 
1  Int.  Com.  Rep.  773,  where  it  said  that  the  report  and  find- 
ings of  the  commission  upon  evidence  related  only  to  the  ascer- 
tainment and  presentation  of  all  the  material  facts  necessary  to 
clearly  and  justly  present  the  merits  of  the  controversy,  and  the 
commission  therefore  does  not  report  evidence  which  is  only 
cumulative,  or  which  is  immaterial  or  irrelevant,  or  show  details 
of  evidence  all  embraced  in  the  substantial  facts  stated  upon  which 


464  THE,  INTERSTATE    COMMERCE   LAW.  [SECTION    14 

the  findings  and  conclusions  of  the  commission  are  made.  As 
to  the  effect  of  the  commission's  findings  upon  the  questions  of 
reparation  in  view  of  the  constitutional  guaranty  of  trial  by  jury, 
see  infra,  sections  15  and  16. 

§  368  (280).  Reports  of  decisions. — The  provision  for  the 
publication  of  the  reports  of  the  commission  was  added  to  the  sec- 
tion by  the  amendment  of  1S89.  There  were  originally  two  series 
of  reports  containing  the  opinions  of  the  Interstate  Commerce 
Commission.  The  Interstate  Commerce  Reports,  cited  as  "Int. 
Com.  Eep."  were  published  by  the  Lawj^er's  Co-Operative  Pub- 
lishing Company  of  Rochester,  New  York,  and  included  not  only 
the  reports  of  the  commission  but  also  the  proceedings  of  the 
commission,  and  the  reports  of  decisions  of  the  courts  on  inter- 
state commerce  questions.  The  Interstate  Commerce  Commission 
Reports,  cited  as  "I.  C.  C.  R.,"  were  first  published  by  L. 
K.  Strouse  &  Co.  of  New  York. 

The  Lawj^er's  Co-operative  Publishing  Company  purchased  the 
other  series  and  continued  the  publication  of  what  was  then  the 
old  series  of  reports  of  the  commission  up  to  and  including  Vol- 
ume XIII,  June,  1908.  Since  that  time  the  publication  has  been 
assumed  and  carried  on  by  the  government  printing  office  at 
Washington  which  has  published  the  reports  from  Volume  XIV 
to  Volume  XX,  Volume  XXI  being  now  (Oct.  1911),  issued  in 
advance  sheets.  The  reports  now  published  are  cited  as  I.  C.  C. 
R.  The  five  volumes  of  the  discontinued  Strouse  Series  contain 
the  same  cases  included  in  Volumes  I  to  IV  of  the  Co-Operative 
Series. 

The  reports  contain  not  only  the  written  opinion  or  reports  of 
the  commission  but  also  a  list  of  the  cases  disposed  of  by  the  com- 
mission without  printed  report  during  the  time  covered  by  the 
volume.  Volume  XV  (1910),  contains  an  appendix  and  a  table 
of  commodities,  the  transportation  whereof  was  considered  in  the 
reports  of  tlie  commission  from  Volumes  I  to  XV,  that  is,  during 
the  years  1887  to  1909. 

In  addition  to  these  published  reports  of  what  may  be  termed 
the  formal  opinions  of  the  commission,  it  issues  from  time  to 
time,  reports  of  "conference  rulings"  of  the  commission,  which 
are  made  in  conference  on  questions  informally  raised  or  submit- 
ted in  correspondence.     It  also  issues  from  time   to  time,   as 


§    3G8]  THE   INTERSTATE    COMMERCE   LAW.  465 

occasion  rcqniros,  tarifi'  eii-culars  contaiiiiiifr  recrulations  concern- 
ing tlie  filing  and  construetion  of  frciglit  tariffs,  classifications  and 
passenger  fare  schedules,  and  also  concerning  the  tariffs  and 
classifications  of  express  companies.  These  bulk'tins  of  confer- 
ence rulings,  and  tariff  circulars  are  issued  as  circumstances  re- 
quire, for  the  information  of  carriers  and  shippers,  and  are 
printed  by  the  government  printing  office.  Bulletins  are  also 
issued  quarterly  by  the  commission,  containing  statements  of 
accidents  reported  to  the  commission  as  required  by  law,  see 

infra.    Appendix . 

30 


466  THE    INTERSTATE    COMMERCE    LAW.  [SECTION    15 


Section  15, 

§  369.  Section  15  as  amended  in  1910. 

370.  The  amendments  of  1906  and  of  1910. 

371.  The  constitutionality  of  the  amendment  of  1906  sustained. 

372.  The  enlarged  powers  of  the  commission  under  section. 

373.  The  establishment  of  through  routes. 

374.  Switch    connections    and    through    routing    between    steam    and 

electric  railway. 

375.  The  two  year  limitation  of  commission's  orders. 

376.  Selection  of  the  route  by  the  shipper, 

377.  The  advanced  rate  cases  of  1910. 

378.  Jurisdiction  over  contracts  of  carriers, 

379.  Allowances  by  carriers  for  shipper's  services  must  not  Involve 

undue  preference. 

380.  The  powers  of  the  commission  construed. 

§  369.  Section  15  as  amended  in  1910. — Sec.  15.  (As  amcmlrd 
June  29,  1906,  and  June  IS,  1910.)  That  whenever,  after  full 
hearing  upon  a  complaint  made  as  provided  in  section  thirteen  of 

[Commission  may  determine  and  prescribe  just  and 
reasonable  rates  and  elassifieations  to  be  observed  as 
as   maximum   charges.] 

this  Act.  or  after  full  hearing  under  an  order  for  investigation 
«nd  hearing  made  by  tlie  Commission  on  its  own  initiative  (either 
in  extension  of  any  pending  complaint  or  without  any  complaint 
whatever)  the  Commission  shall  be  of  opinion  that  any  individual 
or  joint  rates  or  charges  whatsoever  demanded,  charged,  or  col- 
lected by  any  common  carrier  or  carriers  subject  to  the  provi- 
sions of  this  Act  for  the  transportation  of  persons  or  property  or 
for  the  transmission  of  messages  by  telegraph  or  telephone  as  de- 
fined in  the  first  section  of  this  Act,  or  that  any  individual  or 
joint  classifications,  regulations,  or  practices  whatsoever  of  such 
"Carrier  or  carriers  subject  to  the  provisions  of  this  Act  are  un- 
just or  unreasonable  or  unjustly  discriminatory,  or  unduly 
preferential  or  prejudicial  or  otherwise  in  violation  of  any  of 
the  provisions  of  tliis  Act,  the  Commission  is  hereby  autliorized 
and  empowered  to  determine  and  preseri]:)e  what  will  be  the  just 
and   reasonal)le    individual    or   joint  rate    or    rates,    charge    or 

[C'omm!ssi<»n  may  determine  and  preseril>e  just  and  rea- 
sonable rcKulations  or  practices.  Commission  may  or- 
der carriers  to  cease  and  desist  from  full  extent  of 
violations  found.  Orders  of  the  commission  effective 
as  prescribed,  but  in  not  less  than  thirty  days.l 

•charges,  to  be  thereafter  oliserved  in  such  case  as  the  maximum  to 
be  charged,  and  what  individual  or  joint  classification,  regula- 
tion, or  practice  is  just,  fair,  and  reasonable,  to  be  thereafter  fol- 


§    369]  THE   INTERSTATE    COMMERCE   LAW.  4G7 

lowed,  and  to  make  an  order  tliat  the  carrier  or  carriers  shall 
cease  and  desist  from  such  violation  to  tlie  extent  to  which 
the  Commission  finds  the  same  to  exist,  and  shall  not  thereafter 
publish,  demand,  or  eolJcL't  any  rate  or  chart^e  for  such  transpor- 
tation or  transmission  in  excess  of  the  maximum  rate  or  char^'e  so 
prescribed  and  sliall  adopt  tlie  classification  and  sliall  conform  to 

[()r«UTM  nIiiiII  coiitiiiiie  in  foroe  not  pxooejUnj?  two  yejirs, 
iinloH.s  MnM|ionil<>(l  or  set  iiNiale  by  comnilMMlon  or  roiirt.] 

and  observe  the  re^'ulation  or  practice  so  prescribed.  All  orders 
of  the  Connnission,  except  orders  for  the  payment  of  money, 
shall  take  effect  within  such  reasonable  time,  not  less  than  thirty 
days,  and  shall  continue  in  force  for  such  period  of  time,  not  ex- 
ceeding two  years,  as  sliall  be  prescril)(^d  in  the  order  of  the 
Commission,  unless  tlie  same  shall  be  suspended  or  modified  or  set 
aside  by  the  Connnission,  or  be  suspended  or  set  aside  by  a  court 

[\>'hon  ciirrl»T.s  faU  to  siR-ree  on  divisions  of  joint  rate, 
iMtiiiniission  may  i>re»crll>e  proportion  of  such  rate  to 
he    reoi'ive«l    by   each   carrier.] 

of  competent  jui-isdiction.  Whenever  the  carrier  or  carriers,  in 
obedience  to  such  order  of  the  Commission  or  otherwise,  in  re- 
spect to  joint  rates,  fares,  or  charges,  shall  fail  to  agree  among 
themselves  upon  the  api)ortionment  or  division  thereof,  the  Com- 
mission may,  after  hearing,  make  a  supplemental  order  prescrib- 
ing the  just  and  reasonable  proportion  of  such  joint  rate  to  be 
received  by  each  carrier  party  thereto,  which  order  shall  take 
effect  as  a  part  of  the  original  order. 

[Investigation  of  new  .schedules. 1 

AVlicnever  there  shall  be  filed  with  the  Commission  any 
schedule  stating  a  new  individual  or  joint  rate,  fare,  or  charge, 
or  any  new  individual  or  joint  classification,  or  any  new  indi- 
'  vidual  or  joint  regulation  or  practice  affecting  any  rate.  fare,  or 
charge,  the  Connnission  shall  have,  and  it  is  hereby  given, 
authority,  either  upon  complaint  or  upon  its  own  initiative  with- 
out complaint,  at  once,  and  if  it  so  orders,  without  answer  or 
other  formal  pleading  b}'  the  interested  carrier  or  carriers,  but 
upon  reasonable  notice,  to  enter  upon  a  hearing  concerning  the 
propriety  of  such  rate,  fare,  charge,  classification,  regulation,  or 
practice ;  and  pending  such  hearing  and  the  decision  thereon  the 

[Commission    may    suspend    new   .schedules.] 

Commission  upon  filing  with  such  schedule  and  delivering  to  the 
carrier  or  carriers  affected  thereby  a  statement  in  writing  of  its 
reasons  for  such  suspension  may  suspend  the  operation  of  such 
schedule  and  defer  the  use  of  such  rate,  fare,  charge,  classifica- 
tion, regulation,  or  practice,  but  not  for  a  longer  period  than  one 
hundred  and  twenty  days  beyond  the  time  when  such  rate,  fare, 
charge,  classification,  regulation,  or  practice  would  otherwise  go 
into  effect;  and  after  full  hearing,  whether  com]ileted  before  or 
after  the  rate,  fare,  charge,  classification,  regulation,  or  practice 


468  THE   INTERSTATE    COMMERCE   LAW.  [SECTION    15 

goes  into  effect,  the  Commission  may  make  such  order  in  refer- 
ence to  such  rate,  fare,  charge,  classification,  regulation,  or  prac- 
tice as  would  be  proper  in  a  proceeding  initiated  after  the  rate, 
fare,  charge,  classification,  regulation,  or  practice  had  become 

[Coiumissioii  may  extend  suspension.] 

effective:  Provided,  That  if  any  such  hearing  can  not  be  con- 
eluded  within  the  period  of  suspension,  as  above  stated,  the  Inter- 
state Commerce  Commission  may,  in  its  discretion,  extend  the 
time  of  suspension  for  a  further  period  not  exceeding  six  months. 

[Burden  of  proof  on  carrier  as  io  reasonableness  of  In- 
creased  rates.] 

At  any  hearing  involving  a  rate  increased  after  January  first, 
nineteen  hundred  and  ten,  or  of  a  rate  sought  to  be  increased 
after  the  passage  of  this  Act,  the  burden  of  proof  to  show  that 
the  increased  rate  or  proposed  increased  rate  is  just  and  reason- 
able shall  be  upon  the  common  carrier,  and  the  Commission  shall 
give  to  the  hearing  and  decision  of  such  questions  preference  over 
all  other  questions  pending  before  it  and  decide  the  same  as 
speedily  as  possible. 

The  Commission  may  also,  after  hearing,  on  a  complaint  or 
upon   its   own   initiative  without   complaint,    establish   through 

[Commission    may    establish    through    routes    and    joint 
rates  and  classifications.] 

routes  and  joint  classifications,  and  may  establish  joint  rates  as  the 
maximum  to  be  charged  and  may  prescribe  the  division  of  such 
rates  as  hereinbefore  provided  and  the  terms  and  conditions 
under  which  such  through  routes  shall  be  operated,  whenever  the 
carriers  themselves  shall  have  refused  or  neglected  to  establish 
voluntarily  such  through  routes  or  joint  classifications  or  joint 
rates ;  and  this  provision  shall  apply  when  one  of  the  connecting 
carriers  is  a  water  line.  The  Commission  shall  not,  however, 
establish  any  through  route,  classification,  or  rate  between  street 
electric  passenger  railways  not  engaged  in  the  general  business 
of  transporting  freight  in  addition  to  their  passenger  and  express 
business  and  railroads  of  a  different  character,  nor  shall  the  Com- 
mission have  the  right  to  establish  any  route,  classification,  rate, 
fare,  or  charge  when  the  transportation  is  wholly  by  water,  and 
any  transportation  by  water  affected  by  this  Act  shall  be  subject 
to  the  laws  and  regulations  applicable  to  transportation  by  water. 
And  in  establishing  such  through  route,  the  Commission  shall 

[Limitation   on   through   route  power.] 

not  require  any  company,  without  its  consent,  to  embrace  in  such 
route  substantially  less  than  the  entire  length  of  its  railroad  and 
of  any  intermediate  railroad  operated  in  conjunction  and  under 
a  common  management  or  control  therewith  which  lies  between 
the  termini  of  such  proposed  through  route,  unless  to  do  so  would 
make  such  through  route  unreasonably  long  as  compared  with 


§    3G9]  TJIE    IXTERSTATE    COMMERCE   LAW.  4G9 

another  practicable  through  route  which  could  otherwise  be  es- 
tablished. 

[Selection   of  roiile  by  dliiiiper.l 

In  all  cases  where  at  the  time  of  delivery  of  property  to  any 
railroad  corporation  being  a  common  carrier  for  transportation 
subject  to  the  provisions  of  this  Act  to  any  point  of  destination, 
between  which  and  the  point  of  such  delivery  for  shipment  two 
or  more  through  routes  and  through  rates  shall  have  been  estab- 
lished as  in  this  Act  provided  to  which  through  routes  and 
through  rates  such  carrier  is  a  party,  the  person,  firm,  or  corpora- 
tion making  such  shipment,  subject  to  such  reasonable  exceptions 
and  regulations  as  the  Interstate  Commerce  Commission  shall 
from  time  to  time  prescribe,  shall  have  the  right  to  designate  in 
writing  by  which  of  such  through  routes  such  property  shall  be 
transported  to  destination,  and  it  shall  thereupon  be  tlie  duty  of 
the  initial  carrier  to  route  said  property  and  issue  a  through  bill 
of  lading  therefor  as  so  directed,  and  to  transport  said  property 
over  its  own  line  or  lines  and  deliver  the  same  to  a  connecting  line 
or  lines  according  to  such  through  route,  an^  it  shall  be  the  duty 
of  each  of  said  connecting  carriers  to  receive  said  property  and 
transport  it  over  the  :sai(i  line  or  lines  and  deliver  the  same  to  the 
next  suceeding  carrier  or  consignee  according  to  the  routing  in- 
structions in  said  bill  of  lading :  Provided,  ho  wee cr,  That  the 
shipper  shall  in  all  instances  have  the  right  to  determine,  where 
competing  lines  of  railroad  constitute  portions  of  a  through  line 
or  route,  over  which  of  said  competing  lines  so  constituting  a  por- 
tion of  said  through  line  or  route  his  freight  shall  be  transported. 

[Iiilawful   to  Rive  or  receive  information   relative  to  ri- 
vals' shiimients.] 

It  shall  be  unlawful  for  any  common  carrier  subject  to  the  pro- 
visions of  this  Act,  or  any  officer,  agent,  or  ^iiployee  of  such  com- 
mon carrier,  or  for  any  other  person  or  corporation  lawfully 
authorized  by  such  common  carrier  to  receive  information  there- 
from, knowingly  to  disclose  to  or  permit  to  be  acquired  by  any 
person  or  corporation  other  than  the  shipper  or  consignee,  Avith- 
out  the  consent  of  such  shipper  or  consignee,  any  information 
concerning  the  nature,  kind,  quantity,  destination,  consignee,  or 
routing  of  any  property  tendered  or  delivered  to  such  common 
carrier  for  interstate  transportation  which  information  may  be 
used  to  the  detriment  or  prejudice  of  such  shipper  or  consignee, 
or  which  may  improperly  disclose  his  business  transactions  to  a 
competitor;  and  it  shall  also  be  unlawful  for  any  person  or  cor- 
poration to  solicit  or  knowingly  receive  any  such  information 

[E]xceptiou8.] 

which  may  be  so  used:  Provided,  That  nothing  in  this  Act  shall 
be  construed  to  prevent  the  giving  of  such  information  in 
response  to  any  legal  process  issued  under  the  authority  of  any 


470  THE  INTERSTATE    COMMERCE   LAW.  [SECTION    15 

state  or  federal  court,  or  to  any  officer  or  agent  of  the  Govern- 
ment of  the  United  States,  or  of  any  State  or  Territory,  in  the  ex- 
ercise of  his  powers,  or  to  any  ot^eer  or  other  dnly  authorized 
person  seeking  such  information  for  the  prosecution  of  persons 
charged  with  or  suspected  of  crime;  or  information  given  by  a 
common  carrier  to  another  carrier  or  its  duly  authorized,  agent, 
for  the  purpose  of  adjusting  mutual  traffic  accounts  in  the  ordi- 
nary course  of  business  of  such  carriers, 

[Penalty.] 

Any  person,  corporation,  or  association  violating  any  of  the 
provisions  of  the  next  preceding  paragraph  of  this  section  shall 
be  deemed  guilty  of  a  misdemeanor,  and  for  each  offense,  on  con- 
viction, shall  pay  to  the  United  States  a  penalty  of  not  more  than 
one  thousand  dollars. 

[Comniissioii  may  determine  just  and  reasonable  charge 
or  allowance  for  service  rendered  by  owner  of  property 
transported  or  for  any  instrumentality  furnished  Ijy 
such   owner   and  used   in   such   transportation.] 

If  the  owner  of  property  transported  under  this  Act  directly  or 
indirectly  renders  ftny  service  connected  with  such  transpor- 
tation, or  furnishes  any  instrumentality  used  therein,  the  charge 
and.  allowance  therefor  shall  be  no  more  than  is  just  and  reason- 
able, and  the  Commission  may,  after  hearing  on  a  complaint  or 
on  its  own  initiative,  determine  w^hat  is  a  reasonable  charge  as  the 
maximum  to  be  paid  by  the  carrier  or  carriers  for  the  services  so 
rendered  or  for  the  use  of  the  instrumentality  so  furnished,  and 
fix  the  same  by  appropriate  order,  wliicli  order  shall  have  the 
same  force  and  effect  and  be  enforced  in  like  manner  as  the  orders 
above  provided  for  under  this  section. 

[Enumeration  of  powers  in  this  section  not  exclusive.] 

The  foregoing  enumeration  of  powers  shall  not  exclude  any 
power  which  the  Commission  would  otherwise  have  in  the  making 
of  an  order  under  the  provisions  of  this  Act. 

§  370.  The  amendments  of  1906  and  of  1910. — This  section 
has  been  more  radically  changed  by  the  successive  amendments 
of  the  act  than  any  other.  In  its  original  form,  it  provided  only 
for  a  notice  to  the  common  carrier  to  cease  from  the  violation  of 
the  act,  after  the  commission  had  found  that  such  violation  had 
been  committed.  Under  the  act  as  originally  framed,  this  notice 
was  jurisdictional,  as  it  was  a  necessary  basis  for  a  subsequent 
procedure  in  court  against  the  carrier  to  enforce  the  order  of  the 
commission.    See  7  I.  C.  C.  Rep.  286. 

In  the  amendatory  act  of  1906,  known  as  the  Hepburn  Act, 
section  15  was  in  effect  re-written,  as  radical  changes  were  made 
in  the  enlargement  of  the  powers  of  the  commission,  in  empower- 


§    371]  TIIE   INTERSTATE    COMMERCE   LAW.  4(1 

ing  it  to  declare  any  rate  or  regulation  or  practice  of  a  carrier 
was  unjust  or  unreasonable,  and  also  to  determine  and  prescribe 
a  rate  or  regulation  in  fnturo,  to  establish  tli rough  routes  under 
certain  conditions,  and  joint  rates  and  classifications.  In  I'JIO, 
further  radical  enlargements  were  made  in  the  powers  of  the  com- 
mission, in  that  it  was  given  authority  to  investigate  any  rate 
increase,  and  to  suspend  the  same  pending  investigation,  with  the 
burden  of  proof  upon  the  carrier  to  show  the  reasonableness  of 
the  increased  rate;  to  establish  through  routes  and  joint 
rates  and  classifications  without  the  limitation  "that  no  reason- 
able or  satisfactory  through  routes  exists"  imposed  in  the  original 
amendment  of  1906 ;  and  also  empowering  the  shipper  to  elect  his 
own  through  route,  and  making  it  unlawful  for  any  carrier  to 
give  information  concerning  rival  shipments,  and  authorizing  the 
commission  to  determine  the  just  and  reasonable  allowance  for 
any  service  rendered  by  any  owner  of  property  transported  and 
for  any  instrumentality  furnished  by  the  owner. 

The  provision  in  the  original  section  for  a  formal  notice  of  the 
commission's  order  to  the  carrier  is  omitted,  as  under  the  suc- 
ceeding sections  the  orders,  other  than  for  the  payment  of  rep- 
aration damages,  are  made  directly  enforcible  under  penalties  on 
the  carrier  by  order  of  the  commission,  and  a  court  procedure  for 
enforcement  is  no  longer  required. 

§  371.  The  constitutionality  of  the  amendment  of  1906  sus- 
tained.— This  section  as  amended  by  the  act  of  1906,  prior  to 
the  amendment  of  1910,  was  held  constitutional  and  valid  by  the 
circuit  judges  of  the  fifth  circuit  in  L.  &  N.  R.  Co.  v.  Interstate 
Commerce  Commission,  184  Fed.  118  (April,  1910).  Suit  was 
brought  by  the  railroad  company  to  enjoin  the  enforcement  of  the 
orders  of  the  commission  reducing  rates  and  fixing  maximum  rates 
between  New  Orleans  and  certain  other  southern  cities.  17  I.  C.  C. 
E.  p.  231.  The  court  said,  that  the  power  delegated  b}'  congress  to 
the  commission  to  prescribe  railroad  rates  was  legislative  in  its 
nature,  and  since  it  concerned  the  administrative  affairs  of  the 
government,  whidi  by  reason  of  variable  conditions  could  not  be 
covered  in  detail  by  direct  legislation,  its  delegation  was  not  in 
violation  of  the  constitution  and  the  power  may  be  as  fully  exer- 
cised by  the  commission,  as  congress  might  have  exercised  it,  sub- 
ject to  any  limitation  imposed  by  congress  itself. 


472  THE   INTERSTATE    COMMERCE   LAW.  [SECTION    15 

"The  provision  of  the  constitution,  art.  I  par.  9,  that  no  prefer- 
ence should  be  given  by  any  regulation  of  commerce  or  revenue 
to  the  ports  of  one  state  over  those  of  another"  did  not  prevent 
such  exercise  of  the  power  of  congress  by  delegated  authority  to 
regulate  commerce  between  ports  of  different  states,  merely  be- 
cause such  regulation  may  incidentally  affect  the  commerce  of  a 
port  in  still  another  state. 

It  was  also  held  that  in  fixing  a  maximum  rate  to  be  charged  by 
a  carrier  there  was  no  restriction  of  the  commission  in  respect  to 
the  matters  which  it  may  take  into  consideration,  or  the  weight 
which  it  should  give  to  such  matters  in  informing  itself  what 
opinion  it  ought  to  give,  except  that  it  should  not  abuse  its 
authority  and  proceed  arbitrarily  without  regard  to  the  justice  of 
the  case  or  give  a  judgment  not  fairly  within  its  power. 

§  372.  The  enlarged  powers  of  the  commission. — It  was  con- 
tended before  the  supreme  court  in  the  Illinois  Central  coal  car 
distribution  case,  supra  (1910),  that  section  15  of  the  act  as 
amended  in  1906  did  not  empower  the  Interstate  Commerce  Com- 
mission to  make  the  order  regulating  coal  car  distribution  and 
that  the  power  conferred  related  only  to  rates  which  were  not  in- 
volved in  this  case ;  but  the  court  said  that  this  contention  would 
frustrate  the  very  purpose  for  which  the  amendment  was  enacted 
and  that  the  antecedent  construction  which  the  Interstate  Com- 
merce Act  had  necessitated  and  the  remedial  character  of  the 
amendments  of  1906  all  served  to  show  the  want  of  merit  in  this 
contention.  The  court,  therefore,  held  that  the  Commission  was 
fully  empowered  under  the  act  as  amended  in  1906  to  make  the 
order  regulating  coal  car  distribution. 

In  the  ''general  damage"  case,  17  I.  C.  C.  R.  361  (1909)  it  was 
said  that  section  15  w^is  the  dominating  and  controlling  expres- 
sion of  the  real  object  and  meaning  of  the  act  in  its  present  form, 
and  that  it  made  of  the  commission  what  it  was  undoubtedly  in- 
tended to  be,  a  special  expert  body  created  for  the  purpose  of 
dealing  with  the  rates  and  rules,  regulations  and  practices  of  car- 
riers affecting  rates.  In  this  case  the  commission  said  that  since 
its  original  enactment  the  act  to  regulaite  commerce  had  been 
amended  many  times,  without  being  redrafted  as  a  whole  in  order 
to  bring  its  various  provisions  into  harmony  with  one  another, 
and  the  result  was  the  act  was  not  free  from  inconsistencies,  and 
that  some  times  doubt  arose  as  to  its  real  meaning ;  and  by  way  of 


§    373]  THE   INTERSTATE   COMMERCE   LAW.  473 

illiistrnlion  it  was  shown  that  the  supreme  court  had  been  com- 
pelled in  the  Abilene  Coal  case  to  read  out  of  the  act  certain  lan- 
^age  of  sections  8,  9  and  22,  in  order  that  the  act  should  not 
destroy  itself.    See  supra,  sec.  9, 

The  commission,  prior  to  the  amendment  of  1906,  was  an  in- 
vestigating administrative  board,  its  recommendations  being  en- 
forced only  by  the  action  of  the  courts ;  while  under  the  amend- 
ments of  1906  and  1910  primarily  in  this  section  15,  it  has  not 
only  the  quasi  judicial  power  of  determining  what  existing  rates 
and  regulations  are  unreasonable  and  also  of  suspending  the  tak- 
ing effect  of  an  increased  rate  pending  the  investigation  thereof, 
but  also  the  essentially  legislative  and  administrative  power  of 
substituting  therefor  a  rate  and  regulation  in  futuro;  and  its 
conclusions  and  orders  are  directly  enforcible  by  penalties  unless 
suspended  or  set  aside  by  the  action  of  the  court  invoked  by  the 
carrier.  This  power  of  the  commission  to  determine  the  reason- 
ableness of  an  existing  rate  or  regulation  is  incidental  and  essen- 
tial in  fixing  a  reasonable  rate  or  regulation  for  the  future. 

It  was  held  in  N.  Y.  C.  &  H.  R.  R.  Co.  v.  Interstate  Commerce 
Commission,  supra,  that  tlie  commission  has  authority  under  this 
amended  section  to  make  an  order  that  a  carrier  shall  cease  and 
desist  from  violating  the  Interstate  Commerce  Act  to  the  extent 
to  which  the  commission  finds  that  such  violation  exists;  and 
whore  discrimination  exists,  it  may  prescribe  a  relative  rate,  in- 
stead of  a  maximum  rate,  which  will  enable  the  carrier  to  discon- 
tinue the  discrimination  without  reducing  the  rate  to  other 
shippers  or  to  other  commodities,  and  that  the  commission  was 
not  required  to  prescribe  doubtful  regulations  and  remedies 
which  are  not  necessary  to  remove  the  discrimination,  and  that  it 
may  properly  authorize  the  carrier  to  make  such  regulation 
should  the  necessit}-  arise.  In  this  case  the  court  made  an  order 
that  the  complainant,  a  New  York  miller,  was  entitled  to  a  milling 
in  transit  rate  given  western  shippers  for  purposes  of  export. 

§  373.  The  establishment  of  through  routes.— In  more  than 
one  instance,  the  amend iiicnts  in  the  act  of  1910  were  the  result  of 
the  judicial  construction  of  the  provisions  of  the  act  of  1906. 
Thus  in  the  section  as  amended  in  1906.  the  commission  was  au- 
thorized to  establish  an  additional  through  route  when  no  reason- 
*ible  or  satisfactoiy  through  route  existed,  and  the  commission 


474  THE   INTERSTATE    COMMERCE   LAW,  [SECTION    15 

acting  thereunder,  16  I.  C.  C.  Rep.  300,  established  a  through 
route  and  joint  rate  for  passenger  travel  between  points  in  the 
northwestern  part  of  tlie  state  of  Washington  to  eastern  destina- 
tions via  Portland,  and  this  order  was  resisted  in  the  courts  upon 
the  grounds  that  there  was  already  in  existence  a  reasonable  and 
satisfactory  through  route.  It  was  held  by  the  supreme  court  in 
Interstate  Commerce  Commission  v.  Northern  Pacific  Ry.  Co., 
216  U.  S.  538,  54  L.  Ed.  608  (1910),  that  this  condition  whether 
a  reasonable  or  satisfactory  through  route  existed  was  jurisdic- 
tional, and  the  conclusion  of  the  commission  was  subject  to  review 
by  the  courts,  and  that  the  personal  preferences  of  travelers  for 
a  more  southern  route  to  the  Pacific  w^ere  not  sufficient  to  justify 
the  order,  and  the  judgment  of  the  circuit  court  enjoining  the 
enforcement  of  the  commission 's  order  was  affirmed. 

In  the  amendment  of  1910,  this  provision  as  to  the  reasonable- 
ness of  an  existing  route  was  stricken  out,  and  the  commission 
was  given  authority  to  establish,  either  on  a  complaint  or  upon 
its  own  initiative,  through  routes  and  joint  classifications  and 
joint  rates,  and  the  terms  and  conditions  under  which  those 
through  routes  shall  be  operated,  whenever  the  carriers  shall  have 
failed  or  refused  to  voluntarily  establish  such  through  routes  and 
classifications  and  joint  rates ;  and  this  provision  applies  when 
one  of  the  connecting  carriers  is  a  water  line. 

Other  limitations  in  the  right  of  the  commission  to  order 
through  routing  remain.  The  commission  can  not  require  a 
company,  without  its  consent,  to  embrace  in  the  route  substanti- 
ally less  than  the  entire  length  of  its  railroad,  etc.  This  pro- 
vision has  not  been  construed  by  the  courts  or  the  commission. 
There  is  also  a  limitation  as  to  the  through  routing  between 
street  electric  passenger  railways  and  others  which  has  been 
construed  by  the  commission.  See  §  374,  infra.  See  also  the 
annual  reports  of  the  commission  on  this  subject.  Report  of 
1909,  page  36;  report  of  1910,  page  19. 

§  374.  Switch  connections  and  through  routing  between 
steam  and  electric  railway. — The  authorization  of  the  commis- 
sion to  establish  through  routes  and  joint  rates  and  classifications 
is  subject  to  the  proviso  that  the  commission  shall  not  establish 
any  "through  route  classification  or  rate  between  street  electric 
jDassenger  railways  not  engaged  in  the  general  business  of  trans- 


§    375j  TllK    INTERSTATE    COMMERCE   LAW.  475 

porting  frciglit  in  addition  to  their  passenger  and  express  busi- 
ness and  railroads  of  a  different  character."  The  commission,  in 
20  I.  C.  C.  R.  4SG,  construed  tlie  section  with  this  proviso  as 
authorizing  througli  routes  and  joint  rates  between  a  steam  rail- 
road and  a  street  electric  railway  where  the  latter  has  a  freight  as 
well  as  a  passenger  traffic.  The  commission  said  that  it  was  the 
purpose  of  congress  to  widen  the  sco^e  of  the  powers  of  the  com- 
mission to  establish  through  routes  and  joint  rates  rather  than 
to  narrow  tliem,  and  to  leave  in  the  commission  full  discretion  to 
act  in  such  cases  in  the  light  of  all  tiie  facts  and  circumstances 
and  do  what  may  seem  fair,  reasonable  and  equitable  in  the  case. 

In  this  case,  that  of  an  electric  railroad  in  Ohio,  the  commis- 
sion said  that  it  was  immaterial  that  the  electric  street  railway 
had  no  right  under  the  state  law  to  demand  a  switch  connection 
and  an  interchange  of  traffic  with  a  steam  railway.  Such  a  limita- 
tion was  only  controlling  as  to  local  traffic,  and  could  not  be  per- 
mitted to  operate  as  an  impediment  to  the  movement  of  interstate 
traffic,  where  congress  had  legislated  upon  the  subject  by  requir- 
ing such  connection  and  interchange  under  certain  conditions, 
which  in  this  case  were  shown  to  exist. 

The  commission  said  that  it  would  not  ordinarily  lend  its  aid 
to  an  effort  by  the  carrier  to  secure  traffic  that  was  reasonably 
tributary  to  another  line,  but  on  the  other  hand  it  was  unfair  to 
impose  upon  shippers  the  burden  of  an  unduly  long  wagon  haul. 
The  commission  therefore  denied  through  routes  and  through 
billing  to  points  ou  the  complainant's  line  where  it  paralleled 
and  closely  approached  the  tracks  of  one  or  more  of  the  defend- 
ants, but  required  on  the  special  facts  of  the  case  in  the  interest 
of  the  shippers  connections  at  other  points  from  five  to  ten 
miles  distant  by  the  wagon  roads.  The  commission  said  that  the 
case  did  not  justify  requiring  the  defendants  to  go  to  the  expense 
of  printing  their  tariffs  and  getting  the  concurrence  of  their 
connections  in  new  joint  through  rates  to  and  from  the  local 
points  on  complainant's  line,  and  said  that  it  would  be  sufficient 
'for  complainant  to  file  its  local  rates  with  the  commission,  which 
would  make  them  applicable  under  the  rules  on  through  inter- 
state movements. 

§  375.  The  two  year  limitation  of  commission's  orders. — 
The  statute  as  aiiicndrd  provides  tliat  all  orders  of  the  eoiiiinis- 


476  THE   INTERSTATE    COMMERCE   LAW.  [SeCTIOX    15 

sion,  excepting  orders  for  the  payment  of  money,  shall  take  effect 
within  such  reasonable  time,  not  less  than  thirty  days,  and  shall 
continue  in  force  for  such  period  of  time,  not  exceeding  two 
years,  as  shall  be  prescribed  in  the  order  of  the  commission.  The 
effect  of  this  limitation  in  time  is  to  give  the  carrier  freedom  at 
the  expiration  of  the  time  to  exercise  his  own  intiative  as  to  mat- 
ters affected  by  the  order.  This  was  illustrated  in  a  case  recently 
decided  by  the  supreme  court,  supra,  §  238,  known  as  the  Trade 
Zone  Case,  wherein  the  order  of  the  commission,  directing  the 
reduction  of  class  rates  from  East  St.  Louis  to  Kansas  City  when 
applied  to  business  from  the  Atlantic  seaboard  on  the  ground 
that  the  through  rates  of  the  Missouri  River  cities  were  too  high 
and  unreasonable,  was  finally  affirmed  by  the  supreme  court  only 
ten  days  before  the  expiration  of  the  tAvo  years '  limitation  of  the 
two  years'  order;  and  immediately  upon  that  expiration  the 
rate  thus  adjudged  unreasonable  was  restored  by  the  railroads. 
See  commission's  report  1909  p.  33,  and  1910  p.  16. 

An  order  of  the  commission  relating  to  rates  is  not  invalidated 
because  it  fails  to  prescribe  the  time  it  shall  remain  in  force; 
but  in  such  case  the  order  remains  in  force  for  two  years.  N.  Y. 
C.  &  H.  H-.  R.  Co.  v.  Interstate  Commerce  Commission,  circuit 
court  of  N.  Y.,  168  Fed.  131  (1909). 

An  appeal  from  a  decree  dismissing  a  suit  to  enjoin  the  en- 
forcement of  an  order  of  the  commission  requiring  a  carrier  to 
desist  from  granting  a  shipper  an  alleged  undue  preference,  will 
not  be  dismissed  by  the  supreme  court  as  presenting  merely  a 
moot  case  because  the  period  of  two  years  during  which  the  order 
was  by  its  term  continued,  had  expired.     See  Southern  Pacific 

Terminal  Co.  et  al.  v.  Commission,  219  U.  S.  498,  55  L.  Ed. 

(1911).  The  court  said  that  notwithstanding  this  limitation 
the  orders  of  the  commission  were  in  one  sense  continuing  and 
might  be  the  basis  of  further  proceedings  by  way  of  reparation, 
and  that  otherwise  the  parties  would  have  their  rights  determined 
without  a  chance  of  redress.     The  same  ruling  was  made  in 

Southern  Pacific  Co.  v.  Commission,  219  U.  S.  433,  55  L.  Ed. 

(1911),  where  the  court  reversed  the  circuiet  court,  northern  dis- 
trict of  California,  in  their  opinion  in  177  Fed.  963,  which  sus- 
tained the  order  of  the  commission,  14  I.  C.  C.  R.  461,  and  held 
the  order  void,  though  more  than  two  years  had  elapsed  since  it 
became  effective. 


§    377]  Till-:    INTERSTATE    COMMERCE   T.AW,  477 

§  376.  Selection  of  the  route  by  the  shipper. — The  supreme 
court  had  lield  in  the  Southern  California  i^'ruit  Case,  {supra 
§  300),  that  the  control  of  tlirough  routing  hy  the  carrier  aa 
a  condition  of  granting  a  through  rate  was  not  violative  of  any 
section  of  the  Interstate  Commerce  Act.  It  is  provided  in  this 
section  by  the  amendment  of  1910,  that  the  siiipper  shall  have 
the  right  to  select  his  own  through  route,  where  there  are  two 
or  more  and  to  designate  in  writing  by  which  of  said  through 
routes  his  property  shall  be  transported  to  its  destination.  It 
is  made  the  duty  of  the  carrier,  and  of  each  of  the  connecting 
L*arriers,  to  receive  and  transport  the  property  accordingly. 

§  377.  The  advanced  rate  cases  of  1910. — in  June,  1910,  prior 
to  the  enactment  of  the  amendatory  statute  of  that  year  the  prin- 
cipal carriers  in  the  Western  Trunk  Line  Territory  through  their 
agents  acting  in  unison  prepared  and  filed  tariffs  increasing 
their  rates  upon  a  number  of  important  articles.  Before  these 
rates  had  gone  into  effect'  the  attorney  general  of  the  United 
States  caused  suit  to  be  brought  in  the  circuit  court  of  the  United 
States  in  the  eighth  circuit  at  Hannibal.  ]\Iissouri,  alleging  that 
such  increased  rates  were  the  result  of  a  combination  and  con- 
.spiracy  in  restraint  of  trade  and  in  violation  of  the  Sherman 
Anti-Trust  Act.  A  temporary  injunction  having  been  secured 
against  putting  these  rates  in  effect,  the  carriers  thereafter  agreed 
to  su.spcnd  the  effectiveness  of  the  rates  pending  a  determination 
of  their  reasonableness  by  the  Interstate  Commerce  Commission. 
This  agreement  was  made  in  view  of  the  bill  then  pending  in 
congress  vesting  in  the  commission  the  power  under  this  section 
15  to  suspend  advanced  rates.  AVhen  the  bill  became  law  the 
carriers  refiled  their  tariffs,  but  their  taking  effect  was  suspended 
by  the  commission  pending  the  investigation. 

Similar  advances  were  attempted  in  what  is  known  as  the 
official  classification  territory  including  the  territory  in  tlie 
northeastern  section  of  the  I'nited  States,  east  of  the  IMississippi 
River  and  north  of  the  Ohio  and  Potomac  Rivers.  These  carriers 
also  suspended  the  advances  pending  the  investigation  by  the 
commission. 

These  advances  were  sought  to  be  justified  in  both  these  cases 
on  the  ground  of  the  increased  cost  of  operation  and  the  very 
general  advance  in  wages.     In  both  eases  (20  I.  C.  C.  R.  243,  and 


478  THE   INTERSTATE    COMMERCE   LAW.  [SECTION   15 

20  I.  C.  C.  R.  307),  it  was  ruled  (Feb.  22,  1911),  that  the  burden 
being  upon  the.  carriers  to  establish  the  reasonableness  of  the 
advanced  rates,  that  they  had  failed  to  justify  such  increased 
rates.  It  was  ruled  also  that  the  provision  of  this  act  diifered 
from  the  English  act,  that  under  that  statute  the  railway  com- 
pany need  only  prove  that  the  increase  of  rate  was  unreasonable, 
while  under  the  act  to  regulate  commerce  the  carrier  is  called 
upon  to  prove  that  the  new  rate  as  a  Avhole  is  reasonable. 

In  both  cases  it  was  ruled,  that  before  any  general  advance  of 
rates  could  be  permitted  it  must  appear  with  reasonable  cer- 
tainty that  carriers  had  exercised  proper  economy  in  the  purchase 
of  their  supplies,  in  the  payment  of  their  wages  and  in  the  gen- 
eral conduct  of  their  business.  In  the  Official  Classification  Case 
it  was  ruled  that  class  rates  had  been  continuously  in  effect  for 
thirty  years  and  their  business  had  become  adjusted  to  them 
while  the  situation  was  somewhat  different  with  reference  to 
commodity  rates,  and  it  was  intimated  that  these  rates  might 
with  justice  be  revised  in  some  cases.  The  carriers  were  re- 
quested in  both  cases  to  withdraw  their  proposed  tariffs,  such 
action  being  Avithout  prejudice  to  the  carriers,  if  changed  condi- 
tions should  be  submitted  to  the  commission. 

§  378.  Jurisdiction  over  contracts  of  carriers. — While  the 
commission  has  no  general  common  law  or  equity  jurisdiction  and 
has  no  concern  with  the  contractual  relation  of  carriers  other 
than  with  shippers  and  relating  to  transportation,  it  is  especially 
authorized  under  this  section  as  amended  in  1906  to  determine 
the  just  and  reasonable  charge  or  allowance  for  services  rendered 
by  a  shipper  to  the  carrier.  This  power  was  doubtless  conferred 
to  prevent  the  concealment  of  rebates  or  other  discriminations  or 
preferences  to  favored  shippers  in  the  guise  for  payments  of 
services.  The  provision  was  strongly  recommended  by  the  com- 
mission in  its  annual  report  for  1905,  where  it  says  that  there 
was  no  doubt  that  the  payment  of  extravagant  sums  for  such 
services  was  resorted  to  for  the  purpose  and  with  the  effect  of 
preferring  one  shipper  to  another.  It  said  also  that  this  remedy 
will  not  be  altogether  adequate,  and  that  any  remedy  was  ex- 
tremely difficult  of  application,  but  that  nothing  better  appeared 
to  be  available. 

This  section  has  no  application  to  the  case  of  a  contract  made 


§    379]  THE   INTERSTATE   COMMERCE   LAW.  479 

by  a  carrier  with  a  third  party.  This  was  ruled  in  the  case,  17 
I.  C.  C.  R.  98,  where  eoniplaint  was  made  of  allowances  made 
to  a  warehouse  company  which  was  not  the  owner  of  the  cotton 
which  was  there  compressed  and  stored;  and  it  was  ruled  that 
the  mere  fact  that  the  owners  of  a  majority  of  the  stock  were 
also  shippers  of  freight  did  not  show  a  violation  of  the  act  and 
did  not  make  the  allowance  one  for  services  rendered  by  a  ship- 
per to  the  carrier  within  the  meaning  of  this  provision. 

This  provision  was  invoked  by  the  General  Electric  Company, 
14  I.  C.  C.  R.  238,  which  asked  the  commission  to  determine  and 
fix  the  just  and  reasonable  rates  for  the  services  which  it  rendered 
to  the  railroad  in  the  industrial  tracks  upon  its  plant  which  it 
owned  and  operated  and  wherewitli  it  hauled  the  loaded  and 
empty  cars  to  the  main  track.  The  commission  ruled  that  the 
complainant  did  nothing  within  its  plant  enclosure  which  it  could 
lawfully  call  upon  the  defendants  to  do  for  it,  and  therefore 
nothing  for  which  it  could  lawfully  demand  compensation.  It 
was  claimed  in  this  case  that  the  railroad  company  had  incurred 
contractual  obligation  by  its  course  of  conduct,  but  the  commis- 
sion said  it  had  no  power  under  the  law  either  to  enforce  the 
specific  performance  of  contracted  obligations  or  to  award  dam- 
ages for  the  breach  of  any  such  agreement. 

§  379.  Allowances  by  carriers  for  shippers'  services  must  not 
involve  undue  preference. — As  this  provision  of  the  statute  was 
enacted  for  the  purpose  of  preventing  concealment  of  rebates 
or  other  discriminations  or  preferences  the  commission  has  care- 
fully examined  such  allo.wances  when  brought  before  it  and  has 
insisted  that  no  such  allowances  can  be  recognized  in  favor  of 
one  shipper  when  a  similar  allowance  is  refused  to  another  ship- 
per competing  in  the  same  market  and  in  the  same  line  of  busi- 
ness who  offers  to  provide  a  similar  facility  and  perform  the  same 
service  in  the  transportation  of  his  property.  This  principle  was 
applied  in  the  Federal  Sugar  Refining  Company  Case,  involving 
an  alloM'ance  made  by  railroads  to  the  competitors  of  the  Refining 
Company  for  lightering  services  in  New  York  harbor.  This  case 
was  twice  before  the  commission,  17  I.  C.  C.  R.  40,  20  I.  C.  C.  R. 
200.  There  was  a  difference  of  opinion  as  to  the  application  of 
this  principle  to  the  facts  in  the  case;  but  on  the  second  hearing 
it  was  ruled  by  the  majority  that  the  allowance  paid  by  the  de- 


480  THE   INTERSTATE    COMMERCE   LAW.  [SECTION    1^ 

fendant  railroads  for  the  sugar  brought  by  Arbuckle  Brothers 
on  floats  and  lighters  to  the  regular  railroad  freight  stations  o-n 
the  Jersey  shore,  no  allowance  being  paid  to  complainant  on 
sugar  being  brought  by  it  on  lighters  to  the  same  station,  was  un- 
duly prejudicial  to  the  complainant.  Commissioners  Prouty  and 
Knapp  dissenting  said  that  the  disadvantage  under  which  com- 
plainant was  laboring  in  regard  to  its  lighterage  was  owing  to 
its  location  at  Yonkers  outside  of  the  lighterage  limit. 

There  is  no  undue  preference  however  when  a  carrier  makes 
with  one  independent  company  a  contract  more  favorable  than 
with  another  for  a  service,  which  that  carrier  is  bound  or  under- 
takes to  perform.  The  act  deals  only  with  the  obligation  of  car- 
riers as  carriers,  and  in  no  way  attempts  to  regulate  or  interfere 
with  other  matters  not  involving  their  duty  to  shippers  or  pas- 
sengers as  such.  The  principle  has  no  application  to  exclusive 
contracts  for  station  facilities  and  the  like.    See  §  287,  supra. 

§  380.  The  powers  of  the  commission  construed. — It  was  said 
by  the  commission  prior  to  the  amendment  of  1910  (17  I.  C.  C. 
R.  369) ,  that  this  section  in  their  judgment  was  the  determinating 
and  controlling  expression  of  the  real  object  and  meaning  of  the 
act  in  its  present  form ;  and  by  the  supreme  court  in  the  Pitcairn 
Coal  Case,  supra,  after  the  amendment  of  1906,  but  before  that 
of  1910  that  ''the  commission  is  empowered"  indeed  it  has  made 
its  duty  in  disposing  of  a  complaint,  not  only  to  determine  the  le- 
gality of  the  practice  alleged  to  give  rise  to  unjust  preference  or 
undue  discrimination,  and  to  forbid  the  same,  but  moreover  to  di- 
rect the  practice  to  be  followed  as  to  such  subject  for  a  future 
period,  not  exceeding  two  years,  with  a  power  in  the  commission 
if  it  finds  reason  so  to  do,  to  suspend,  modify  or  set  aside  the  same, 
the  order  being  operative  without  judicial  action. 

The  powers  of  the  commission  have  been  sustained  in  lowering 
the  through  rates  between  the  Atlantic  seaboard  and  Missouri 
river  though  such  lowering  involved  the  changing  of  the  basing 
points  theretofore  adopted  by  the  carriers  (see  supra,  §  238). 

In  enforcing  an  equitable  distribution  of  the  supply  of  coal 
ears,  when  there  was  a  shortage  of  cars  available  for  the  busi- 
ness of  the  shippers.  See  United  States  ex  rel.  v.  B.  &  0.  R.  Co., 
215  U.  S.  481,  54  L.  Ed.  292  (1910). 

In  ordering  the  discontinuance  of  a  discrimination  in  the 
grant  of  a  milling  in  transit  privilege,  siipra,  §  234. 


§    380]  THE   INTERSTATE   COMMERCE   LAW.  481 

In  directing  a  carrier  to  desist  from  further  charging  the 
freight  rate  under  certain  classification,  which  produced  prefer- 
ences and  discriminations.  See  Cincinnati,  H.  &  D.  F.  Co.  Case. 
supra,  §  275. 

In  directing  a  railroad  to  discontinue  undue  preferences  and 
advantage  to  a  party  under  a  lease  of  the  wharves  of  a  terminal 
company  at  Galveston.    Southern  Pac.  Lum.  Co.  v.  Commis.sion. 
supra,  §  248. 
31 


482  THE   INTERSTATE    COMMERCE   LAW.  [SECTION    16 


Section  16. 

§  381.  Section  IG.     Enforcement  of  orders. 

382.  The  amendments  of.  1906  and  1910. 

383.  The  saving  of  the  right  of  trial  by  jury, 

384.  The  time  limitations  of  actions  for  reparation. 

385.  Commission  must  find  reasonable  rate  before  ordering  repara- 

tion. 

386.  Jurisdiction  of  commission  in   awarding  reparation. 

387.  The  jurisdiction  of  the  commission  in  awarding  general  dam- 

ages. 

388.  Jurisdiction  of  federal  and  st:  te  courts  in  reparation  actions. 

389.  Prima  facie  effect  of  commission's  orders  in  reparation. 

390.  The  procedure  in  actions  in  court. 

391.  The  judicial  review  of  the  commission's  orders. 

392.  The  jurisdiction  of  the  circuit  courts. 

393.  The  right  of  appeal  under  amended  act. 

394.  Jurisdiction  of  the  courts  to  review  the  orders  of  the  commis- 

sion. 

395.  The  commerce  court  on  parties  entitled  to  appeal  from  commis- 

sion's orders. 

396.  The  finality  of  the  order  of  the  commission. 

§  381.  Section  16.  Enforcement  of  orders. — Sec.  16.  (Amended 
March  2,  1899.  June  29,  1906,  and  June  18,  1910.)     That  if  after 

[ATvard  of  damages  by  conimis.sioii.] 

hearing  on  a  complaint  made  as  provided  in  section  thirteen  of 
this  Act,  the  Commission  shall  determine  that  any  party  com- 
plainant is  entitled  to  an  award  of  damages  under  the  provisions 
of  this  Act  for  a  violation  thereof,  the  Commission  shall  make 
an  order  directing  the  carrier  to  pay  to  the  complainant  the 
sum  to  which  he  is  entitled  on  or  before  a  day  named. 

[Petition  to  United  State.s  court  in  case  carrier  does  not 
comply  with  order  for  payment  of  money.] 

If  a  carrier  does  not  comply  with  an  order  for  the  pay- 
ment of  money  within  the  time  limit  in  such  order,  the  com- 
plainant, or  any  person  for  whose  benefit  such  order  was  made, 
may  file  in  the  circuit  court  of  the  United  States  for  the  district 
in  which  he  resides  or  in  which  is  located  the  principal  operating 
office  of  the  carrier,  or  through  which  the  road  of  the  carrier 
runs,  or  in  any  state  court  of  general  jurisdiction  having  juris- 
diction o£  the  parties,  a  petition  setting  forth  briefly  the  causes 
for  which  he  claims  damages,  and  the  order  of  the  Commission  in 

[Findinf^s    of    fact    of    commission    sliall    be    prima    facie 
evidence  in  reparation  cases.] 

the   premises.     Such   suit  in  the   circuit   court  of  the  United 
States  shall  proceed  in  all  respects  like  other  civil  suits  for  dam- 


§    ySl]  THE    INTERSTATE    COMMERCE    LAW,  '  483 

ages,  except  that  on  llie  ti-ial  of  sueh  suit  tlie  findings  and  order 
of  the  <V)nmiission  sliall  be  prima  facie  evidence  of  the  facts 

Il'eUtloucr   not   liuble   for  comIm   In   circuit  court.] 

therein  stated,  and  except  tliat  the  petitioner  siiall  not  be  liable 
for  costs  in  the  circuit  court  nor  for  costs  at  any  snbseciwent  stage 
of  tlie  proceed inos  unless  they  accrue  upon  h'is  appeal.     If  the 

[rotitloncr'H   nttorney'M   fecM.] 

petitioiici-  shall  linally  pi-cvail  he  sliall  be  allowed  a  reasonable 
attorney  's  fee.  to  be  taxed  and  collected  as  a  part  of  the  costs 
of  the  suit.  All  comj^laints  for  the  recovery  of  damages  shall 
be  filed  with  the  Commission  within  two  years  from  the  "time  the 

[lilmttation  upon  action.] 

cause  of  action  accrues,  and  not  after,  and  a  petition  for  the  en- 
forcement of  an  order  for  the  payment  of  money  sliall  be  tiled 
in  the  circuit  coui-t  or  state  court  within  one  year  from  the  date 
of  the  order,  and  not  alter. 

[Joint   pliihiUII'M    may   sue   joint    defendants    in    euurls   on 
MtvurdN   of  ditnia;ieN.] 

In  such  suits  all  pai-ties  in  whose  favor  the  Commission  may 
have  made  an  award  for  damages  by  a  single  order  may  be  joined 
as  plaintilt's,  and  all  of  the  carriers  parties  to  such  order  award- 
ing such  damages  may  be  joined  as  defendants,  and  such  suit 
may  be  maintained  by  sueh  joint  plaintiffs  and  against  such  ioint 
defendants  in  any  district  where  any  one  of  such  joint  plaiutitfs 

[Service   of  itroce.ss.] 

could  maintain  such  suit  against  any  one  of  such  joint  defend- 
ants ;  and  service  of  process  against  any  one  of  such  defendants 
as  may  not  be  found  in  the  district  where  the  suit  is  brought 
may  be  made  in  any  district  where  such  defendant  carrier  has 
its  principal  operating  office.  In  case  of  such  joint  suit  the  re- 
covery, if  any,  may  be  by  judgment  in  favor  of  any  one  of  such 
plaintiffs  against  the  defendant  found  to  be  liable  to  such  plain- 
tiff. ^ 

[Ser\-ice  of  order  of  commi.sslon.] 

Every  order  of  the  Commission  shall  be  forthwith  served  upon 
the  designated  agent  of  the  carrier  in  the  city  of  AVashington 
or  in  such  otiier  manner  as  may  be  provided  by  law. 

[Commission   may  su.sitend  or  modify  order.] 

The  Commission  shall  be  authoi-iwd  to  suspend  or  modifv  its 
orders  upon  such  notice  and  in  such  manner  as  it  shall  deem 
proper. 

[Carriers,  their  nKciits  and   enii»I«>yes,   must   comply  ivlth 
such  orders.] 

It  shall  be  the  duty  of  every  common  carrier,  its  agents  and 
employes,  to  observe  and  comply  with  such  orders  so  long  as  the 
same  shall  remain  in  effect. 

Any  carrier,  any  ot^cer,  representative,  or  agent  of  a  carrier, 
or  any  receiver,  trustee,  lessee,  or  agent  of  either  of  them,  who 


484  THE   INTERSTATE    COMMERCE   LAW.  [SECTION    16 

[Piini.shnient   by   forfeiture   for   refusal   to   obey  order  of 
eoniuiission  under  section  15.] 

knowingly  fails  or  neglects  to  obey  any  order  made  under  the 
provisions  of  section  fifteen  of  this  Act  shall  forfeit  to  the  United 
States  the  sum  of  five  thousand  dollars  for  each  offense.  Every 
distinct  violation  shall  be  a  separate  offense  and  in  case  of  a  con- 
tinuing violation  each  day  shall  be  deemed  a  separate  offense. 

[Forfeiture    payable    into    treasury    and    recoverable    in 
civil  suit.] 

The  forfeiture  provided  for  in  this  Act  shall  be  payable  into 
the  Treasury  of  the  United  States,  and  shall  be  recoverable  in  a 
civil  suit  in  the  name  of  the  United  States,  brought  in  the  district 
where  the  carrier  has  its  principal  operating  office,  or  in  any 
district  through  which  the  road  of  the  carrier  runs. 

[Duty  of  district  attorneys  to  prosecute.] 

It  shall  be  the  duty  of  the  various  district  attorneys,  under 
the  direction  of  the  Attorney-General  of  the  United  States,  to 
prosecute  for  the  recovery  of  forfeitures.    The  costs  and  expenses 

[Costs  and  expenses  to  be  paid  out  of  appropriation  for 
court   expenses.] 

of  such  prosecution  shall  be  paid  out  of  the  appropriation  for  the 
expenses  of  the  courts  of  the  United  States. 

[Commission  may  employ  attorneys.] 

The  Commission  may  employ  such  attorneys  as  it  finds  neces- 
sary for  proper  legal  aid  and  service  of  the  Commission  or  its 
members  in  the  conduct  of  their  work  or  for  proper  representa- 
tion of  the  public  interests  in  investigations  made  by  it  or  cases 
or  proceedings  pending  before  it,  whether  at  the  Commission's 
own  instance  or  upon  complaint,  or  to  appear  for  and  represent 
the  Commission  in  any  case  pending  in  the  commerce  court ;  and 
the  expenses  of  such  employment  shall  be  paid  out  of  the  ap- 
propriation for  the  Commission. 

[Petition   to   commerce  court   in   ca.scs   of  disobedience  to 
order  of  commission  otlier  than  for  ijaymcnt  of  money.] 

If  any  carrier  fails  or  neglects  to  obey  any  order  of  the  Com- 
mission other  than  for  the  payment  of  money,  while  the  same  is 
in  effect,  the  Interstate  Commerce  Commission  or  any  party  in- 
jured thereby,  or  the  United  States,  by  its  Attorney-General,  may 
apply  to  the  Commerce  Court  for  the  enforcement  of  such  order. 
If,  after  hearing,  that  Court  determines  that  the  order  was  regu- 
larly made  and  duly  served,  and  that  the  carrier  is  in  disobedi- 

[Commerce  court   must   enforce   disobeyed   order  if  regu- 
larly  made  and   duly  served.] 

ence  of  the  same,  the  Court  sliall  enforce  obedience  to  such  order 
by  a  writ  of  injunction  or  other  proper  process,  mandatory  oi* 
otherwise,  to  restrain  such  carrier,  its  officers,  agents,  or  repre- 
sentatives, from  further  disobedience  of  such  order,  or  to  enjoin 
upon  it  or  them  obedience  to  the  same. 

The  copies  of  schedules  and  classifications  and  tariffs  of  rates. 


§    382]  THE   INTERSTATE    COMMKRCK    LAW.  485 

[Rnto  KCliodiili'N,  coiitrnotH,  or  nur«'«Mii<'nt.H,  niiil  onrrhTN* 
nnniiiil  i-fporls  iil<-il  with  (•oiiiiiiiNNitiii  »ii<l  In  <-iiMt<><l.r 
of  s«MTi-(Jirj  are  iMiltlU-  record.s,  r«-<-rl\  aide  In  conrlH 
anti  l»y  (lie  ooinniiNMion  n«  prlnin  fac-le  «'vl«|en<-e.  Cer- 
|ille«l  eopW'M  or  oxtraotM  (lierel'roni  uImo  prlinu  facie 
I'vliU'iife.l 

faros,  and  eluiru'cs,  aiivl  of  all  contracts,  aprrcements.  and  arrange- 
ments betwoon  common  carriers  filed  with  the  Commission  as 
herein  provided  and  the  statistics,  tables,  and  figures  contained 
in  the  annual  or  other  reports  of  carriers  made  to  the  Commis- 
sion as  required  under  the  provisions  of  this  Act  shall  be  pre- 
served as  public  records  in  the  custody  of  the  secretary  of  the 
Commission,  and  shall  be  received  as  prima  facie  evidence  of 
what  they  purport  to  be  for  the  purpose  of  investigations  by  the 
Commission  and  in  all  judicial  proceedings;  and  copies  of  and 
extracts  from  any  of  said  schedules,  classifications,  tarill's.  con- 
tracts, agreements,  arrangements,  or  reports,  made -public  records 
as  aforesaid,  cei'tified  by  the  secretary,  under  the  Commission's 
seal,  shall  be  received  in  evidence  with  like  effect  as  the  originals. 

§  382.  The  amendments  of  1906  and  1910.— This  section  was 
also  in  effect  re-written  in  the  amendatory  act  of  1906  and  sub- 
stituted for  the  original  section,  this  being  necessitated  by  the' 
radical  changes  in  the  powers  conferred  upon  the  commission  in 
the  preceding  section.  The  original  section  provided  for  the 
enforcement  of  the  orders  of  the  commission  by  the  courts  on  the 
petition  of  the  commission,  the  findings  of  fact  by  the  commis- 
sion being  prima  facie  evidence  of  the  matters  therein  stated,  and 
under  the  amendment  of  1889.  the  saving  of  the  right  of  trial  by 
the  jury  under  the  seventh  amendment  of  the  constitution. 

The  amendments  of  1906  provided  for  the  filing  of  reparation 
complaints,  for  a  limitation  of  time  in  bringing  actions,  for  the 
service  of  the  order  of  the  commission  by  mailing,  with  penalties 
upon  the  carriers  for  non-observance  of  the  orders,  the  employ- 
ment of  special  counsel,  the  enforcement  of  orders  for  reparation, 
the  venue  of  suits  against  the  commission  the  application  of  the 
provisions  of  the  expediting  act,  the  regulation  of  the  procedure 
and  the  granting  of  interlocutory  orders  in  suits  against  the 
commission,  and  for  appeals  to  the  supreme  court  from  final  as 
well  as  interlocutory  orders  in  such  suits,  and  for  the  use  of 
schedules,  tariffs  and  tables  as  evidence. 

The  act  of  1910  provided  for  the  institution  of  suits  for  repara- 
tion in  state  courts,  for  service  upon  the  agent  of  the  carrier  at 
Washington  in  lieu  of  the  service  by  registered  mail,  for  the  em- 


4S6  THE   INTERSTATE    COMMERCE   LAW.  [SECTION   16 

emploj'ment  of  official  attorneys  by  the  commission,  whereas  in 
the  act  of  1906  it  was  with  the  consent  of  the  attorney-general 
that  special  counsel  was  employed. 

The  provisions  of  the  act  of  1906  as  to  suits  against  the  com- 
mission were  omitted  in  view  of  the  creation  of  the  commerce 
court  under  the  same  act. 

§  383.  The  saving  of  the  right  of  trial  by  jury. — The  seventh 
amendment  of  the  constitution  provides  that  in  suits  at  common 
law,  where  the  value  in  controversy  shall  exceed  twenty  dollars, 
the  right  of  trial  by  jury  shall  be  preserved,  and  no  fact  tried 
by  a  juiy  shall  be  otherwise  examined  in  the  courts  of  the  United 
States  than  according  to  the  rules  of  the  common  law.  The 
amendment  of  1889  of  the  original  act  was  made  in  view  of  the 
express  requirement  in  section  14  of  the  original  act,  that  the 
commission  should  make  recommendation  as  to  what  reparation, 
if  any,  should  be  made  by  the  carriers  as  to  any  party  or  parties 
who  may  have  been  found  to  have  been  injured. 

As  to  the  application  of  the  original  act,  that  is,  prior  to  the 
amendment  of  1906,  in  actions  of  reparation,  see  Interstate  Com- 
merce Commission  v.  R.  R.  Co.,  82  Fed.  192,  W.  D.  of  Penn- 
sylvania (1897),  wherein  the  court  ruled  that  each  shipper  had 
a  right  to  reparation  and  damages  as  a  separate  legal  controversy 
which  would  entitle  him  to  a  trial  by  jury  when  in  excess  of 
twenty  dollars.  In  the  Texas  Cattle  Raisers  Case,  10  I.  C.  C.  R. 
83  (1904),  this  question  was  considered  by  the  commission,  and 
it  was  said  that  it  had  been  the  practice  of  the  commission  to 
order  reparation  in  behalf  of  the  members  of  complaining  asso- 
ciations ;  but  it  was  suggested  as  the  law  was  unsettled  that  the 
members  of  the  association  should  file  separate  intervening 
claims. 

Under  the  act  as  amended  suits  for  reparation,  wherein  orders 
for  the  payment  of  money  are  made,  are  brought  in  the  circuit 
court  of  the  United  States  or  in  any  state  court  having  jurisdic- 
tion of  the  parties;  and  such  a  suit  in  the  circuit  court  of  the 
United  States  proceeds  in  all  respects  like  other  civil  suits  for 
damages,  except  that  on  the  trial  of  such  suit  the  finding  and 
order  of  the  commission  shall  be  prima  facie  evidence  of  the  facts 
therein  stated;  and  the  petitioner  is  not  liable  for  costs  in  the 
circuit  court  nor  subsequently  except  upon  his  own  appeal ;  and 


§    385]  THE   INTERSTATE    COMMr.RCE   LAW.  487 

if  he  prevail,  is  allowed  a  reasonaljle  attorney's  fee.  The  right 
of  trial  by  jury  is  thus  preserved. 

"While  the  statute  provides  for  the  joining  as  plaintiffs  of  all 
parties  in  whose  favor  the  commission  may  have  made  the  award 
for  damages  by  a  single  ord-^r,  it  would  seem  that  the  constitu- 
tional right  of  trial  by  jury  where  the  demand  exceeds  twenty 
dollars,  Avould  require  a  separate  trial  for  each  separate  claim- 
ant if  he  demanded,  and  that  the  procedure  would  have  to  be 
adapted  thereto. 

Under  the  new  judicial  code,  wherever  reference  is  made  to 
the  circuit  court  of  the  United  States  in  this  section  as  a  trial 
court,  the  reference  will  be  deemed  and  held  to  confer  the  power 
and  impose  the  duty  ui)on  the  district  court  after  the  code  takes 
effect  on  January  1st,  1912, 

§  384.  The  time  limitation  of  actions  for  reparation. — There 
was  no  provision  in  the  Interstate  Conimeree  Act  before  the 
amendment  of  1906,  prescribing  a  limitation  of  time  within 
which  actions  in  court  or  proceedings  before  the  commission 
should  be  commenced.  The  discussions  therefore  prior  to  this 
time  of  this  question  of  limitation,  whether  in  the  commission  or 
the  court,  have  now  only  an  historical  interest.  Under  the  sec- 
tion as  amended  complaints  for  recovery  of  damages  must  be 
filed  with  the  commission  within  two  years  after  the  cause  of 
action  accrues,  and  not  after,  and  suit  thereon  must  be  filed  in 
the  circuit  court  or  state  court  within  one  year  of  the  date  of  the 
order  of  the  commission  and  not  later.  This  limitation  was  ap- 
plied by  the  commission  in  its  ruling  in  19  I.  C.  C.  K.  592,  where 
the  complaint  included  shipments  covering  an  extended  period  of 
time,  and  said  that  it  would  only  consider  such  shipments  as 
moved  within  two  years  prior  to  the  time  the  complaint  embrac- 
ing them  was  filed,  and  that  with  respect  to  shipments  moAdng 
prior  to  such  two  year  period  the  commission  believed  that  they 
were  without  jurisdiction  and  therefore,  made  no  finding  what- 
ever. 

§  385.  Commission  must  find  reasonable  rate  before  ordering 
reparation. — It  was  held  by  the  circuit  court  of  appeals,  eighth 
circuit,  iu  Denver  R.  G.  R.  Co.  v.  Baer  Bros.  ^Mercantile  Co..  187 
Fed.  485  (May,  1911),  that  iu  a  proceeding  before  the  Inter- 


488  THE   INTERSTATE    COMMERCE   LAW.  [SECTION    IG 

state  Commerce  Comnussion  to  recover  damages  on  a  complaint 
by  a  shipper  that  the  amount  collected  by  the  carrier  at  a  lawful 
established  rate  has  been  excessive  because  ,that  rate  was  unrea- 
sonable, the  finding  and  prescription  by  the  commission  of  a  rea- 
sonable maximum  rate  to  be  observed  by  all  and  an  order  by  the 
commission  prohibiting  the  use  of  a  rate  in  excess  thereof,  as 
provided  in  section  15,  were  conditions  precedent  to  the  exercise 
of  the  power  under  section  16  to  order  reparation.  The  court 
said  that  an  order  of  reparation  without  such  an  establishment 
of  a  reasonable  maximum  rate  was  beyond  the  power  of  the  com- 
mission and  void,  and  as  no  rate  was  prescribed  and  no  rate  for- 
bidding the  future  use  of  an  excessive  rate  was  made  in  the  case, 
the  commission's  order  of  reparation  was  beyond  its  power  and 
void.  The  court  therefore  reversed  the  judgment  rendered  in 
the  circuit  court  without  considering  the  other  questions  raised 
in  the  case. 

§  386.  The  jurisdiction  of  the  commission  in  awarding  re- 
paration.— The  commission  has  ruled  that  its  award  of  repara- 
tion is  simply  a  recommendation  which  can  only  be  enforced  by  a 
suit  at  law  affording  full  opportunity  for  a  jury  trial,  and  that 
upon  this  theory  the  act  giving  them  this  authority  is  valid  and 
constitutional.  10  I.  C.  C.  R.  83.  Reparation,  the  commission  has 
said,  should  not  be  awarded  in  any  informal  proceedings  which 
would  not  be  awarded  under  the  same  state  of  facts  in  a  contested 
case  and  in  the  face  of  defendant's  protestation  instead  of  its 
admission.  The  commission,  therefore,  could  not  accept  as  con- 
clusive any  stipulation  of  parties  as  to  the  reasonableness  of  a 
rate  or  transportation  regulation.  16  I.  C.  C.  R.  426.  The  right 
to  reparation  is  not  confined  to  shipments  made  by  parties  to  any 
given  proceeding,  but  extends  to  all  shipments  moving  under  the 
same  circumstances  and  conditions  and  charged  for  on  the  basis 
found  to  be  unlawful  by  whomsoever  made.    17  I.  C.  C.  R.  253. 

It  was  ruled  by  the  commission,  in  17  I.  C.  C.  R.  90,  that  where 
a  transportation  service  has  been  rendered  for  which  no  tariff 
authority  exists,  and  where  the  shipper  has  paid  the  sum  claimed 
by  the  carrier  for  that  service,  the  commission  has  jurisdiction 
to  inquire  what  was  the  reasonable  charge  for  that  service. 

In  this  case  the  extra  service  was  for  ice  and  refrigeration. 
(Commissioner  Cockrell  dissented  on  the  ground  that  the  com- 


§    387J  TlIK    INTERSTATE    COMMERCE   LAW.  489 

mission  had  no  power  under  the  act  to  inqiiire  into  the  value  of 
service  rendered  by  tlie  carrier  indei)eudently  of  a  rate  lawfully 
fixed  by  the  carrier  for  such  service.) 

On  the  general  question  of  the  jurisdiction  of  the  commission 
to  award  reparation  it  was  said  by  the  supreme  court,  in  the 
Abilene  Cotton  Oil  Case,  supra. 

"Although  an  established  schedule  of  rates  may  have  been 
altered  by  a  carrier  voluntarily  or  as  the  result  of  an  enforce- 
ment of  the  order  of  the  commission  to  desist  from  violating  the 
law  rendered  in  accordance  with  the  provisions  of  the  statute, 
it  may  not  be  doubted  that  the  power  of  the  commission  would 
nevertheless  extend  to  hearing  legal  complaints  of  and  awarding 
reparation  to  individuals  for  wrongs  unlawfully  suffered  from 
the  application  of  the  unreasona])le  schedule  during  the  period 
when  such  schedule  was  in  force."  See  also  15  I.  C.  C.  R.  p 
334. 

In  15  I.  C.  C.  R.  147,  decided  in  1909,  the  commission  said  that 
in  passing  upon  the  reasonableness  or  unreasonableness  of  a  rate 
it  acted  as  an  administrative  body  having  quasi  judicial  func- 
tions; when  it  determines  what  the  rate  should  have  been  and 
shall  be  in  the  future  it  exercises  certain  legislative  functions. 
When  it  computes  the  damages  or  reparation  due  the  shipper  by 
reason  of  the  enforcement  and  collection  of  a  rate  unreasonable 
to  the  extent  that  it  exceeds  a  rate  which  is  declared  to  be  rea- 
sonable, there  is  a  matliematical  determination  of  the  dauiages  of 
the  shipper  should  receive,  and  that  elements  of  conjecture, 
speculation  and  inference  are  entirely  eliminated.  It  said 
further  that  the  commission  did  not  assess  costs  or  allow  at- 
torneys' fees,  nor  did  its  order  for  the  payment  of  monej'  have 
the  effect  of  a  judgment  of  the  court.  Such  orders  were  not  en- 
forcible  by  process  nor  did  they  become  liens  upon  the  property 
of  the  defendant. 

§  387.  Jurisdiction  of  the  commission  in  awarding  general 
damages. — "While  the  commission  has  uniformly  awarded  dam- 
ages in  reparation,  where  the  subject  matter  of  the  complaint 
was  an  unreasonable  rate  and  the  award  was  merely  a  matter  of 
calculation  there  has  been  a  difference  of  opinion  in  the  commis- 
sion as  to  its  jurisdiction  or  its  duty  to  award  damages  in  de- 
mands for  reparation  other  than  those  which  could  be  ascertained 


490  THE   INTERSTATE    COMMERCE   LAW.  [SECTION    1(3 

by  mere  calculation  of  differences  in  rates.  The  question  has  been 
presented  in  two  classes  of  cases:  first,  where  an  individual 
claimant  suffered  loss  in  business  through  delays  in  consequence 
of  defaults  of  tlie  carrier  which  are  in  contravention  of  some 
provision  of  the  act.  and  second,  where  the  complainant  is  one  of 
a  class  of  shippers,  who  are  damaged  by  some  rule  or  regulation 
declared  discriminatory  by  the  commission.  In  a  case  of  the 
first  class,  17  I.  C.  C.  R.  361,  the  majority  of  the  commission  de- 
clined to  take  jurisdiction  saying  that  the  award  of  such  result- 
ing damages,  loss  of  trade  and  the  like  should  be  determined  by 
action  brought  in  a  court  of  competent  jurisdiction.  It  was  con- 
ceded that  the  language  of  the  act  was  of  doubtful  interpreta- 
tion, and  therefore  the  commission,  being  a  special  tribunal  of 
limited  powders,  -should  resolve  the  doubt  in  favor  of  courts 
where  claims  of  this  nature  ordinarily  belong.  The  minority 
opinion,  in  which  three  commissioners  concurred,  was  that  the 
decision  of  the  majority  was  a  surrender  of  jurisdiction  clearly 
conferred  and  theretofore  exercised  Avithout  (luestion. 

The  ruling  in  this  case  was  considered  by  the  circuit  court  of 
appeals,  third  circuit,  in  the  Morrisdale  Coal  Case,  supra,  §  331, 
which  involved  a  claim  for  damages  on  account  of  a 
prejudicial  distribution  of  coal  cars,  wherein  the  court  declined 
jurisdiction  on  account  of  the  ruling  of  the  supreme  court  in  the 
Abilene  Coal  Case,  as  the  rule  claimed  to  be  discriminatory  had 
not  been  passed  upon  by  the  commission ;  and  the  court  intimated 
that  the  letter  of  the  statute  seemed  to  confer  upon  the  commis- 
sion the  power  to  assess  damages  in  every  case  of  discriminatory 
practices.  Its  procedure,  said  the  court,  in  making  the  assess- 
ment, constitutes  no  part  of  judicial  procedure.  In  a  court  of  law 
its  findings  and  order  are  but  prima  facie  evidence  of  the  dam- 
ages sustained. 

In  a  later  case  the  subject  came  again  before  the  commission  in 
the  other  class  of  cases  involving  claims  for  damages  on  account 
of  the  discriminating  rule  of  distributing  coal  cars  in  time  of 
shortage  by  the  Pennsylvania  Railroad,  which  was  found  by  the 
commission  to  be  illegal  and  discriminatory  as  against  a  class  of 
shippers.'  These  were  the  same  coal  car  distribution  rules  that 
were  involved  in  the  litigation  in  the  Morrisdale  Coal  Company 
Case,  wherein  the  circuit  court  and  the  circuit  court  of  appeals 
declined  to  take  jurisdiction.     The  majority  of  the  commission, 


§    388]  TIIK    INTERSTATE    COMMKUCK    LAW.  191 

19  I.  C.  C.  R.  35G,  were  still  of  tlie  oi)iiii(»n  tlint  it  w.is  not  i'or 
tliera  under  the  law  to  assess  and  determine  the  daniai^es  sus- 
tained by  the  complainant,  and  that  it  was  a  judicial  f[uestion 
for  the  courts,  and  at  the  most  any  finding  by  tlie  commission  as 
to  tlie  amount  of  daniiirres  would  be  tlie  expression  of  an  opinion 
that  could  not  be  enforced  1-y  th(!  commission,  and  tlici-ctoie  in 
any  event  resort  must  be  had  by  tlie  complainant  to  the  courts. 

Commissioner  Prouly.  in  a  dissenting  opinion,  considered  that 
there  was  a  clear  distinction  between  the  former  ease  (17  I.  C.  C. 
R.  3G1),  which  he  said  was  a  case  of  individual  wrong,  which 
could  be  redressed  in  court  consistently  with  the  position  declared 
in  the  Abilene  Case,  and  this  case,  wherein  discrimination  inhered 
not  against  a  particular  shipper,  but  under  a  rule  applicable  to 
all  shippers  and  therefore  peculiarly  within  the  jurisdiction  of 
the  commission. 

The  commission  concluded  in  view  of  this  position  of  the  courts 
(at  this  time  the  opinion  of  iMci^herson,  J.,  in  the  circuit  court. 
176  Fed.  748  [1910],  was  before  the  commission  but  the  opinion 
of  the  circuit  court  of  appeals  had  not  then  been  reported)  to 
order  a  further  argument  with  respect  to  the  amount  of  damages 
suffered  by  the  eomplainjint  in  the  proceedings  as  the  result  of 
the  discriminations  that  were  found  to  exist.  For  discussion  of 
the  jurisdiction  of  the  courts  in  such  cases,  see  supra,  §  331. 

The  jurisdiction  of  the  commission  in  awarding  reparation 
seems  to  extend  under  the  act  to  all  cases  where  parties  are  preju- 
diced by  any  rate  or  regulation  of  the  carrier  which  is  declared 
by  the  commission  unreasonable  or  prejudicial.  There  seems  to 
be  no  basis  for  distinction  in  the  ascertainment  of  damages — if 
they  are  proximate  so  as  to  be  cognizable  in  law,  and  not  conse- 
quential, that  it,  speculative — because  they  require  weighing  of 
evidence,  and  are  not  determined  by  merely  a  calculation  of  the 
figures  of  rates.  In  any  case  the  award  of  the  commission  is 
only  advisory  and  must  be  confirmed  by  the  court. 

§  388.  Jurisdiction  of  federal  and  state  courts  in  reparation 
actions. — Under  the  section  as  amended  in  1010  the  complainant 
in  a  reparation  case,  or  any  person  for  wjiose  benefit  the  order  is 
made,  may  bring  the  suit  for  the  damages  awarded  by  the  com- 
mission in  "any  State  Court  of  general  jurisdiction  having  juris- 
diction of  the  parties."    The  section  specifically  provides  for  the 


492  THE   INTERSTATE    COMMERCE   LAW.  [SECTION   16 

procedure  in  the  suit,  if  bi-oiight  in  the  circuit  court  of  the  United 
States,  that  is,  that  it  should  proceed  like  other  civil  suits  for 
damages;  that  the  finding  and  order  of  the  commission  shall  be 
prima  facie  evidence  of  facts  and  further  provides  as  to  liability 
for  costs,  taxation  of  attorney's  fee,  and  the  joinder  of  parties 
both  as  plaintiffs  and  defendants.  The  limitation  provision  re- 
quires that  the  suit  must  be  filed  in  the  circuit  court  or  state  court 
within  one  year  from  the  date  of  the  order.  Such  a  suit,  if 
brought  in  the  state  court,  would  necessarily  be  controlled  in  its 
procedure  by  the  law  of  the  forum.  Whether  a  state  court  would 
be  bound  to  assume  jurisdiction  of  a  cause  of  action  created  by 
federal  statute,  see  supra,  §  48,  on  Federal  Actions  in  State 
Courts,  also  Hoxsie  v.  N.  Y.,  N.  H.  &  II.  R.  Co.,  82  Conn.  352. 
In  the  suits  in  the  circuit  courts  of  the  United  States  for  the 
recovery  of  reparation  damages  there  is  no  exception  to  the  gen- 
eral provision  of  the  judiciary  act  requiring  $2,000*  as  a  mini- 
mum amount  in  controversy.  The  suit  if  brought  in  the  circuit 
court  of  the  United  States  proceeds  in  all  respects  like  other  civil 
suits  for  damages  in  that  court  subject  to  the  provision  of  the 
section.  The  provision  in  tlie  section  for  the  joining  of  parties 
as  plaintiffs  who  may  be  awarded  damages  by  a  single  order  of 
the  commission  may  have  been  inserted  on  account  of  this  juris- 
dictional amount  in  controversy  required  by  the  judiciary  act, 
and  in  case  of  such  joinder  it  would  seem  that  the  aggregate  of 
the  claims  thus  authorized  to  be  included  in  the  action  would  be 
the  amount  in  controversy.  In  suits  for  reparation  the  action 
may  be  brought  by  the  party  making  the  complaint,  or  by  the 
party  for  whose  benefit  the  order  is  made. 

§  389.  The  prima  facie  effect  of  the  commission's  orders. — 

The  complaints  for  reparation  are  now  the  only  cases  wherein 
the  commission  is  required  under  section  14  to  report  its  findings 
of  fact,  and  where  their  report  with  the  findings  of  fact  is  made 
prima  facie  evidence.  The  subject  of  the  prima  facie  effect  of 
the  findings  of  fact  by  the  commission  was  considered  by  the  cir- 
cuit court  of  appeals  of  the  third  circuit  in  a  reparation  case, 
W.  N.  Y.  &  P.  R.  Co.  V.  Penn.  Refining  Co..  187  Fed.  343, 
in  1905.  under  the  act  before  its  amendments.    The  court,  while 


*  $3,000.00  is  the  jurisdictional  limit  under  the  new  Judicial  Code 
which  takes  effect  January  1,  1912. 


§    ;j9Uj  Tin:    INTEKSTATE    COMMERCE    LAW.  493 

sustiiiiiiiig  tlio  cojistilulionality  of  the  provision  as  witliin  i\vi 
power  of  congress  in  regulating  the  rules  of  evidence,  lield  that 
it  was  only  tlie  findings  of  fact  wliicli  the  law  made  pi-iiiia  facie 
evidence,  aiul  that  the  opinions  and  arguments  and  ivguiations 
of  the  commission  were  not  made  prima  facie  evidence,  or  evi- 
dence of  any  kind  in  an}-  judicial  pi'oceedings.  The  findings  of 
fact  nnist  th.crefoi-e  be  olTcred  in  evidence,  unaccompanied  with 
extraneous  matter  calculated  to  confuse  or  mislead.  The  causes 
of  action  in  the  case  of  reparation  must  be  included  in  an  order 
of  reparation  made  by  the  commission.  It  was  lield  in  this  case 
also  that  the  receivers  of  a  railroad  who  had  been  finally 
discharged  before  tlie  making  of  the  order  of  reparation,  were 
not  lial)le. 

§  390.  The  procedure  in  actions  in  court. — Before  the  amend- 
ment of  11)0()  the  aid  of  the  courts  was  necessary  to  enforce  tic.' 
orders  of  the  commission  other  than  for  the  payment  of  money 
After  that  amendment  the  orders  of  the  conunission  were  directly 
enforcible,  but  with  jurisdiction  in  the  courts  to  enjoin  or  suspend 
any  order  of  the  commission.  This  jurisdiction  of  the  circuit 
courts  over  the  orders  of  the  commission  under  the  act  of  1910  is 
now  vested  in  the  commerce  court. 

The  only  suits  under  the  act  as  amended  to  be  brought  in  the 
circuit  court  are  those  to  enforce  the  reparation  orders  of  the 
commission,  wherein  the  state  court  will  have  concurrent  juris- 
diction, and  also,  it  may  be  added,  suits  in  circuit  courts  to  re- 
cover penalties  from  the  carriers  for  disobedience  of  other  orders, 
l^'nder  the  new  federal  code  of  procedure,  this  jurisdiction  is 
vested  in  the  district  courts. 

Under  this  new  procedure  the  decisions  as  to  the  necessary  and 
proper  parties  and  the  procedure  in  the  circuit  court  which  were 
rendered  before  the  amendment  of  the  act  have  only  a  limited 
application.  In  the  Texas  &  Pacific  Case,  162  U.  S.  197,  40  L. 
Ed.  940,  fnipra,  it  was  held  by  the  supreme  court  that  the  Inter- 
state Connnerce  Commission  was  a  body  corporate,  with  the  legal 
capacity  to  be  a  party  plaintiff  or  defendant  in  the  federal  courts 
and  that  proceedings  in  the  circuit  courts  to  enforce  the  orders 
of  the  commission  could  be  filed  by  any  person  interested  therein 
or  by  the  commission  itself  as  the  party  complainant. 

It  was  also  held  that  testimony  in  the  circuit  court  was  not 
limited  to  that  taken  before  the  commission,  that  is.  either  party 
may  introduce  other  testimony,  see  X.  ().  v.^-  T.  P.  K.  Co.  v.  Com- 


491  TDE   INTERSTATE    COMMERCE   LAW.  [SECTION   16 

mission,  162  U.  S.  184,  40  L.  Ed.  935.  The  supreme  court  how- 
ever expressed  disapproval  of  such  a  method  of  procedure  on  the 
part  of  the  railroad  companies,  in  withholding  a  large  part  of 
their  evidence  from  the  commission,  and  first  introducing  it  in 
the  circuit  court,  and  said  that  the  purposes  of  the  act  called  for 
a  full  inquiry  hy  the  commission  in  the  first  instance.  It  was  uni- 
formly held  in  such  suits  to  enforce  the  orders  of  the  commission 
that  the  hurden  rested  upon  the  railroad  to  show  the  orders  to  be 
erroneous.  See  Comm.ission  v.  S.  N.  Ry:  Co.,  102  Fed.  709 ;  and 
Same  v.  C,  B.  &  Q.  R.  Co.,  94  Fed.  272. 

Tt  was  held  in  Nayler  v.  Lehigh  Valley  R.  Co.,  188  Fed.  860 
(1911),  C.  C.  Pa.,  that  a  suit  to  enforce  an  order  for  reparation 
was  one  in  tort  for  damages,  and  that  the  State  Procedure  Act 
requiring  affidavits  of  defense  in  suits  upon  contracts  did  not 
apply  to  such  a  proceeding. 

§  391.  The  judicial  review  of  the  commission's   orders. — 

When  the  amendatory  act  of  1906  was  before  congress,  the  ques- 
tion of  the  regulation  and  the  exercise  of  the  judicial  power  in 
enjoining  and  suspending  any  order  or  requirement  of  the  com- 
mission, was  the  subject  of  extended  discussion,  and  the  provi- 
sions of  the  act  of  1906,  including  suits  against  the  commission, 
were  the  result  of  a  compromise"  between  the  opposing  parties  of 
what  was  called  the  "broad  review"  and  a  "narrow  review." 
Under  the  act  as  amended  in  1906,  provision  was  made  for  the 
filing  of  these  suits  to  set  aside,  annul  or  suspend  any  order  of 
the  commission  in  the  districts,  where  the  carrier  against  whom 
the  order  or  requirement  was  made  had  its  principal  operating 
office,  and  jurisdiction  to  determine  such  suits  was  vested  in  the 
circuit  courts;  and  under  the  provisions  of  the  Expedition  Act, 
which  was  made  applicable,  finally  determined  in  the  circuit 
court  by  the  circuit  judges  of  such  circuit  and  appealed  directly 
to  the  supreme  court.  A  number  of  cases  have  been  determined 
both  in  the  circuits,  and  some  by  the  supreme  court,  which  have 
been  cited  in  connection  with  different  subjects  involved. 

The  amendatory  act  of  1910  provided  also  for  the  establish- 
ment of  the  commerce  court  (Appendix),  and  that  court  was 
vested  with  jurisdiction  of  all  cases  brought  to  enjoin,  set  aside, 
annul  or  suspend  in  Avhole  or  in  part  any  order  of  the  commis- 
sion. All  of  the  provisions  of  the  act  of  1906  regulating  the 
venue  in  such  suits  are  omitted  in  the  re-enacted  section  of 
1910. 


§    394]  TllK    INTERSTATE    COM.MKRCK   LAW.  405 

§  392.  The  jurisdiction  of  the  circuit  court. — The  suit  of  the 
party  ehiiiiiiiig  rei)ara1iou  under  au  order  of  the  commission  is 
to  he  hrouii't  in  the  circuit  court  of  the  United  States  in  the 
district,  wherein  lie  resides  and  in  which  is  located  the  principal 
operating  othce  of  tlie  carrier,  or  through  which  the  road  of  the 
carrier  runs.  In  Interstate  Commerce  Commission  v.  W.  N.  Y.  & 
Pa.  R.  Co.,  82  Fed.  192,  the  court  said  that  the  violation  within 
the  judicial  district  of  an  order  of  commission  by  any  one  of  the 
defendants  or  one  of  the  parties  to  a  common  arrange^iient  for 
interstate  shipments,  was  violation  or  disobedience  of  all  the  par- 
ties defendant,  where  the  parties  were  all  acting  under  a  common 
arrangement,  and  that  all  of  them  were  subject  to  the  jurisdic- 
tion of  the  court  wherein  any  of  them  were  located. 

§  393.  The  right  of  appeal  under  amended  act. — The  provi- 
sions for  appeal  lunler  the  aet  of  ]!)()G,  and  the  original  act  prior 
to  the  amendment  of  that  year,  are  now  superseded  by  the  pro- 
visions of  the  act  of  1910  relating  to  the  conmierce  court,  to  which 
is  given  all  the  jurisdiction  relating  to  cases  brought  to  enjoin, 
to  set  aside,  annul  or  suspend  in  whole  or  in  part  any  order  of 
the  commission,  which  have  been  heretofore  vested  in  the  circuit 
court.  Under  this  commerce  act,  all  appeals  are  taken  to  the 
Supreme  Court. 

Suits  for  reparation  in  the  United  States  circuit  courts  are 
conducted  as  other  suits  and  are  subject  to  the  rights  of  appeal 
applicable  in  the  federal  circuits;  and  if  brought  in  the  state 
courts,  to  the  law  regulating  appeal  in  the  state  courts. 

§  394.  Jurisdiction  of  the  courts  in  reviewing  the  orders  of 
the  commission. — Under  the  act  as  amended  the  only  court  hav- 
ing jurisdiction  over  the  orders  of  the  commission  other  than  for 
the  enforcement  of  claims  for  reparation  or  for  the  recovery  of 
penalties  will  be  the  newly  established  commerce  court.  See 
§  391.  The  commerce  court  in  its  earliest  decisions  rendered  soon 
after  its  organization  has  indicated  the  limitation  of  its  jurisdic- 
tion in  reviewing  the  orders  of  the  commission.  Thus  in  case  No. 
2,  decided  July  20,  1911,  of  the  Atchison  Topeka  &  Santa  Fe 
Railroad  Co.  et  al.,  petitioners,  v.  the  Interstate  Commerce  Com- 
mission in  determining  the  right  of  the  railroads  to  make  a  charge 
for  industrial  track  service  in  Los  Angeles  where  it  suspended 


49G  THE   IXTERSTATE    COMMERCE   LAW.  [SECTION    16 

the  order  of  the  coinmission  prohibiting  such  charge,  the  court 
said  that  the  conclusion  of  the  commission  that  the  charge  of 
violative  of  the  commerce  act  was  a  conclusion  of  law  and  of 
course  was  open  to  inquiry  in  the  commerce, court.  In  the  exam- 
ination of  the  report  of  the  commission  the  court  was  limited  to 
the  opinion  of  the  majority  of  the  commission,  the  views  of  the 
minority  not  being  open  to  consideration.  In  this  the  court  fol- 
lowed the  view  expressed  by  the  supreme  court  in  Interstate 
Commerce  Commission  v.  Del.  L.  &  W.  R.  Co.,  220  U.  S.  235,  55 

L.  Ed.  ,  wherein  the  supreme  court  held  that  findings  of 

fact  made  by  the  interstate  commerce  commission  in  a  proceed- 
ing for  redress  for  unlawful  discrimination  in  railway  rates 
were  not  open  to  review  in  the  courts. 

The  commerce  court  also^  considered  the  same  question  of 
the  limitation  of  its  jurisdiction  in  a  rate  case  (Case  No.  5), 
of  the  Receivers  and  Shippers  Association  of  Cincin- 
nati V.  Interstate  Commerce  Commission,  decided  July  20, 
1911,  wherein  it  affirmed  the  order  of  the  commission  as  to 
rates  from  Cincinnati  to  Chattanooga.  The  court  said  that  it  had 
no  power  to  fix  rates  and  could  not  say  that  the  elements  to  the 
commission  took  into  consideration  in  fixing  the  schedule  com- 
plained of  were  improper  for  the  commission  to  consider,  and 
therefore,  could  not  conclude  that  the  commission  based  a 
schedule  of  rates  upon  improper  grounds. 

The  same  view  was  expressed  by  the  circuit  judges  of  the  fifth 
circuit  in  L.  &  N.  R.  Co.  v.  Interstate  Commerce  Commission,  184 
Fed.  119,  which  was  decided  by  that  court  in  April,  1910, 
before  the  commerce  court  was  extended  so  that  the  circuit  court 
was  then  vested  with  the  jurisdiction  since  transferred  to  the 
commerce  court.  The  court  said  that  in  a  suit  to  enjoin  the  en- 
forcement of  a  rate  it  did  not  act  as  an  appellate  rate  making 
commission,  but  its  office  was  to  see  that  the  commission  did  not 
exceed  its  power  and  not  to  determine  whether  it  erred  in  the 
exercise  of  it. 

To  the  same  effect  see  M.  K.  &  T.  R.  R.  Co.  v.  Interstate  Com- 
merce Com.,  164  Fed.  645  (1908),  by  the  circuit  judges  of  the 
eighth  circuit.  It  was  there  held  that  the  court  would  take  into 
consideration  evidence  other  than  that  before  the  commission,  but 
the. presumption  was  that  the  order  of  the  commission  was  valid 


§    395j  THE    IX-IEKSTATJi:    CUMMERCK    LAW.  4<J7 

and  that  tlie  burden  was  upon  the  party  attacking  to  make  a  clear 
ease.  See  also  the  decisions  of  the  supreme  court  construing  the 
limits  of  the  judicial  power  over  the  decisions  of  the  commission. 
supra,  §  52. 

§  395.  The  commerce  court  on  the  parties  entitled  to  apply 
for  review  of  commission's  orders.— In  Proctor  &  Gamble  Co. 
V.    United    States,    it    was    claimed    that    the    commerce    court 
had  no  jurisdiction  over  the   complaint  filed   by  the   shipper 
which  had  been  presented  to  the  interstate  commerce  cominissiou 
and  disallowed,  and  then  the  proceeding  had  been  filed  in  the 
circuit  court  seeking  to  set  aside  the  order  of  the  commission. 
This  was  a  complaint  against  the  exaction  of  demurrage  on 
private  cars,  see  supra,  §  254.     The  jurisdiction  of  the  court  was 
denied  on  the  ground  that  the  petitioner  was  a  shipper  and  the 
interstate  commerce  commission,  having  merely  dismissed  the 
complaint  Avhich  was  made  to  it  and  granted  no  affirmative  relief, 
that  there  was  nothing  in  the  order  of  dismissal  which  it  entered 
that  afforded  any  basis  for  action,  and  that  it  was  only  the  car- 
rier aginst  whom  the  order  is  :nade  in  favor  of  the  shipper  that 
can  bring  the  case  for  review  into  tlie  commerce  court,  and  that 
the  shipper  was  concluded  by  the  action  of  the  commission,  what- 
ever it  might  chance  to  be.    But  the  court  declined  to  entertain 
this  view  and  said  that  the  right  of  resort  to  the  court  extended 
to  every  one  injuriously  affected  by  the  order  of  the  commission. 
It  was  therefore  held  that  the  action  of  the  commission,  having 
the  effect  of  an  adverse  decision  with  respect  to  the  matter 
involved,  even  though  negative  in  character,  was  an  order  which 
the  court  could  enjoin  or  get  aside.     The  petitioner,  therefore, 
correctly  came  into  the  commerce  court,  as  it  could  previously 
have   gone   into   the    circuit   court  of   the    United    States,   the 
requisite  amount  being  involved  and  the  ease  being  one  arising 
under  the  federal  law,  to  have  the  action  of  the  commission  dis- 
missing its  complaint  set  aside  and  the  demurrage  charge  disal- 
lowed, if  that  should  be  the  conclusion  reached  with  regard  to  it. 
either  by  direct  decree,  or  by  remanding  the  case  to  the  commis- 
sion Avith  directions  to  sustain  the  complaint.     The  court  there- 
fore entertained  the  petition,  and  dismissed  the  case  upon  con- 
sideration of  the  merits. 
32 


498  THE   INTERSTATE    COMMERCE   ACT.  [SECTION    16 

§  396.  The  finality  of  the  orders  of  the  commission. — It  nec- 
essarily follows  from  this  limitation  of  the  power  of  judicial 
review,  that  the  administrative  orders  of  the  commission  in  the 
exercise  of  this  jurisdiction  in  determining  the  reasonableness  of 
a  railroad  rate  or  regulation  are  final.  In  the  words  of  the 
supreme  court  in  the  Coal  Regulation  Case,  supra,  ''power  to 
make  the  order  and  not  the  mere  expediency  or  wdsdom  of  having 
made  it,  is  the  question,"  when  brought  into  court. 

In  making  such  administrative  orders  the  commission  has 
necessarily  a  wide  discretion  and  many  factors  may  require  con- 
sideration in  any  specific  case.  The  conclusion  may  be  the  de- 
termination of  a  mixed  question  of  law  and  fact.  The  announce- 
ment by  the  commission  that  a  certain  factor  is  controlling  in  the 
consideration  of  a  rate  or  regulation  would  be  a  conclusion  of 
law,  which  would  be  subject  to  judicial  review,  though  the  con- 
clusion of  the  commission  upon  a  reasonableness  of  the  rate  or 
regulation  without  any  such  conclusion  of  law  as  to  any  control- 
ing  factor  would  not  be  subject  to  review.  This  was  illustrated 
in  the  decision  of  the  supreme  court  in  the  So.  Pacific  Case, 
supra,  §  174,  that  the  fixing  a  rate  for  the  encouragement  of 
certain  business  interests  was  beyond  the  power  of  the  commis- 
sion. If  the  commission,  however,  had  simply  determined  the 
reasonableness  of  the  rate  without  recognizing  any  such  control- 
ling factor  in  the  determination,  its  conclusion  would  not  have 
been  open  to  review.  In  this  connection,  it  should  be  noted  that 
there  is  no  requirement  in  the  Act  of  any  statement  by  the  com- 
mission of  the  reasons  of  its  conclusions. 


§    397]  THE    INTERSTATE    COMMERCE    ACT.  499 


Section  IGa. 

§  397.  Seotion  ICa. 

§  397.  Section  16a.— Sec.  16a.  (Added  June  2D,  190G.)  That 
after  a  docision,  order,  or  requirement  has  been  made  by  the 

rConiniisMlon  may  grrnnt  rchearinKM.I 

Commission  in  any  proceodincr  any  party  thereto  may  at  any  time 
make  application  for  rehoarini;  of  the  same,  or  any  matter  de- 
termined therein,  and  it  shall  be  lawful  for  the  Commission  in  its 
discretion  to  grant  snch  a  rehearing  if  sufficient  reason  therefor 

[Application    for  rehearing  shall   not   operate  an   stay   of 
proeee(linK.s,   un|(>s.s  so   ordertMl   by   oonimiMsion.I 

be  made  to  appear.  Applications  for  rehearing  shall  he  governed 
by  such  general  rules  as  the  Commission  may  establish.  No  such 
application  shall  excuse  any  carrier  from  complying  with  or  obey- 
ing any  decision,  order,  or  requirement  of  the  Connnission,  or 
operate  in  any  nicinner  to  stay  or  postpone  the  enforcement  there- 
of, without  the  special  order  of  the  Commission.  In  case  a  re- 
hearing is  granted  the  proceedings  thereupon  shall  conform  as 
nearly  as  may  be  to  the  proceedings  in  an  original  hearing,  ex- 
cept as  the  Commission  may  otherwise  direct;  and  if,  in  its  judg- 
ment, after  such  rehearing  and  the  consideration  of  all  facts,  in- 
cluding those  arising  since  the  former  hearing,  it  shall  appear 
that  the  original  decision,  order,  or  requirement  is  in  any  respect 
unjust  or  unwarranted,  the  Commission  may  reverse,  change,  or 

[Commission     may,     on     rehearing:,    reverse,     chang:e,    or 
modify   order.] 

modify  the  same  accordingly.  Any  decision,  order,  or  require- 
ment made  after  such  rehearing,  reversing,  changing,  or  modify- 
ing the  original  determination  shall  be  subject  to  the  same  pro- 
visions as  an  original  order. 

It  would  seem  that  this  section  was  needless,  though  it  was 
recommended  by  the  commission,  as  the  right  to  review  and  to 
modify  its  own  decisions  probably  existed  under  the  very  com- 
prehensive grant  of  powers  under  the  preceding  sections. 


500  THE   INTERSTATE    COMMERCE    ACT,  [SECTION    17 


Section  17. 
§  398.  Interstate  Commerce  Commission — Form  of  procedure. . 

§  398  (295).  Interstate  Commerce  Commission — Form  of  pro- 
cedure.— Sec.  17.  (As  amended  March  2,  18S9.)  That  the  com- 
mission may  conduct  its  proceedings  in  such  manner  as  will  best 
conduce  to  the  proper  dispatch  of  business  and  to  the  ends  oi: 
justice.  A  majority  of  the  Commission  shall  constitute  a  quorum 
for  the  transaction  of  business,  but  no  Commissioner  shall  parti- 
cipate in  any  hearing  or  proceeding  in  which  he  has  any 
pecuniary  interest.  Said  Commission  may;  from  time  to  time, 
make  or  amend  such  general  rules  or  orders  as  may  be  requisite 
for  the  order  and  regulation  of  proceedings  before  it,  including 
forms  of  notices  and  llie  service  thereof,  which  shall  conform,  as 
nearly  as  may  be,  to  those  in  use  in  the  courts  of  the  United 

[Parties  may  appear  before  the  commission  in  person  or 
by  6ttorney.] 

States.  Any  party  may  appear  before  said  Commission  and  be 
heard  in  person  or  by  attorney.  Every  vote  and  official  act  of 
Commission  shall  be  entered  of  record,  and  its  proceedings  shall 
be  public  upon  the  request  of  either  party  interested.    Said  Com- 

[Offlciai  seal.] 

mission  shall  have  an  official  seal,  which  shall  be  judieally  noticed. 
Either  of  the  members  of  the  Commission  may  administer  oaths 
and  affirmations  and  sign  subpa-nas. 

For  rules  of  practice  adopted  by  the  Commission  in  the  conduct 
of  cases  and  proceedings  under  the  Act,  see  appendix,  p.  655,  in- 
fra; and  as  to  forms  of  procedure  adopted  by  the  Commission, 
see  p.  665,  infra.  These  rules  and  forms  have  been  very  liber- 
ally construed  by  the  Commission.     See  supra,  §  367. 


§    400]  THE    INTERSTATE    COMMERCE    ACT.  501 


Section  18. 

§  399.  Salaries  of  commissionei-s,  secretary,  etc 
400.  Expenses  of  the  commission. 

§  399  (296).  Salaries  of  commissioners,  secretary,  etc. — Sec. 
18.     (As  amended  March  2,  18S9.)     [See  Section  24,  increasing 

[Salaries  of  commissioners.] 

salaries  of  Commissioners.]  That  each  Commissioner  shall  receive 
an  annual  salary  of  seven  thousand  five  hundred  dollars,  payable 
in  the  same  manner  as  the  judges  of  the  courts  of  the  United 
States.    The  Commission  shall  appoint  a  secretary,  who  shall  re- 

[Secretary — how  appointed;  salary.] 

ceive  an  annual  salary  of  three  thousand  five  hundred  dollars,* 
payable  in  like  manner.     The  Commission  shall  have  authority 

[E^mployees.] 

to  employ  and  fix  the  compensation  of  such  other  employees  as  it 
may  find  necessary  to  the  proper  performance  of  its  duties.  Un- 
til otherwise  provided  by  law,  the  Commission  may  hire  suitable 

[Oflices   and  supplies.] 

offices  for  its  use,  and  shall  have  authority  to  procure  all  neces- 
sary office  supplies.     "Witnesses  summoned  before  the  Commis- 

[Wltnesses'  fees.] 

sion  shall  be  paid  the  same  fees  and  mileage  that  are  paid  wit- 
nesses in  the  courts  of  the  United  States. 

[Expenses  of  the  commission — how  paid.] 

All  of  tlie  expenses  of  the  Commission,  including  all  necessary 
expenses  for  transportation  incurred  by  the  Commissioners,  or  by 
their  employees  under  their  orders,  in  making  any  investigation, 
or  upon  official  business  in  any  other  places  than  in  the  city  of 
Washington,  shall  be  allowed  and  paid  on  the  presentation 
of  itemized  vouchers  therefor  approved  by  the  chairman  of  the 
Commission. 

(This  section  is  amended  by  section  24,  infra,  added  by  the 
amendatory  act  of  June  29,  1906,  increasing  the  number  and 
salaries  of  the  commission.) 

§  400  (297).  Expenses  of  the  commission. — The  secretary  of 
the  Inter.state  Commerce  Conuuission  is  entitled  to  be  reimbursed 
for  telegrams  sent  by  him  in  pursuance  of  directions  of  the  com- 
mission,   approved   by   the   chairman   of   the   commission,    and 


•Increased  to  $5,000  by  sundry  civil  act  of  March  4,  1907,   34  Stat  L., 
1311. 


502  THE   INTERSTATE    COMMERCE   ACT.  [SECTION    18 

accompanied  by  the  request  of  the  chairman  that  the  rules  of  the 
comptroller  as  to  the  production  of  copies  of  telegrams  for  which 
credit  is  asked  be  disregarded  on  account  of  tlie  confidential  char- 
acter of  the  messages,  the  secretary  having  also  offered  to  submit 
the  books  of  the  commission  to  the  comptroller  and  auditing  offi- 
cers of  the  treasury.  United  States  v.  jMoseley,  187  U.  S.  322,  47 
L.  Ed.  198  (1902),  affirming  the  judgment  of  the  court  of  claims. 


§    402]  THE    INTERSTATE    COMMEK".  503 


OECTIUX    II). 

§  401.  Principal  office  of  the  commission,  etc. 
402.  Practice  of  commission   in   hearings. 

§  401  (298).  Principal  office  of  the  commission,  etc. — Sec.  19. 
Tl);it  tile  i)nnci|)ril  olTice  of  tho  Cominissioi)  sluill  1)0  in  tlic  city  of 
\VasliiLi<itoi],  where  its  general  sessions  shall  he  held;  hut  when- 
ever tho  eonvenicnee  of  the  puhlic  or  the  parties  may  be  pro- 
moted, or  delay  or  expense  jirevented  thereby,  the  Commission 

[SeHitions   of  the  coniniiHNion.] 

may  hold  sjjeeial  sessions  in  any  part  of  the  United  States.     It 

[ConiniiNsiuii  may   prosecute  In<|iiirieH  by  one  or  more  of 
Its  menibors  in  any  part  of  the  Vnlteil  Statow.l 

may,  by  one  or  more  of  the  Commissioners,  jirosecute  any  inquiry 
necessary  to  its  duties,  in  any  part  of  tlio  Tinted  States,  into  any 
matter  or  question  of  fact  pertaining  to  the  business  of  any  com- 
mon carrier  sul)jeot  to  the  provisions  of  this  Act. 

§  402  (299).  Practice  of  commission  in  hearing. — The  com- 
mission has  from  its  first  organization  followed  the  practice  of 
directing  cases  involving  local  rates  to  be  heard  before  one  or 
more  members  of  the  Commission  at  a  central  point  in  the  ter- 
i-itory  immediately  affected  by  the  rates. 


504  THE    INTERSTATE    COMMERCE   ACT.  [SECTION    20 


Section  20. 

§  403.  Section  20  as  amended. 

404.  The  amendments  of  1906  and  1910. 

405.  Railroads  not  subject  to  section  20  of  the  act. 

406.  The  enforcement  of  reports  by  mandamus. 

407.  The  liability  of  the  initial  carrier. 

408.  The  employment  of  special  examiners. 

409.  The  effectiveness  of  the  publicity  provisions  of  the  section. 

§  403.  Section  20  as  amended. — Sec,  20.   {As  amended  June 
29, 1906,  February  25,  1909,  and  June  18,  1910.)     That  the  Com- 

[Officers  subject  to  act,  and  civners  of  railroads  engaged 
in  interstate  commerce  must  render  full  annual  reports 
to  commission;  and  commission  is  authorized  to  pre- 
scribe manner  in  ■which  reports  shall  be  made  and  re- 
quire specific   answers   to   all   questions.] 

mission  is  hereby  authorized  to  require  annual  reports  from  all 
common  carriers  subject  to  the  provisions  of  this  Act,  and  from 
the  owners  of  all  railroads  engaged  in  interstate  commerce  as  de- 
fined in  this  Act ;  to  prescribe  the  manner  in  which  such  reports 
shall  be  made,  and  to  require  from  such  carriers  specific  answers 
to  all  questions  upon  which  the  Commission  may  need  informa- 

[W'hat  reports  of  carriers  shall  contain.] 

tion.  Such  annual  reports  shall  show  in  detail  the  amount  of 
capital  stock  issued,  the  amounts  paid  therefor,  and  the  manner 
of  payment  for  the  same ;  the  dividends  paid,  the  surplus  fund,  if 
any,  and  the  numbers  of  stockholders;  the  funded  and  floating 
debts  and  the  interest  paid  thereon ;  the  cost  and  value  of  the  car- 
rier 's  property,  franchises,  and  equipments ;  the  number  of  em- 
ployees and  the  salaries  paid  each  class ;  the  accidents  to  passen- 
gers, employees,  and  other  persons,  and  the  causes  thereof;  the 
amounts  expended  for  improvements  each  year,  how  expended, 
and  the  character  of  such  improvements;  the  earnings  and  re- 
ceipts from  each  branch  of  business  and  from  all  sources;  the 
operating  and  other  expenses;  the  balances  of  profit  and  loss; 
and  a  complete  exhibit  of  the  financial  operations  of  the  carrier 
each  year,  including  an  annual  balance  sheet.    Such  reports  shall 

[Commission  may  prescribe  uniform  system  of  accounts 
and  manner  of  keeping  accounts.] 

also  contain  such  information  in  relation  to  rates  or  regulations 
concerning  fares  or  freights,  or  agreements,  arrangements,  or 
contracts  affecting  the  same  as  the  Commission  may  require ;  and 
the  Commission  may,  in  its  discretion,  for  the  purpose  of  enabling 
it  the  better  to  carry  out  the  purposes  of  this  Act,  prescribe  a 
period  of  time  within  which  all  common  carriers  subject  to  the 
provisions  of  this  Act  shall  have,  as  near  as  may  be,  a  uniform 


ji    403]  THE    INTERSTATE    COMMERCE    ACT.  505 

system  of  acfoimt.s,  and  the  jnannor  in  whieh  ^ndi  accounts  shall 
he  kept. 

[Annual  reporfH  to  be  filed  with  conimiMHion  by  Septem- 
ber :tO  of  eiu'b  year.] 

Said  detailed  reports  sliall  contain  all  the  required  statistics  for 
the  period  of  twelve  months  ending  on  the  thirtieth  day  of  June 
in  each  year,  or  on  the  thirty-first  day  of  December  in  each  year 
if  the  Commission  by  order  substitute  tliat  period  for  the  year 
ending  June  thirtieth,  and  shall  bo  made  out  under  oath  ;ind  filed 
with  the  conunission  at  its  office  in  "Washington  within  three 
inonths  after  the  close  of  the  year  for  which  the  report  is  made, 

[ConimiNNlon  may  grant  additional  time.] 

unless  additional  time  be  granted  in  any  case  by  the  Commission ; 
and  if  any  carrier,  person,  or  corporation  subject  to  the  provi- 
sions of  this  Act  shall  fail  to  make  and  file  said  annual  reports 
within  the  time  a])ove  specified,  or  within  the  time  extended  by 
the  Conunission,  for  making  and  filing  the  same,  or  shall  fail  to 
make  specific  answer  to  any  question  authorized  by  the  provi- 
sions of  this  section  within  thirty  days  from  the  time  it  is  law- 
fully required  so  to  do,  such  party  shall  forfeit  to  the  United 

[Penalty.] 

States  the  sum  of  one  hundred  dollars  for  each  and  every  day  it 
shall  continue  to  be  in  default  with  respect  thereto.  The  Com- 
mission sliall  also  have  authority  by  general  or  special  orders  to 

[Montlily  or  periodical  reports.] 

require  said  carriers,  or  any  of  them,  to  file  monthly  reports  of 
earnings  and  expenses,  and  to  file  periodical  or  special,  or  both 
periodical  and  special,  reports  concerning  any  matters  about 
which  the  Commission  is  authorized  or  required  b}^  this  or  any 
other  law  to  inquire  or  to  keep  itself  informed  or  which  it  is  re- 
quired to  enforce ;  and  such  periodical  or  special  reports  sliall  be 
under  oath  whenever  the  Commission  so  requires;  and  if  any 
such  carrier  shall  fail  to  make  and  file  any  such  periodical  or  spe- 
cial report  within  the  time  fixed  by  the  Commission,  it  shall  be 
subject  to  the  forfeitures  last  above  provided. 

[Recovery  of  forfeitures.] 

Said  forfeitures  shall  be  recovered  in  the  manner  provided  for 
the  recovery  of  forfeitures  under  the  provisions  of  this  Act. 

[Oath  to  anniinl  reports,  ho«v  taken.] 

The  oath  required  by  this  section  may  be  taken  before  anj^  per- 
son authorized  to  administer  an  oath  by  the  laws  of  the  State  in 
which  the  same  is  taken. 

[Comnii.ssion   may  prescribe   forms   of  accoants,   records, 
and  memoranda,  and  have  access  thereto.] 

The  Commission  may,  in  its  discretion,  prescribe  the  forms  of 
any  and  all  accounts,  records,  and  memoranda  to  be  kept  by  car- 
riers subject  to  the  provisions  of  this  Act,  including  the  accounts, 
records,  and  memoranda  of  the  movement  of  traflfic  as  well  as  the 
receipts  and  expenditures  of  moneys.     Tlic  Commission  shall  at 


506  THE   INTERSTATE    COMMERCE    ACT,  [SECTION    20 

all  times  have  access  to  all  accounts,  records,  and  memoranda 
kept  by  carriers  subject  to  this  Act,  and  it  shall  be  unlawful  for 

[Carrier  can  not  keep  other  accounts  than  those  pre- 
scribed J»y  eoinniission.] 

such  carriers  to  keep  any  other  accounts,  records,  or  memoranda 
than  those  prescribed  or  approved  by  the  Commission,  and  it  may 
employ  special  agents  or  examiners,  who  shall  have  authority 

[Commission  may  employ  special  examiner  to  Inspect  ac- 
counts and  records.] 

under  the  order  of  the  Commission  to  inspect  and  examine  any 
and  all  accounts,  records,  and  memoranda  kept  by  such  carriers. 
This  provision  shall  apply  to  receivers  of  carriers  and  operating 
trustees. 

[Punishment  of  carrier  by  forfeiture  for  failure  to  Iseep 
accounts  or  records  as  prescribed  by  commission  or  al- 
low inspection  o£  accounts  or  records.] 

In  case  of  failure  or  refusal  on  the  part  of  any  such  carrier,  re- 
ceiver, or  trustee  to  keep  such  accounts,  records,  and  memoranda 
on  books  and  in  the  manner  prescribed  by  the  Commission,  or  to 
submit  such  accounts,  records,  and  memoranda  as  are  kept  to  the 
inspection  of  the  Commission  or  any  of  its  authorized  agents  or 
examiners,  such  carrier,  receiver,  or  trustee  shall  forfeit  to  the 
United  States  the  sum  of  five  hundred  dollars  for  each  such 
offense  and  for  each  and  every  day  of  the  continuance  of  such 
offense,  such  forfeitures  to  be  recoverable  in  the  same  manner  as 
other  forfeitures  provided  for  in  this  Act. 

[Punishment  of  person  for  false  entry  in  accounts  or  rec- 
ords, or  mutilation  of  accounts  or  records,  or  for  keep- 
ing other  accounts  than  those  prescribed  by  commis- 
sion.     Fine  or  imprisonment  or  both.] 

Any  person  who  shall  willfully  make  any  false  entry  in  the 
accounts  of  any  book  of  accounts  or  in  any  record  or  memoranda 
kept  by  a  carrier,  or  who  shall  willfully  destroy,  mutilate,  alter, 
or  by  any  other  means  or  device  falsify  the  record  of  any 
such  account,  record,  or  memoranda,  or  who  shall  willfully 
neglect  or  fail  to  make  full,  true,  and  correct  entries  in  such  ac- 
counts, records,  or  meiiioranda  of  all  facts  and  transactions  ap- 
pertaining to  the  carrier's  business,  or  shall  keep  any  other  ac- 
counts, records,  or  memoranda  than  those  prescribed  or  approved 
by  the  Commission,  shall  be  deemed  guilty  of  a  misdemeanor, 
and  shall  be  subject,  upon  conviction  in  any  court  of  the  United 
States  or  competent  jurisdiction,  to  a  fine  of  not  less  than  one 
thousand  dollars  nor  more  than  five  thousand  dollars  or  imprison- 
ment for  a  term  not  less  than  one  year  nor  more  than  three  years, 

[Amendment  of  February  25,  1909.] 

or  both  such  fine  and  imprisonment :  Provided,  That  'the  Com- 
mission may  in  its  discretion  issue  orders  specifying  such  operat- 
ing, accounting,  or  financial  papers,  records,  books,  blanks,  tick- 
ets, stubs,  or  documents  of  carriers  which  may,  after  a  reason- 


§    403]  THE    JXTKRSTATE    COMMERCE    ACT.  507 

[When    ilfNl  riiodoii    of   iuiikth    iktiiiImnII*!)-.! 

able  time,  be  destroyed,  and  preserihiiifj;  the  leri'^h  of  time  such 
books,  papei's,  or  doeuments  shall  be  preserved. 

[PiiiilMknioiit  of  Hpecliil  r.viiniiuer  y%'Iio  dIvuleeM  factM  or 
iuformalioii  whhiuit  niitborlty.  Klue  or  imiiriMonmcnt 
or   liodi.] 

Any  exainiiitM-  wlio  (.livulfies  any  fact  or  inforiiiatiou  which 
may  come  to  liis  knowledge  during  the  course  of  such  examina- 
tion, except  in  so  far  as  lie  may  he  directed  Ijy  the  Conuiiission 
or  by  a  court  or  judge  thereof,  shall  be  sul).iect,  upon  conviction 
in  any  court  of  the  United  States  of  competent  jurisdiction,  to 
a  fine  of  not  more  than  tive  thousand  dollars  or  imprisonment  for 
a  term  not  exceeding  two  years,  or  both. 

[Uiiltetl  Stiites  courts  may  Imniic  inaiidaiiiii.H  to  compel 
coni|>liauce  «vith  i>ro%  isioiiM  of  act.| 

That  the  circuit  and  district  courts  of  the  Uuitetl  States  shall 
have  jurisdiction,  upon  the  application  of  the  Attorney-General 
of  the  United  States  at  the  recpiest  of  the  Commission,  allegiu<r 
a  failure  to  comply  with  or  a  violation  of  any  of  the  provisions  of 
said  Act  to  regulate  commerce  or  of  any  Act  supplementary 
thereto  or  amendatory  thereof  by  any  common  carrier,  to  issue 
a  writ  or  writs  of  mandannis  commanding  such  common  carrier 
to  comply  with  the  [)rovisions  of  said  Acts,  or  any  of  them. 

[Commi.<4.Mion  may  employ  Npccial  uk:cii<s  or  c.vamiiierH  to 
adiiiiniii.stor  oaths,  examine  witiie.s.scs,  and  receive  evi- 
dence.] 

And  to  carry  out  and  give  eflfect  to  the  provisions  of  said  Acts, 
or  any  of  them,  the  Commission  is  hereby  authorized  to  employ 
special  agents  or  examiners  who  shall  have  power  to  administer 
oaths,  examine  witnesses,  and  receive  evidence. 

[Reeeivinu'  common  carrier  liable  for  los.s  or  damag'e  on 
throiiK'b  Hliipments  carried  i>y  it  or  Ity  any  connection, 
Irrespective  of  contract   to  contrary. | 

That  any  common  cairier.  railroad,  or  transi)ortation  company 
receiving  property  for  transportation  from  a  jioint  in  one  State 
to  a  point  in  another  State  shall  issue  a  receipt  or  bill  of  lading 
therefor  and  shall  be  liable  to  the  lawful  holder  thereof  for  any 
loss,  damage,  or  injury  to  such  property  caused  by  it  or  by  any 
common  carrier,  railroad,  or  transportation  company  to  which 
such  property  may  be  delivered  or  over  whose  line  or  lines  such 
property  may  pass,  and  no  contract,  receipt,  rule,  or  regulation 
shall  exempt  such  common  carrier,  railroad,  or  transportation 

[Remedies  under  existtne  law  not  barred.] 

company  from  the  liability  hereby  imposed.  Provided:  That 
nothing  in  this  section  shall  deprive  any  holder  of  such  receipt 
or  bill  of  lading  of  any  remedy  or  right  of  action  which  he  has 
under  existing  law. 

[Initial  carrier  may  have  recourse  upon  carrier  respon- 
sible for  loss  or  dnmase.] 

That  the  common  carrier,  railroad,  or  transportation  com- 
pany issuing  such  receipt  or  bill  of  lading  shall  be  entitled  to 


508  THE   INTERSTATE    COMMERCE    ACT.  [SECTION    20 

recover  from  the  common  carrier,  railroad,  or  transportation 
company  on  whose  line  the  loss,  damage,  or  injury  shall  have  been 
snstained  the  amount  of  such  loss,  damage,  or  injury  as  it  may 
be  required  to  pay  to  the  owners  of  such  property,  as  may  be 
evidenced  by  any  receipt,  judgment,  or  transcript  thereof. 

§  404.  The  amendments  of  1906  and  1910.— This  section  has 
been  extensively  amended.  Thus  by  the  act  of  1906  the  pro- 
vision for  the  annual  reports  was  made  more  specific,  and  also 
the  reports  of  accidents,  and  detailed  regulation  of  the  forms  of 
accounts,  records,  memoranda  of  the  carriers,  and  the  prohibition 
of  any  other  records  or  memoranda  than  those  prescribed  by  the 
rules  of  the  commission  ;  the  power  of  inspection,  and  penalties 
to  enforce  this  right  of  inspection,  and  punishment  for  false 
entries,  and  mandamus  to  compel  compliance  with  the  provisions 
of  the  act,  Avith  the  employment  of  special  agents  and  examiners, 
and  the  provision  as  to  the  liability  of  the  initial  carriers,  were 
all  added  in  this  amendment  of  1906. 

In  1910  was  added  the  provision  for  filing  of  reports  at  the 
end  of  the  calendar  year,  if  so  ordered  by  the  commission;  the 
requirement  of  filing  monthly  or  special  reports  was  made  more 
specific,  and  provision  w^as  also  enacted  for  authorizing  the  de- 
struction of  books  and  papers  of  the  carriers  after  a  reasonable 
time. 

§  405.  Railroads  not  subject  to  section  20  of  the  act. — A  rail- 
road which  is  not  subject  to  the  provisions  of  the  Interstate 
Commerce  Act  is  not  bound  to  make  any  report  of  its  business 
to  the  Interstate  Commerce  Commission  under  this  section. 
Thus  a  railroad  located  wholly  within  a  state,  which  transports 
freight,  whether  coming  from  within  or  without  the  state,  solely 
on  local  bills  of  lading,  under  a  special  contract  limited  to  its 
own  lines,  and  without  dividing  charges  with  any  other  carriers, 
or  assuming  any  other  obligations  to  or  for  it,  is  not  bound  to 
make  any  report  of  its  business  to  the  Interstate  Commerce  Com- 
mission. United  States  ex  rel.  v.  K.  &  S.  R.  Co.,  81  Fed.  783 
(1897),  W.  Dist.  of  Mich.  See  also  Commission  v.  Belaire  C.  &  Z. 
R.  Co.,  77  Fed.  912  (1897).  But  where  a  carrier  operates  a  rail- 
road wholly  within  a  state,  but  is  engaged  in  interstate  trans- 
portation by  agreements  for  through  traffic,  it  is  required  under 
the  act  to  report  to  the  commission  as  to  the  interstate  commerce. 
Commission  v.  Seaboard  Ry.  Co.,  82  Fed.  563  (1897). 


§    407 J  THE    IXTKKSTATE    COMMERCE    ACT.  50'J 

§  406.  The  enforcement  of  reports  by  mandamus. — Prior  to 
the  amendatory  act  of  l!)0(i,  it  liad  been  lield  by  the  supreme 
court  in  a  .suit  brouirht  l)y  tliu  eoiinnission  a^^iinst  the  Lake  Sliore 
and  ]\Iiehitj;an  Southern  Railroad  Company,  tliat  the  circuit  court 
had  no  jurisdiction  under  tlie  section  before  the  amendment  of 
190C  to  enforce  re{)ort:s  by  writ  of  mandamus,  as  such  i>ower  to 
issue  origiiud  writs  of  mandamus  only  existed  in  the  circuit 
courts  when  specifically  conferred  by  statute.  Under  the  act  as 
amended  the  right  to  issue  mandamus  to  compel  a  compliance 
with  any  of  the  provisions  of  the  act  is  conferred  upon  the  cir- 
cuit courts  and  district  courts,  upon  application  of  the  attorney- 
general  at  the  request  of  the  commission. 

§  407.  The  liability  of  the  initial  carrier. — The  so-called  Car- 
mack  amendment,  imi)osing  upon  the  initial  carrier  the  liability 
for  loss  or  danuige  on  through  shipments  with  a  remedy  over, 
was  inserted  in  lOOG  iu  this  section  and  has  been  sustained  by  the 
supreme  court  as  the  rightful  exercise  of  the  power  of  congress 
under  the  commerce  clause.     Atlantic  C.  L.  R.  Co.  v.  Riverside 

Mills,  219  U.  S.  p.  186.  55  L.  Ed.  p. (January  3,  1911).    In 

this  case  the  court  affirmed  the  circuit  court  of  the  southern  dis- 
trict of  Georgia,  in  holding  the  initial  carrier  in  an  interstate 
shipment  liable  to  the  shipper  for  a  loss  while  the  goods  were  in 
charge  of  connecting  carriers,  and  although  the  bill  of  lading 
provided  no  carrier  should  be  liable  for  loss  or  damage  not  oc- 
curring on  its  portion  of  the  route.  The  court  said  the  liability 
of  the  receiving  carrier  in  such  a  case  w^as  that  of  a  principal 
for  the  negligence  of  its  own  agent.  It  held,  however,  that  the 
attorney's  fee,  taxable  as  a  part  of  the  costs  under  sec.  8  of  the 
act,  was  not  collectible  in  this  case  under  this  Carmack  amend- 
ment, since  the  cause  of  action  was  the  loss  of  property  which  was 
in  no  way  traceable  to  the  violation  of  the  provision  of  the  stat- 
ute. 

The  court  in  this  case  assumed  that  the  through  routing  was 
under  a  voluntary  arrangement  made  by  the  carrier  wherewitli 
the  defendant  had  made  its  own  arrangements  and  division  of 
rate;  and  the  court  said  that  was  the  presumption  in  tlie  absence 
of  anything  in  the  record  to  show  a  different  arrangement.  The 
court,  therefore,  did  not  pass  upon  the  question  whether  the 
!ia])ility  would  exist  if  the  through  routing  was  compulsory,  that 
is.  forced  upon  the  can  ier  Iiy  the  commi.-sion  under  sec.  15  of  the 


510  THE   INTERSTATE   COMMERCE    ACT.  [SECTION    20 

act.  It  would  seem  at  least  doubtful  whether  this  initial  liabilit.v 
could  be  enforced  in  such  a  case.  As  to  the  effect  of  the  enact- 
ment upon  state  legislation  enacted  during  the  non-action  of  con- 
gress, see  §  35,  supra.  This  is  the  first  legislation  by  congress 
in  the  exercise  of  its  power  in  interstate  and  foreign  commerce 
over  bills  of  lading  other  than  maritime  traffic. 

See  also  opinion  of  liogers,  J.,  in  Smelzer  v.  St.  L.  &  St.  F.  R. 
Co.,  158  Fed.  649,  C.  C.  W.  D.  Ark.  in  1908,  sustaining  this  pro- 
vision. 

§  408.  The  employment  of  special  examiners. — This  provision 
for  tlie  employment  of  special  examiners,  with  power  to  summon 
witnesses  and  receive  evidence,  which  was  fiirst  enacted  in  1906, 
adds  very  materially  to  the  effectiveness  of  the  act,  in  that  it  re- 
lieves the  members  of  the  commission  from  the  necessity  there- 
tofore imposed  of  attendance  in  different  parts  of  the  country 
in  taking  testimony. 

§  409.  The  effectiveness  of  the  publicity  provisions  of  the 
section. — The  enactment  of  this  section  prescribing  the  form  of 
jsecounts  and  records  kept  by  the  carrier,  with  the  right  of  in- 
spection, was  strongly  urged  by  the  commission  in  its  rejiort  for 
the  year  1905,  page  11,  where  it  said  that  probably  no  one  thing 
would  go  further  toward  the  detection  of  rebates  and  Idndred 
wrong-doing.  The  provision  of  the  section  for  a  uniform  system 
of  accounts  for  railroads  and  other  common  carriers,  for  a  board 
of  examiners  of  accounts,  and  for  annual,  monthly  or  special  re- 
ports, has  been  found  most  effective  for  the  end  of  preventing 
illegal  practices  and  of  procuring  the  desired  publicity  in  rail- 
way operations.  The  commission  has  organized  a  bureau  of 
statistics  and  accounts,  which  has  co-operated  with  the  state 
railway  commissioners,  and  also  with  the  carriers,  in  making  a 
uniform  system  of  railway  accounting.  The  commission  in  its 
report  for  1910  has  urged  upon  congress  the  bringing  of  all  water 
line  carriers  doing  an  interstate  business  under  its  jurisdiction, 
so  far,  at  least,  as  the  twentieth  section  of  the  act  is  concerned. 

By  the  act  of  1910,  telegraph  and  telephone  companies  doing 
an  interstate  business  are  placed  under  the  jurisdiction  of  the 
commission.  The  commission  in  its  report  for  1910,  says  that 
steps  have  been  taken  for  the  formulation  of  a  sj^stem  for  oper- 
atinty  and  accounting  for  these  companies,  and  it  is  expected 


§    ^O^J  THE    INTERSTATE    COMMERCE    ACT.  51 1 

that  the  .system  will  become  effective  on  July  ],  101].  With  re- 
j?ard  to  telephone  companies,  the  commission  says  that  there  are 
from  twenty-five  to  thirty  thousand  telephone  companies  which 
make  provision  for  interstate  communication,  and  the  coiruiiission 
is  in  doubt  whether  it  was  the  intent  of  congress  to  place  all  oi" 
these  companies  under  its  supervision  ;iud  control. 


512  THE    INTERSTATE    COMMERCE   ACT,  [SECTION   21 


Section  21. 

§  410.  Section  21  as  amended. 
411.  The  annual  reports  of  the  commission. 

[Auuual  reports  of  the  coinniission  to  congress.] 

§  410.  Section  21  as  amended. — Sec.  21.  (.4s  amended  March 
2,  1889.)  That  the  Commission  shall  on  or  before  the  first  day 
of  December  in  each  year,  make  a  report,  which  shall  be  trans- 
mitted to  Congress,  and  copies  of  which  shall  be  distributed  as 
are  the  other  reports  transmitted  to  Congress.  This  report  shall 
contain  such  information  and  data  collected  by  the  Commission 
as  may  be  considered  of  value  in  the  determination  of  questions 
connected  with  the  regulation  of  commerce,  together  with  such 
recommendations,  as  to  additional  legislation  relating  thereto  as 
the  Commission  may  deem  necessary ;  and  the  names  and  compen- 
sation of  the  persons  employed  by  said  Commission. 

§  411.  The  annual  reports  of  the  commission. — The  annual 
reports  of  tlie  commission  published  by  the  Government  Printing 
Office  have  been  regularly  issued  since  the  organization  of  the 
commission  and  are  now  (1911)  24  in  number.  The  reports  con- 
tain a  discussion  of  the  work  of  the  commission  during  the  year 
with  recommendations  for  further  legislation;  a  full  report  of 
decisions  during  the  year  and  of  pending  litigation  both  civil 
and  criminal  in  the  enforcement  of  the  act  to  regulate  commerce. 
A  statement  of  the  clerical  force  and  other  employes  of  the 
commission  several  hundred  in  number  at  an  annual  expense  of 
$1,385,000  during  the  past  year  1910  is  also  included.  The  re- 
ports contain  a  digest  of  reported  cases  during  the  year,  a  digest 
of  the  court  decisions  relative  to  the  commission  and  to  the  en- 
forcements of  the  act,  and  also  of  cases  in  Interstate  Commerce 
relative  to  matters  arising  before  the  commission.  The  vast 
range  of  the  duties  of  the  commission,  and  their  great  expansion 
under  the  successive  acts  of  congress  are  indicated  in  these  an- 
nual reports. 


§    412J  1111-:    INTERSTATE   COMMERCE    ACT.  513 


Section  22. 

§  412.  Persons  and  property  that  may  be  carried  free  or  at  reduced 
rates,  etc. 

413.  Amendments  to  section. 

414.  The  section  illustrative  and  not  exclusive. 

415.  The  section  permissive  only. 

416.  Withdrawal  of  commutation  tickets. 

417.  The  commission  on  excursion  rates. 

418.  The  jurisdiction  of  the  commission  as  to  commutation  rates. 

§  412.  Persons  and  property  that  may  be  carried  free  or  at 

reduced  rates,  etc.— Sec.  22.  {As  amended  March  2,  1889,  arul- 
Fchrunii  S,  1895.)  [f^ec  section  1,  4th  par.]  That  nothinj?  ir 
this  act  shall  prevent  tlie  earriafre,  storajre,  or  handling  of  prop- 
erty free  or  at  provided  rates  for  the  United  States.^  State,  or 
municipal  governments,  or  for  elun-itable  purposes,  or  to  or  from 
fairs  and  expositions  for  exhibition  thereat,  or  the  free  carriage 
of  destitute  and  homeless  persons  transported  by  charitable  so- 

[Mllease,  excursion,  or  coiumiitation   iinNNeiii^er  tickets.] 

eieties,  and  the  necessary  agents  eiiii)Ioyed  in  such  transporta- 
tion, or  the  issuance  of  mileage,  excursion,  or  commutation  pas- 
senger tickets ;  notliing  in  this  Act  shall  be  construed  to  prohibit 
any  common  carrier  from  giving  reduced  rates  to  ministers  of 
religion,  or  to  municipal  governments  for  the  transportation  of 
indigent  persons,  or  to  inmates  of  the  National  Homes  or  State 
Homes  for  Disabled  Volunteer  Soldiers,  and  of  Soldiers'  and 
Sailors'  Orphan  Homes,  including  those  about  to  enter  and  those 

[Passes  and  free  trnnsiiortation  to  ollioers  aud  employes 
of   railroad   coniitaiiles.] 

returning  home  after  discharge,  under  arrangements  with 
the  boai-ds  of  managers  of  said  homes;  nothing  in  this 
Act  shall  be  construed  to  prevent  railroads  from  giving 
free  carriage  to  their  own  officers  and  employees,  or  to 
prevent  the  principal  officers  of  any  railroad  company  or  com- 
panies from   exchanging  passes  or  tickets  with   other  railroad 

[Provisions  of  act  are  in  addition  to  remedies  existing 
at  common  law.  Pending  IltiKatioii  not  utTeeted  hy 
act.] 

companies  for  their  oflicers  and  employees;  and  notliing  in  this 
Act  contained  shall  in  any  way  abridge  or  alter  the  remedies 
now  existing  at  common  law  or  by  statute,  but  the  provisions  of 
this  Act  ai'c  in  addition  to  such  remedies:  Provided,  That  no 
])ending  litigatioji  shall  in  any  way  be  atTected  by  this  Act:  Pro- 
videel  further.  That  nothing  in  this  Act  shall  prevent  the  issuance 
of  joint  interchangeable  five-thousand-mile  tickets,  with  special 
33 


514  THE   INTERSTATE    COMMERCE   ACT.  [SECTION    22 

[Joint  iiitorohaiiisoalile  five-tboiisnitd-inile  fiokets.  Amount 
of  free  bag;g:ai;c.] 

privileges  as  to  the  amount  of  free  baggage  that  may  be  carried 
under  mileage  tickets  of  one  thousand  or  more  miles.  But  before 
an}^  common  carrier,  subject  to  the  provision  of  this  Act,  shall 
issue  any  such  joint  interchangeable  mileage'tickets  with  special 
privileges,  as  aforesaid,  it  shall  file  with  the  Interstate  Commerce 
Commission  copies  of  the  joint  tariffs  of  rates,  fares,  or  charges 
on  which  such  joint  interchangeable  mileage  tickets  are  to  be 
based,  together  with  specifications  of  the  amount  of  free  baggage 
permitted  to  be  carried  under  such  tickets,  in  the  same  manner  as 
common  carriers  are  required  to  do  with  regard  to  other  joint 

[Publication  of  rates.] 

rates  by  section  six  of  this  Act ;  and  all  the  provisions  of  the  said 
section  six  relating  to  joint  rates,  fares,  and  charges  shall  be  ob- 
served by  said  common  carriers  and  enforced  by  the  Interstate 
Commerce  Commission  as  fully  with  regard  to  such  joint  inter- 
changeable mileage  tickets  as  with  regard  to  other  joint  rates, 
fares,  and  charges  referred  to  in  said  section  six.  It  shall  be  un- 
lawful for  any  common  carrier  that  has  issued  or  authorized  to 

[Sale  of  tickets.] 

be  issued  any  such  joint  interchangeable  mileage  tickets  to  de- 
mand, collect,  or  receive  from  any  person  or  persons  a  greater  or 
less  compensation  for  transportation  of  persons  or  baggag§  under 
such  joint  interchangeable  mileage  tickets  than  that  required  by 

[Penalties.] 

the  rate,  fare,  or  charge  specified  in  the  copies  of  the  joint  tariff 
of  rates,  fares,  or  charges  filed  with  the  Commission  in  force  at 
the  time.  The  provisions  of  section  ten  of  this  Act  shall  apply 
to  any  violation  of  the  requirements  of  this  proviso. 

§  413  (304).  Amendments  to  section. — The  amendment  of 
March  2,  1889,  incorporated  in  the  Act  to  Regulate  Commerce,  a 
provision  as  follows : 

"Nothing  in  this  act  contained  shall  in  any  way  abridge  or 
alter  the  remedies  now  existing  at  common  law,  or  by  statute, 
but  the  provisions  of  this  act  are  in  addition  to  such  remedies." 

Notwithstanding  the  collocation  of  this  provision  in  the  twenty- 
second  section,  it  clearly  is  to  be  construed  with  all  of  these  sec- 
tions, and  relates  to  all  the  remedies  provided  by  the  act  and  has 
been  so  construed  by  the  courts.    See  section  8  of  act,  supra. 

The  amendment  of  3895  incorporated  a  second  proviso  con- 
cerning the  issuance  of  joint  interchangeable  five  thousand  mile 
tickets. 

'This  section  in  its  regulation  of  passes  and  free  transportation, 


§    414]  THE    INTERSTATE    COMMERCE    ACT.  515 

must  be  coiistruod  with  the  very  comprehensive  regulation  of  the 
same  subject  in  section  1,  see  supra. 

§  414  (305) .  The  section  illustrative  and  not  exclusive. — This 
section  was  construed  in  the  Party  Rate  Case,  §  201  (siipra), 
where  the  court  said,  that  the  provision  that  the  dis- 
criminations in  favor  of  certain  persons  therein  named  shall  not 
be  deemed  unjust,  did  not  forbid  discriminations  in  favor  of 
others  under  circumstances  and  conditions  so  substantially  alike 
as  to  justify  the  same  treatment.  The  object  of  section  22  was  to 
settle  beyond  all  doubt  that  discriminations  in  favor  of  certain 
persons  therein  named  sliould  not  be  deemed  unjust,  and  the  sec- 
tion was  rather  illustrative  than  exclusive.  The  court  said  that 
many,  if  not  all,  of  the  excepted  classes  named  in  section  22.  are  ^ 
those  which  in  the  absence  of  the  section  would  not  necessarily 
be  held  the  subjects  of  an  unjust  discrimination,  if  more  favorable 
terms  were  extended  to  them  than  to  ordinary  passengers. 

In  Ex  parte  Koehler,  31  Fed.  315  (1887),  it  was  ruled  by  the 
circuit  court  under  this  section,  that  the  exception  allowed  for 
the  issuance  of  passes  in  favor  of  officers  and  employees,  did  not 
include  the  families  of  such  persons,  such  preferences  being  for- 
bidden by  section  2  of  the  act. 

In  U.  S.  V.  Chicago  &  N.  W.  Ry.,  127  Fed.  785  (1904),  it  was 
ruled  by  the  circuit  court  of  appeals  of  the  seventh  circuit,  that 
the  government  of  the  United  States  in  buying  transportation  of 
a  railroad  for  its  soldiers  in  lots  of  ten  or  more,  was  not  entitled 
to  the  benefit  of  the  reduced  ten  party  rate  given  b}^  the  com- 
pany's schedule  to  theatrical,  operatic  or  concert  companies, 
hunting  and  fishing  parties,  glee  clubs,  brass  or  string  bands 
and  other  parties  of  like  character.  The  court  said  that  the  re- 
fusal to  give  the  same  rates  did  not  constitute  an  unjust  discrim- 
ination. These  rates  v.'cre  for  tickets  closely  limited  in  time  and 
paid  for  in  cash  in  advance,  wliile  those  furnished  the  govern- 
ment were  furnished  on  requisitions  and  paid  after  a  delayed 
auditing ;  that  the  tickets  of  other  classes  increased  the  company's 
business,  while  the  carrying  of  soldiers  for  the  government  did 
not.  So  that  the  conditions  were  essentially  different  under  sec- 
tion 2. 

In  American  Express  Company  v.  United  States,  supra,  §  138, 
the  supreme  court  affirmed  the  judgment  of  the  circuit  court, 


516  THE   INTERSTATE    COMMERCE   ACT.  [SECTION    22 

northern  district  of  Illinois,  in  enjoining  the  express  companies, 
from  giving  free  transportation  of  personal  packages  to  the 
officers,  employes  and  members  of  their  families,  and  to  officers 
of  other  companies  and  to  members  of  their  families,  in  exchange 
for  passes  issued  by  the  latter  to  the  officers  of  the  express  com- 
panies, affirming  161  Fed.  Rep.  606.  That  although  express 
companies  were  termed  common  carriers,  they  were  not  included 
in  the  proviso  of  section  1  as  amended  in  1906. 

§  415  (306).  The  section  permissive  only. — This  section  is 
permissive  only  and  imposes  no  restriction  upon  the  carrier  as  to 
the  issuance  of  such  tickets.  Congress  intended  by  this  pro- 
vision to  leave  the  issuance  of  such  tickets  free  from  restric- 
tion. There  is  no  discrimination  therefore  in  issuing  them  on 
one  occasion  and  not  issuing  them  on  another.  6  I.  C.  C.  R.  113. 
When  they  are  issued  however  whatever  the  occasion,  they  must 
be  offered  impartially  to  all  who  accept  the  conditions  on  w^hich 
they  are  issued,  and  the  rates  at  which  they  are  sold  must  be  pub- 
lished. The  general  requirements  of  the  act  to  regulate  commerce 
are  as  applicable  to  these  classes  of  tickets  as  to  any  others.  2  I. 
C.  C.  R.  1649.  2  Int.  Com.  Rep.  340.  In  the  latter  case  the  com- 
mission recommended  the  amendment  of  the  act  so  as  to  define 
what  should  be  considered  excursion  and  commutation  tickets 
and  restrict  their  issue  in  intei-state  commerce  so  as  to  prevent 
the  abuses  pointed  out  in  the  opinion. 

§  416  (307).  Withdrav^^al  of  commutation  tickets. — ^Under 
this  section  carriers  are  allowed  to  issue  mileage  and  commutation 
as  well  as  excursion  tickets,  but  they  cannot  be  compelled  to  do 
so.  As  it  is  their  discretion  when  they  shall  issue  such  tickets, 
it  is  equally  within  their  discretion  when  to  withdraw  them.  It 
was  suggested  in  8  I.  C.  C.  R.  443,  whether  the  allowance  of 
commutation  rates  at  stations  on  one  line  of  a  railroad  system 
and  the  denial  of  such  rates  on  another  line  of  the  same  system, 
such  stations  being  respectively  of  the  same  character,  would 
be  an  undue  preference  or  not,  but  the  question  was  not 
involved  in  the  case  for  decision.  The  commission  in  this  case, 
cited  the  opinion  of  the  supreme  court  in  Lake  Shore  &  M.  S.  R. 
Co.  V.  Smith.  173  U.  S.  684,  43  L.  Ed.  858  (]899),  where  the  su- 
preme court  held  that  the  power  of  the  legislature  to  enact  general 
laws  regarding  the  company  and  its  affairs  did  not  include  the 


§    417]  TJIE    INTERSTATE    COMMERCE    ACT.  .")  1  < 

power  to  eoini)e]  it  to  make  an  ex('ei)tion  in  favor  of  some  particu- 
lar class  or  coiiuiiuiiity  and  to  carry  the  nienibeis  of  tliat  class  at  a 
less  sum  than  it  has  the  rij^ht  to  charge  those  who  were  not  for- 
tunate enoutrh  to  be  members  thereof.  The  commission  said  in 
this  case  that  commutation  tickets  are  extensively  used  and  have 
become  a  recognized  feature  of  suburban  transportation,  and  that 
they  w^ere  far  from  saying  that  a  carrier  who  has  established 
commutation  rates  for  suburban  service,  especially  when  resi- 
dences have  been  fixed  and  business  interests  adjusted  in  reliance 
upon  their  continuance,  could  suddenly  or  otherwise  withdraw 
those  rates  and  exact  from  its  patrons  the  full  rates  charged  to 
the  occasional  traveler.  It  was  ruled  in  the  case  however  that  the 
action  of  the  railroads  in  withdrawing  the  380-trip  quarterly 
tickets  between  Baltimore  and  AVashington  was  within  the  limits 
of  their  discretion  and  did  not  constitute  a  violation  of  the  act. 

As  to  thousand  mile  tickets,  see  1  I.  C.  C.  R.  156,  1  Int.  Com. 
Rep.  393.  As  to  mileage  tickets,  see  1 1.  C.  C.  R.  147,  1  Int.  Com. 
Rep.  360. 

Indian  Supplies. — "When  under  the  statute  the  Government 
contracts  for  the  delivery  of  the  supplies  needed  for  the  Indian 
service,  at  New  York  and  other  points  designated,  and  then  ad- 
vertises for  bids  for  the  transportation  of  the  supplies  from  the 
points  of  delivery  to  the  points  where  they  are  to  be  made  use  of, 
this  transportation  at  the  cost  of  the  government  is  "for  the 
United  States"  within  the  meaning  of  section  22  of  the  act  to 
regulate  commerce,  and  is  not  required  to  be  made  at  the  regular 
published  rates.    See  I.  C.  C.  R.  15,  1  Int.  Com.  Rep.  22. 

§  417.  The  commission  on  excursion  rates. — In  17  I.  C.  C.  R. 
212,  the  commission  discussed  the  subject  of  excursion  rates  in  a 
case  wherein  the  citizens  of  Ogden  complained  that  the  semi- 
annual excursion  rates  of  the  Oregon  Short  Line  Railroad  Com- 
pany discriminated  in  favor  of  Salt  Lake  City  and  against  Ogden. 
The  railroad  contended  that  excursion  rates  were  entirely  ex- 
empted from  the  operation  of  the  act  regulating  commerce  or. 
at  least,  as  to  the  provisions  relating  to  discrimination.  The  com- 
mission says  that  the  inference  from  the  decisions  was  that  the 
carrier  could  determine  for  itself  whether  it  would  sell  commu- 
tation, mileage,  or  excursion  tickets,  but  that  if  it  elected  to  sell 
them  it  must  do  so  subject  to  the  provisions  of  the  act.  It  was 
not  prepared  to  admit  that  under  no  circumstances  could  the 


518  THE   INTERSTATE    COMMERCE    ACT.  [SECTION    22 

commission  inquire  whether  undue  disciimination  had  arisen 
from  the  issuance  of  such  statements ;  but  as  the  statute  author- 
ized discrimination  in  the  issuance  of  the  tickets  the  commission 
would  only  be  justified  in  interfering  where  the  privilege  was 
plainly  abused.  The  commission  suggested  that  the  railroad 
company  should  make  a  uniform  passenger  rate  at  one  and  one- 
half  cents  per  mile  each  way  to  all  state  and  county  fairs,  and 
not  limit  them  to  the  Mormon  conference  gathering;  but  it  said 
that  that  was  a  matter  upon  which  it  had  no  authority  to  make 
any  requirement. 

§  418.  The  jurisdiction  of  the  commission  as  to  commutation 
rates. — In  a  recent  hearing  before  the  commission  known  as  the 
Commutation  Rate  case,  21 1.  C.  C.  R.  428,  decided  June  21,  1911. 
it  was  claimed  that  the  commission  had  no  jurisdiction  over  com- 
mutation fares.  It  seems  that  this  section  as  originally  enacted 
contained  the  provision,  "That  nothing  in  this  act  shall  apply  to 
*  *  *  the  issuance  of  mileage,  excursion  or  commutation  pas- 
senger tickets."  This  was  amended  in  March,  ISSD  so  as  to  read, 
"That  nothing  in  the  act  shall  prevent,  etc.,  *  *  *  the  issuance 
of  mileage,  excursion  or  commutation  tickets". ' '  The  commission 
came  to  the  conclusion  that  reading  section  22  in  the  light  of  the 
special  nature  and  character  of  commutation  traffic  and  service, 
the  utmost  that  reasonably  may  be  said  of  it,  as  applied  to  com- 
mutation tickets  is  that  it  constitutes  a  statutory  recognition  of 
the  fact  that  commutation  is  a  different  kind  of  traffic,  and,  there- 
fore, is  not  to  be  compared  with  any  other  kind  of  passenger 
traffic.  The  commission  calls  attention  to  the  fact  that  commuters 
in  many  cases  make  their  homes  separate  from  their  places  of 
business  in  reliance  upon  the  commutation  services.  The  car- 
riage of  a  commuter,  therefore,  differs  in  many  respects  from 
other  passenger  traffic  and  is^  an  independent  and  a  special  ser- 
vice and  a  special  kind  of  traffic.  The  commission,  therefore  came 
to  the  conclusion  that  they  had  the  right  to  examine  into  the  rea- 
sonableness of  commutation  services  under  section  1.  See  supra, 
§  181. 


§    420J  THE    INTERSTATE    COMMERCE    ACT.  519 


Section  23. 

§  419.  Jurisdiction  of  United  States  courts  to  issue  writs  of  mandamus. 

420.  Application  of  section  to  car  shortage. 

421.  Commission  to  consist  of  seven  members;   terms;    salaries. 

[Juriddlction    of    United    StatcN    coiirtn  to    iHnae    -writs    of 

pereiiiptory    niandantiiN    coiiiinniidiiiK  the    nioveineiit   of 

Interstate    tratlic    or    the    fiiriiishiii};  of    earn    or    other 
triiii.s|iortntIon  fncilities.] 

§  419  (308).  Jurisdiction  of  United  States  courts  to  issue 
writs  of  mandamus.— Sec.  23.  (Added  March  2,  1889.)  That 
the  circuit  and  district  courts  of  the  United  States  shall  have 
jurisdiction  upon  the  relation  of  any  person  or  persons,  firm,  or 
corporation,  alleging  such  violation  by  a  common  carrier,  of  any 
of  the  provisions  of  the  Act  to  which  this  is  a  supplement  and  all 
Acts  amendatory  thereof,  as  prevents  the  relator  from  having: 
interstate  traffic  moved  by  said  common  carrier  at  the  same  rates 
as  are  charged,  or  upon  terms  or  conditions  as  favorable  as  those 
given  by  said  common  carrier  for  like  traffic  under  similar  con- 
ditions to  any  other  shipper,  to  issue  a  writ  or  writs  of  mandamus 
against  said  common  carrier,  commanding  such  common  carrier 
to  move  and  transport  the  traffic,  or  to  furnish  cars  or  other  fa- 
cilities for  transportation  for  the  party  applying  for  the  writ: 

[Peremptory     niandnniiis      may     issue,     notvrithstandins 
proper  compensatiou  of  carrier  may  be  undetermined.] 

Provided,  That  if  any  question  of  fact  as  to  the  proper  compen- 
sation to  the  common  carrier  for  the  service  to  be  enforced  by 
the  writ  is  raised  by  the  pleadings,  the  writ  of  peremptory  man- 
damus may  issue  notwithstanding  such  question  of  fact  is  unde- 
termined, upon  such  terms  as  to  security,  payment  of  money  into 
the  court,  or  otherwise,  as  the  court  may  think  proper,  pending 

[Remedy  cumulative,  and  sliall  not  interfere  with  other 
remedies  provided  by  the  act.] 

the  determination  of  the  question  of  fact:  Provided,  That  the 
remedy  hereby  given  by  writ  of  mandamus  shall  be  cumulative, 
and  shall  not  be  held  to  exclude  or  interfere  with  other  remedies 
provided  by  this  Act  or  the  Act  to  which  it  is  a  supplement. 

§  420  (309).  Application  of  section  to  car  shortage. — This 
section  was  not  a  part  of  the  original  act,  but  was  first  enacted 
in  the  amendatory  act  of  ]\Iarch  2,  1889.  It  deals  wholly  with 
the  remedial  process  of  mandamus.  The  remedy  was  unsuccess- 
fully invoked  in  a  number  of  cases  in  the  courts  in  which  an  ef- 
fort was  made  to  enforce  through  routing;  see  "Interchange  of 
Facilities,"  supra.  §  278.     The  difficulty  in  these  cases  was  not 


520  THE   INTERSTATE    COMMERCE   ACT,  [SECTION    23 

in  the  remedy,  but  watli  the  right.  The  section,  however,  was 
successfully  invoked  in  a  case  involving  alleged  discrimination  in 
the  supply  of  cars,  see  United  States  v.  Norfolk  &  Western  R. 
Co.,  109  Fed.  831 ;  United  States  v.  AVest  Virginia  &  N.  R.  Co., 
105  Fed.  252;  United  States  v.  Del.  &  W.  R.  Co.,  40  Fed.  101. 
See  supra,  "I'njust  preference  in  car  service,"  §  250.  See  also 
West  Virginia  v.  R.  Co.,  134  Fed.  198,  C.  C.  A.  fourth  circuit,  and 
affirming  125  Fed.  252.  In  this  case,  the  court  held  that  the  cir- 
cuit court  had  the  power  in  a  proceeding  of  this  character  to 
fix  the  percentage  of  cars  the  relator  should  have  in  times  of 
shortage. 

See  also  same  court  in  U.  S.  ex  rel.  v.  Norfolk  &  Western  R.  R. 
Co.,  143  Fed.  266  (1906),  reversing  138  Fed.  849,  and  in  Mer- 
chants Coal  Co.v.    Fairmont  Coal  Co.,  169  Fed.  769  (1908). 

In  B.  &  0.  R.  Co.  V.  United  States  ex  rel.,  215  U.  S.  481,  54  L. 
Ed.  292,  in  1909,  the  supreme  court,  in  reversing  the  circuit  court 
of  appeals  to  the  fourth  circuit,  165  Fed.  Rep.  113,  which  had 
awarded  mandamus  to  compel  equitable  distril)ution,  held  that 
^  mandamus  was  no  longer  the  proper  remedy,  though  the  statute 
had  been  specifically  enacted  for  that  purpose,  in  view  of  the 
very  comprehensive  amendments  to  the  act  enlarging  the  powers 
of  the  Interstate  Commerce  Commission,  and  that  one  of  the  pur- 
poses of  these  amendments  was  to  cure  the  presumed  remedial 
inefficiency  of  the  act,  to  supply  efficient  means  for  giving  effect 
to  the  orders  of  the  commission.  The  alleged  discriminating 
practices  in  the  distribution  of  cars  in  times  of  shortage,  was 
within  the  peculiar  jurisdiction  of  the  commission  for  investiga- 
tion. The  proper  procedure,  therefore,  was  to  make  complaint 
to  and  demand  investigation  through  the  commission.  This  de- 
cision overruled  several  decisions  in  the  court  of  appeals,  and 
circuit  courts  taking  a  contrary  view. 

§  421.  Commission  to  consist  of  seven  members;  terms;  sala- 
ries.—Sec.  24.  (Added  June  29,  1006.)  That  the  Interstate 
Commerce  Commission  is  hereby  enlarged  so  as  to  consist  of 
seven  members  with  terms  of  seven  years,  and  each  shall  receive 

[Qualifications  and   oulari^ement   of  commission.] 

ten  thousand  dollars  compensation  annually.  The  qualifications 
of  the  Commissioners  and  tlie  manner  of  the  payment  of  their 
salaries  shall  be  as  already  provided  by  law.  Such  enlargement 
of  the  Commission  shall  be  accomplished  through  appointment  by 
the  President,  by  and  with  the  advice  and  consent  of  the  Senate, 


§    421]  THE    INTERSTATE    COMMERCE    ACT,  521 

of  two  additional  Interstate  Commerce  Commis.sionors,  one  for  a 
term  exi)irinf?  Deoember  thirty-first,  nineteen  hundred  and 
eleven,  one  for  a  term  expirinpr  December  thirty-first,  nineteen 
hundred  and  twelve.  The  terms  of  the  present  Commissioners, 
or  of  any  successor  appointed  to  fill  a  vacancy  caused  by  the  death 
or  resignation  of  any  of  the  present  Commissioners,  shall  expire 
as  heretofore  provided  by  law.  Their  successors  and  the  suc- 
cessors of  the  additional  Commissioners  herein  provided  for  shall 
be  appointed  for  the  full  term  of  seven  years,  except  that  any 
person  appointed  to  fill  a  vacancy  shall  be  appointed  only  for  the 
unexpired  term  of  the  Commissioner  whom  he  shall  succeed.  Not 
more  than  four  Commissioners  shall  be  appointed  from  the  same 
political  i)arty. 

IKxIstlnp:  laws  n.s  to  ntteiulnnoe  of  witii<>sMCN  mid  pro- 
duction of  evidence  aiiitlicnble  in  prucecdinKJH  under 
this  act.] 

{Additional  provisions  in  Act  of  June  29,  1906.)  (Sec.  9.) 
That  all  existing  laws  relating  to  the  attendance  of  witnesses  and 
the  production  of  evidence  and  the  compelling  of  testimony  under 
the  Act  to  regulate  commerce  and  all  Acts  amendatory  thereof 
shall  apply  to  anv  and  all  proceedings  and  hearings  under  this 
Act. 

[Conflictine  Inivs  repealed.] 

(Sec.  10.)      That  all  laws  and  parts  of  laws  in  conflict  with 

rAniondment.s  not  to  allect  pending  causes  In  court.] 

the  provisions  of  this  Act  are  hereby  repealed;  but  the  amend- 
ments herein  provided  for  shall  not  affect  causes  now  pending  in 
courts  of  the  United  States,  but  such  causes  shall  be  prosecuted 
to  a  conclusion  in  the  manner  heretofore  provided  by  law. 

[\Vhen  act  elTectlve.] 

(See.  11.)  That  this  Act  shall  take  effect  and  be  in  force  from 
and  after  its  passage. 

[Time  of  taking  effect  extended  GO  days  (August  28, 
1906).] 

Joint  resolution  of  June  30,  1906,  provides:  "That  the  Act 
entitled  'An  Act  to  amend  an  Act  entitled  "An  Act  to  regulate 
commerce."  approved  February  4,  1887,  and  all  Acts  amendatory 
thereof,  and  to  enlarge  the  powers  of  the  Interstate  Commerce 
Commission,'  shall  take  effect  and  be  in  force  sixty  days  after  its 
approval  by  the  President  of  the  United  States." 

[When  act  effective.] 

(Sec.  18  of  Act  of  June  18,  1910.)  That  this  act  shall  take 
effect  and  be  in  force  from  and  after  the  expiration  of  sixty  days 
after  its  passage,  except  as  to  sections  twelve  [sec.  15  of  Act  to 
regulate  commerce,  p.  23  herein]  and  sixteen  [sec.  16  of  Com- 
merce Court  Act,  p.  17  herein],  which  sections  shall  take  effect 
and  be  in  force  immediately. 


THE  ELKINS'  ACT. 

§  422.  The  Elkins  Act  as  amended. 

423.  The  enactment  and  amendments  to  the  act 

424.  The  repealing  clause  of  the  Hepburn  Act  did  not  bar  prior  of 

fenses. 

425.  The  validity  and  enforcibility  of  the  act. 

426.  Participation  in  the  joint  rate. 

427.  The  unit  of  offenses   under   the   act.     The   Standard   Oil   Com 

pany  of  Indiana  case. 

428.  Prior  contracts  and  want  of  criminal  intent  no  defenses. 

429.  Conspiracy  in  rebating. 

430.  What  are  rebates. 

431.  Requisites  of  indictment  under  the  act. 

§  422.  The  Elkins  Act  as  amended. 

AN   ACT   To   further    regulate    commerce   with    foreign    nations    and 
among  the  States. 

Be  it  enacted  hy  the  Senate  and  House  of  Representatives  of 
the  United  States  of  America  in  Congress  assemUed,  See.  1.     (As 

[Carrier    corporation    as    well    as    officer    or    agent    liable 
to   conviction   for   niis«lcnieanor.] 

amended  June  29,  1.906.)  That  anything  done  or  omitted  to  be 
done  by  a  corporation  common  carrier,  subject  to  the  Act  to  regu- 
late commerce  and  the  Acts  amendatory  thereof,  which,  if  done 
or  omitted  to  be  done  by  any  director  or  officer  thereof,  or  any 
receiver,  trustee,  lessee,  agent,  or  person  acting  for  or  employed 
by  such  corporation,  would  constitute  a  misdemeanor  under  said 
Acts  or  under  this  Act,  shall  also  be  held  to  be  a  misdemeanor 
committed  by  such  corporation,  and  upon  conviction  thereof  it 

[Penalty.] 

shall  be  subject  to  like  penalties  as  are  prescribed  in  said  Acts 
or  by  this  Act  with  reference  to  such  persons,  except  as 
such    penalties    are    herein    charged.       The    willfull    failure 

[Failure  of  carrier  to  publish  rates  or  observe  tariflfs  a 
misdenicauor.] 

upon  the  part  of  the  carrier  subject  to  said  Acts  to  file 
and  publish  the  tariffs  or  rates  and  charges  as  required  by 
said  Acts,  or  strictly  to  observe  such  tariffs  until  changed  accord- 
ing to  law,  shall  be  a  misdemeanor,  and  upon  conviction  thereof 

[Penalty,  fine.] 

the  corporation  offending  shall  be  subject  to  a  fine  of  not  less 
than  one  thousand  dollars  nor  more  than  twenty  thousand  dol- 
lars for  each  offense;  and  it  shall  be  unlawful  for  any  person, 
persons,  or  corporation  to  offer,  grant,  or  give,  or  to  solicit,  accept 

[5221 


§   422]  THE   ELKIXS'   ACT.  523 

[MlNiIeiiiPnnor  to  oflTt-r,  jsrnii<,  kUo,  Niilicit,  noccpt,  or  re- 
ceive tiny  rebate  from  i>iil)lisli«Ml  ralcN  or  o(Ii<t  eou- 
ceHMion  or  <liNcriiiiIii»tioii.| 

or  receive  any  rebate,  concession,  or  discrimination  in  respect  to 
the  transportation  of  any  property  in  interstate  or  foreign  com- 
merce by  any  common  carrier  subject  to  said  Act  to  regulate 
commerce  and  the  Acts  amendatory  thereof  whereby  any  such 
property  shall  by  any  device  whatever  be  transported  at  a  less 
rate  than  that  named  in  the  tariffs  published  and  filed  by  such 
carrier,  as  is  required  by  said  Act  to  ref^ilate  commerce  and  the 
Acts  amendatory  thereof,  or  whereby  any  other  advantage  is 
given  or  discrimination  is  practiced.  Every  person  or  corpora- 
tion, whether  carrier  or  shipper,  who  shall,  knowingly,  offer, 
grant,  or  give,  or  solicit,  accept,  or  receive  any  such  rebates,  con- 
cession, or  discrimination  shall  be  deemed  guilty  of  a  misde- 

[Penalty,  fliic  or  impriNonment,  or  both.] 

meanor,  and  on  conviction  tliereof  shall  be  punished  by  a  fine  of 
not  less  than  one  thousand  dollars  nor  more  than  twenty  thous- 
and dollars :  Provided,  That  any  person,  or  any  officer  or  director 
of  any  corporation  subject  to  the  provisions  of  this  Act,  or  the 
Act  to  regulate  commerce  and  the  Acts  amendatory  thereof,  or 
any  receiver,  trustee,  lessee,  agent,  or  person  acting  for  or  em- 
ployed by  any  such  corporation,  who  shall  be  convicted  as  afore- 
said, shall,  in  addition  to  the  fine  herein  provided  for.  be  liable 
to  imprisonment  in  the  penitentiary  for  a  term  of  not  exceedin'j; 
two  years,  or  both  such  fine  and  imprisonment,  in  the  discretion 
of  the  court.  Every  violation  of  this  section  shall  be  prosecuted 

[Judicial  district  In  Tvhieli  cases  may  be  pro.seeuted.] 

in  any  court  of  the  United  States  having  jurisdiction  of  crimes 
within  the  district  in  which  such  violation  was  committed,  or 
through  which  the  transportation  may  have  been  conducted ;  and 
whenever  the  offense  is  begun  in  one  jurisdiction  and  completed 
in  another  it  may  be  dealt  with,  inquired  of,  tried,  determined, 
and  punished  in  either  jurisdiction  in  the  same  manner  as  if  the 
offense  had  been  actually  and  wholly  committed  therein. 

[Act  of  olKccr  or  ajjent  to  be  also  deemed  act  of  earrler.l 

In  construing  and  enforcing  the  provisions  of  this  section, 
the  act,  omission,  or  failure  of  any  officer,  agent,  or  other  person 
acting  for  or  employed  by  any  common  carrier,  or  shipper,  act- 
ing within  the  scope  of  his  emploj'ment,  shall  in  every  case  be 
also  deemed  to  be  the  act.  omission,  or  failure  of  such  carrier  or 
shipper  as  well  as  that  of  the  person.     Wlienever  any  carrier 

[Rates  filed  or  participated  In  by  carrier  shall,  as  against 
such  carrier,  be  deemed   legal  rate.] 

files  with  the  Interstate  Conunerce  Tommission  or  publishes  n 
particular  rate  under  the  provisions  of  the  Act  to  regulate  com- 
merce or  Acts  amendatory  thereof,  or  participates  in  any  rates 
so  filed  or  published,  tb.at  rate  as  against  sui-h  carrier,  its  officers 
or  agents,  in  any  prosecution  begun  under  this  Act  shall  be  con- 


524  THE    ELKINS'    ACT.  [§    422 

oliisivcly  deemed  to  be  the  legal  rate,  and  any  departure  from 
snch  rate,  or  any  offer  to  depart  therefrom,  shall  be  deemed  to 
be  an  offense  under  this  section  of  this  Act. 

Any  person,  corporation,  or  company  who  shall  deliver  prop- 
erty for  interstate  Transportation  to  any  common  carrier,  sub- 
ject to  the  provisions  of  this  Act,  or  for  whom  as  consignor  or 
consignee,  any  such  carrier  shall  transport  property  from  one 
State,  Territory,  or  the  District  of  Columbia  to  any  other  State, 
Territory,  or  the  District  of  Columbia,  or  foreign  country,  who 
shall  knoA^ingly  by  employee,  agent,  officer,  or  otherwise,  di- 
rectly, or  indirectly,  by  or  through  any  means  or  device  what- 
soever, receive  or  accept  from  such  common  carrier  any  sum  of 
money  or  any  other  valuable  consideration  as  a  rebate  or  offset 

[Forfeiture,  in  addition  to  other  prescribed  penalty,  of 
tliree  times  amount  of  money  and  value  of  eonsidera- 
tion  illessally  received  .sliall  be  paid  to  the  United 
States.] 

against  the  regular  charges  for  transportation  of  such  property, 
as  fixed  by  the  schedules  of  rates  provided  for  in  this  Act.  shall 
in  addition  to  any  penalty  provided  by  this  Act  forfeit  to  the 
United  States  a  sum  of  money  three  times  the  amount  of  money 
so  received  or  accepted  and  three  times  the  value  of  any  other 
consideration  so  received  or  accepted,  to  be  ascertained  by  the 

[Attorney-general  to  collect  such  forfeiture  bj  civil  ac- 
tion.] 

trial  court;  and  the  Attorney-General  of  the  United  States  is 
authorized  and  directed,  whenever  he  has  reasonable  grounds 
to  believe  that  any  such  person,  corporation,  or  company  has 
knowingly  received  or  accepted  from  any  such  common  carrier 
any  sum  of  money  or  other  valuable  consideration  as  a  rebate  or 
offset  as  aforesaid,  to  institute  in  any  court  of  the  United  States 
of  competent  jurisdiction  a  civil  action  to  collect  the  said  sum 
or  sums  so  forfeited  as  aforesaid ;  and  in  the  trial  of  said  action 
all  such  rebates  or  other  considerations  so  received  or  accepted 

[Period  covered  to  be  six  years  prior  to  commencement 
of  action.] 

for  a  period  of  six  years  prior  to  the  commencement  of  the  action 
may  be  included  therein,  and  the  amount  recovered  shall  be 
three  times  the  total  amount  of  money,  or  three  times  the  total 
value  of  such  consideration,  so  received  or  accepted,  or  both,  as 
the  case  may  be. 

[Persons  interested  in  matters  involved  in  cases  before 
Interstate  Commerce  Commission  or  circuit  court  may 
be  made  parties  and  shall  be  subject  to  orders  or  de- 
crees.] 

Sec.  2.  That  in  any  proceeding  for  the  enforcement  of  the 
provisions  of  the  statutes  relating  to  interstate  commerce, 
whether  such  proceedings  be  instituted  before  the  Interstate 
Commerce  Commission  or  be  begun  orisrinally  in  any  circuit 
court  of  the  United  States,  it  shall  be  lawful  to  include  as  par- 


§    422]  TIJE    EI.KINS'    ACT.  525 

ties,  in  addition  to  th(3  carrier,  all  persons  interested  in  or  af- 
fected by  the  rate,  repilation,  or  practice  under  consideration, 
and  inquiries,  investipfiitions,  orders,  and  decrees  may  be  made 
with  reference  to  and  ajxainst  such  additional  parties  in  the 
same  mannei*.  to  the  same;  extent,  and  subject  to  tlie  .same  pro- 
visions as  are  or  shall  be  authorized  by  law  witli  respect  to  car- 
riers. 

IPr«K"«'f«liiiKN  to  enjoin  «)r  r<vs4raiii  ilepartiirfn  fr<ini 
]>ul>liNli<>«l  riites  or  nny  iliNfriniiniilion  iirohiliitrd  liy 
Itiyv   siKiiinNt    onrrierN    iiiiil    iisirtlcN    iiil<TCKti-<l    in    (ruflle.1 

Sec.  3.  That  wluniever  the  Interstate  Couniieree  Commission 
shall  have  reasonable  f^round  for  belief  that  any  common  carrier 
is  engaged  in  the  carriage  of  passengers  or  freight  traffic  be- 
tween given  points  at  less  than  the  published  rates  on  file,  or 
is  connnitting  any  discriminations  forbidden  by  law,  a  petition 
may  be  presented  alleging  such  facts  to  the  circuit  court  of  the 
United  Staters  sitting  in  equity  having  jurisdiction ;  and  when 
the  act  complained  of  is  alleged  to  have  been  connnitted  or  as 
being  committed  in  part  in  more  than  one  judicial  district  or 
State,  it  may  be  dealt  with,  inquired  of.  tried,  and  determined 
in  either  such  judicial  district  or  State,  whereupon  it  shall  be 
the  duty  of  the  court  summarily  to  inquire  into  the  circum- 
stances, upon  such  notice  and  in  such  manner  as  the  coMrt  shall 
direct  and  without  the  formal  pleadings  and  proceedimrs  ap- 
plicable to  ordinary  suits  in  equity,  and  to  make  such  other  per- 
sons or  cori)orations  parties  thereto  as  the  court  may  deem  nec- 
essary, and  upon  being  satisfied  of  the  truth  of  the  allegations 
of  said  i)etition  said  court  shall  enforce  an  observance  of  the 
published  taritifs  or  direct  and  require  a  discontinuance  of  such 
discrimination  by  proper  orders,  writs,  and  process,  which  said 
orders,  writs,  and  process  may  be  enforceable  as  well  against 
the  parties  interested  in  the  traffic  as  against  the  carrier,  sub- 
ject to  the  light  of  ai)peal  as  now  provided  by  law.     It  shall  be 

[Sufh  iiroeeiMlinRs  shall  not  prevent  actions  for  recov- 
ery of  <laniaK;es  or  other  action  antiioriy.c<l  by  act  to 
rCKulatc    commerce   or   amendments    thereof.] 

the  duty  of  the  several  district  attorneys  of  the  United  States, 
whenever  the  Attorney-General  shall  direct,  either  of  his  own 
motion  or  upon  the  request  of  the  Interstate  "Commerce  Com- 
mission, to  institute  and  prosecute  such  proceedings,  and  the 
proceedings  provided  for  by  this  Act  shall  not  preclude  the 
bringing  of  suit  for  the  recovery  of  damages  by  any  party  in- 
jured, or  any  other  action  provided  by  said  Act  approxed  Feb- 
ruary fourtli.  eighteen  hundred  and  eighty-seven,  entitled  "An 
Act  to  regulate  eouunerce"'  and  the  Acts  amendatory  thereof. 

[Conipnlsory  attendance  and  testimony  of  witnesses  and 
pr<idiiction    of   hool^s   and    papers.] 

And  in  the  pi-oeeedings  under  this  Act  and  the  Acts  to  regulate 
commerce  the  said  courts  shall  have  the  power  to  compel  the 


o2t)  THE   ELKINS'    ACT.  [§    422 

attendance  of  witnesses,  both  upon  the  part  of  the  carrier  and 
the  shipper,  who  shall  be  required  to  answer  on  all  subjects  re- 
lating directly  or  indirectly  to  the  matter  in  controversy,  and 
to  compel  the  production  of  all  books  and  papers,  both  of  the 
carrier  and  the  shipper,  which  relate  directly  or  indirectly  to 

[Ininiiinity  to  testify  witnesses.] 

snch  transaction ;  the  claim  that  such  testimony  or  evidence  may 
tend  to  criminate  the  person  giving  such  evidence  shall  not  ex- 
cuse such  person  from  testifying  or  such  corporation  producing 
its  books  and  papers,  but  no  person  shall  be  prosecuted  or  sub- 
jected to  any  penalty  or  forfeiture  for  or  on  account  of  any 
transaction,  matter,  or  thing  concerning  which  he  may  testify 
or  produce  evidence,  documentary  or  otherwise,  in  such  proceed- 

[E^xpeditin?  Act  of  Feb.  11,  1903,  to  apply  in  cases  prose- 
cuted under  direction  of  attorney-general  in  name  of 
Interstate  Commerce  Commission.] 

ing:  Provided,  That  the  provisions  of  an  Act  entitled  "An  Act 
to  expedite  the  hearing  and  determination  of  suits  in  equity 
pending  or  hereafter  brought  under  the  Act  of  July  second, 
eighteen  hundred  and  ninety,  entitled  'An  Act  to  protect  trade 
and  commerce  against  unlawful  restraints  and  monopolies,'  'An 
Act  to  regulate  commerce,'  approved  February  fourth,  eighteen 
hundred  and  eighty-seven,  or  any  other  acts  having  ,a  like  pur- 
pose that  may  be  hereafter  enacted,  approved  February  elev- 
enth, nineteen  hundred  and  three,"  shall  apply  to  any  case  pros- 
ecuted under  the  direction  of  the  Attorney-General  in  the  name 
of  the  Interstate  Commerce  Commission. 

[Conflicting  la^vs  repealed.] 

Sec.  4.  That  all  Acts  and  parts  of  Acts  in  conflict  with  the 
provisions  of  this  Act  are  hereby  repealed,  but  such  repeal  shall 
not  ajffect  causes  now  pending,  nor  rights  which  have  already 
accrued,  but  such  causes  shall  be  prosecuted  to  a  conclusion  and 
such  rights  enforced  in  a  manner  heretofore  provided  by  law 
and  as  modified  by  the  provisions  of  this  Act, 

§  423.  The  enactment  and  amendments  to  the  act. — This  act, 
approved  February  19,  1903,  and  known  as  the  Elkins  Act, 
made  a  very  substantial  amendment  to  the  penal  provisions  of 
section  10,  as  well  as  to  sections  6  and  2  of  the  act.  First,  in 
abolition  of  the  penalty  of  imprisonment,  which  however,  was 
restored  by  the  amendment  of  the  Hepburn  Act  of  1906.  Sec- 
ond, in  making  the  railroad  corporation  itself  liable  to  prosecu- 
tion in  all  cases  where  the  officers  or  agents  were  liable  under 
original  act,  the  officers  and  agents  continuing  to  be  liable  as 
theretofore;  third,  in  making  the  published  tariff  the  standard 
of  lawfulness  and  any  departure  therefrom  declared  to  be  a 


424 J  THE    ELKINS'    ACT.  527 


inisdemeanor ;  fourili,  tlie  jurisdiction  of  prosecutions  of  offenses 
under  this  act  is  given  to  any  court  of  the  United  States  having 
jurisdiction  of  crimes  within  the  district  within  which  the  vio- 
lation was  committed,  or  through  wliicli  tlie  transportation  may 
have  been  conducted ;  and  fifth,  in  construing  and  enforcing  the 
provisions  of  the  act,  the  violation  thereof  by  any  person  acting 
for  or  in  the  employ  of  any  carrier,  acting  within  the  scope  of 
his  employment,  is  in  every  instance  to  be  deemed  the  act  and 
offense  of  such  carrier. 

Under  the  Hepburn  act  of  1906,  this  section  was  amended  so 
as  to  restore  the  penalty  of  imprisonment;  so  now  the  penalties 
of  both  fine  and  imprisonment  are  imposed  on  both  carrier  and 
shipper  and  a  penalty  of  a  three-fold  forfeiture  of  the  amount  of 
rebate  is  superadded  to  the  carrier,  these  changes  made  by  the 
act  of  190G  being  shown  in  the  bracket  insertions. 

It  was  held  in  Illinois  v.  Terminal  R.  Co.  (Dist.  Ct.  of  Illinois, 
1909),  1G8  Fed.  546,  that  under  this  Elkins  Act  the  penalty 
for  failure  on  the  part  of  any  carrier  of  not  publishing  and  filing 
its  rates  is  as  severe  as  the  penalty  for  not  strictly  observing 
such  rates  after  filing,  and  the  defendant  though  operating 
a  terminal  railroad  entirely  within  the  state  was  held  subject  to 
the  act,  as  it  was  engaged  in  interstate  commerce  and  was  con- 
victed of  moving  cars  in  interstate  commerce  where  it  had  not 
filed  its  rates  covering  such  services. 

§  424.  The  repealing  clause  of  the  Hepburn  Act  did  not  bar 
prior  offenses. — The  general  repealing  clause  of  the  act  of  1906, 
"repealing  all  acts  and  parts  of  acts  in  conflict  there^^^th,"  did 
not  release  any  penalty  under  the  then  existing  statute.  Great 
Northern  R.  R.  Co.  v.  United  States,  208  U.  S.  452,  52  L.  Ed.  567 
(1908),  affirming  155  Fed.  945,  and  151  Fed.  84.  See  also  United 
States  V.  N.  Y.  C.  &  H.  R.  R.  Co.,  13  Fed.  630  (W.  D.  of  N.  Y.) 
and  an  indictment  alleging  that  the  carrier  unlawfully  and  will- 
fully gave  rebates,  following  the  language  of  the  original  Elkins 
Act,  was  sufficient,  though  under  the  Hepburn  Act  it  was 
necessary  to  allege  that  the  rebates  were  "given  knowingly." 
United  States  v.  D.  L.  &  W.  R.  R.  Co.  (C.  C.  A.  second  district), 
152  Fed.  269  (1907). 

The  payment  of  a  rebate  after  the  passage  of  the  Elkins 
Act,  paid  upon  shipments  of  property  transported  prior  to  that 
enactment  is  covered  by  the  act.     N.  Y.  C.  &  11.  R.  R.  Co.  v. 


528  THE   ELKINS'    ACT.  [§    425 

United  States,  212  U.  S.  500,  53  L.  Ed.  624  (1909),  affirming  146 
Fed.  298. 

§  425.  The  validity  and  enforcibility  of  the  act. — The  sixth 
amendment  to  the  constitution  is  not  viohited  by  the  provision 
of  the  act  whereunder  the  offense  of  obtaining  an  interstate 
transportation  of  goods  at  less  than  the  carrier's  published  rate 
may  be  tried  in  am^  Federal  District  through  which  the  trans- 
portation was  conducted.  Armour  Packing  Co.  v.  United  States, 
209  U.  S.  56,  52  L.  Ed.  681  (1908),  affirming  153  Fed.  1.  The  tak- 
ing of  a  rebate  is  a  continuing  crime  which  may  run  through  sev- 
eral jurisdictions.  In  this  case  the  carrier  obtained  a  through  bill 
of  lading  from  Kansas  City  to  Christiana,  Norway.  The  offense 
was  held  properly  prosecuted  in  the  western  district  of  Missouri 
through  the  actual  shipment  and  contract  was  made  in  Kansas 
City,  Kansas. 

Neither  is  due  process  of  law  violated  by  the  provision  of  the  act 
whereunder  the  commission  by  corporate  officers  acting  within 
the  scope  of  their  employment  of  criminal  violation  of  the  act  is 
imputed  to  the  corporation,  the  court  saying  that  if  the  position 
invalidated  such  a  provision  as  to  individual  carriers,  if  there 
were  such,  it  did  not  affect  the  validity  of  the  act  as  to  corporate 
carriers,  and  that  both  the  corporation  and  its  agents  may  be 
joined  in  one  indictment.  N.  Y.  C.  &  H.  R.  R.  Co.  v.  United 
States,  212  U.  S.  481,  53  L.  Ed.  613  (1908),  affirming  146  Fed. 
298.  And  in  the  Armour  Packing  case  it  was  also  held  that  it 
was  immaterial  that  the  shipment  was  under  a  through  bill  of 
lading  to  a  foreign  port,  and  that  the  act  was  not  violative  of 
the  Constitution  forbidding  the  levying  of  export  taxes,  nor  did 
it  give  preference  to  the  ports  of  one  State  over  another. 

§  426.  Participation  in  a  joint  rate. — A  carrier  is  bound  by  a 
published  rate  in  which  it  participates,  though  it  was  filed  bj^ 
the  initial  carrier.  The  supreme  court  said  that  this  distinction 
was  immaterial  in  viev/  of  the  concluding  part  of  sec.  1,  which 
was  evidently  enacted  with  the  view  to  meet  the  various  situa- 
tions developed  wherein  a  joint  rate  was  established  binding  up 
all  who  are  parties  and  filed  by  one  of  the  participating  car- 
riers. U.  S.  V.  N.  Y.  C.  &  H.  R.  R.  Co.,  212  U.  S.  509,  53 
L.  Ed.  629  (1909),  reversing  157  Fed.  209;  U.  S.  v.  N.  Y.  C.  & 
H.  R.  R.  Co.,  212  U.  S.  509,  reversing  157  Fed.  293. 


§    427 j  THE    ELKINS'    ACT.  529 

Where  there  is  no  joint  rate  over  the  connecting  lines  pub- 
lished and  filed,  the  lawful  rate  to  charge  is  the  sum  of  the  local 
rates;  and  where  there  are  joint  rates  filed  and  several  local 
rates,  the  lawful  rate  is  the  sum  of  the  joint  rate  filed  plus  the 
Jocal  rates.  C.  B.  &  Q.  R.  Co.  v.  United  States,  157  Fed.  830  (C. 
C.  A.  of  eighth  circuit  (1907).  It  was  held  in  this  case  that  no 
formal  contract  was  necessary  to  bring  the  carrier  within  the 
provisions  of  the  law,  and  that  the  acceptance  by  the  initial 
carrier  of  a  through  shipment  at  less  than  the  lawful  rates  is 
not  made  lawful  by  the  fact  that  such  carrier  had  a  contract 
with  a  connecting  carrier  whose  line  formed  a  part  of  the  through 
route ;  and  that  the  latter  would  not  increase  this  rate  during  a 
certain  time,  and  on  the  faith  of  such  a  contract,  made  a  similar 
contract  with  the  shipi)er;  and  in  the  meantime  the  connecting 
carrier  had  not  in  fact  published  and  filed  with  the  commission 
a  new  schedule  increasing  the  rate.  But  it  was  held  in  a  suit 
against  a  shipper,  United  States  v.  Wood  et  al.,  145  Fed.  405 
(Dist.  Ct.  of  Pa.,  1906),  that  it  is  not  made  a  criminal  offense  to 
receive  a  rebate  from  a  joint  rate  unless  the  rate  has  been  both 
filed  and  published,  tliougli  it  was  unlawful  for  a  carrier  to 
grant  a  rebate  from  a  joint  tariff  rate  which  it  had  filed  and  pub- 
lished and  in  which  it  participated  when  filed  and  published  by 
another  carrier.  The  partieij^ation  by  a  carrier  by  water  on  the 
great  lakes  in  a  through  bill  of  lading  did  not  make  that  a  lawful 
rate  as  against  the  shipper,  so  as  to  subject  him  to  prosecution 
for  a  concession  therefrom  to  him  by  such  carrier.  Camden 
Iron  Works  v.  U.  S.,  158  Fed.  561  (1908),  C.  C.  A.  third  circuit. 

§  427.  The  unit  of  offense  under  the  act.  The  Standard  Oil 
Co.  of  Indiana  Case. — The  act  penalizes  the  acceptance  of  a 
rebate  by  tlie  shipper  as  well  as  the  payment  of  a  rebate  by  the 
carrier.  It  provides  that  when  a  carrier  files  a  rate  with  the 
commission  and  participates  in  any  rate  so  filed  and  published, 
that  rate  in  any  prosecution  against  the  carrier  shall  be  deemed 
to  be  the  legal  rate.  In  a  prosecution  against  the  shipper  it 
must  be  shown  that  the  tariffs  were  published  at  least  in  the 
office  of  the  railroad  company  where  the  shipments  were  re- 
ceived. In  the  prosecution  against  the  Standard  Oil  Company 
of  Indiana  it  was  held  in  the  trial  court  that  each  carload  ship- 
ment, made  at  the  illegal  rate  where  the  public  rate  was  in  car- 

34 


530  THE   ELKIXS'    ACT.  [5    428 

lots,  constituted  a  separate  offense,  although  the  freight  bills 
were  rendered  and  paid  monthly.  United  States  v.  Standard 
Oil  Co.  of  Indiana  (Dist.  Ct.  of  N.  D.  of  111.),  155  Fed.  305. 
See  also  same  ease  on  demurrer,  148  Fed.  719.  This  ruling  was 
reversed  by  the  circuit  court  of  appeals  of  the  seventh  circuit, 
the  court  holding  that  the  gist  of  the  offense  was  the  receipt  of 
the  concession,  irrespective  of  whether  the  property  involved 
trainloads,  carloads,  or  pounds,  and  that  the  transaction 
was  not  completed  until  the  shipper  received  the  rate  different 
from  the  established  rate.  Standard  Oil  of  Indiana,  164  Fed. 
376  (1908).  The  court  also  hold  that  the  district  court  had 
erred  in  excluding  evidence  that  the  shipper  had  no  knowledge 
of  the  public  rate  and  could  pot  ascertain  the  same  by  a  construc- 
tion of  the  tariff  sheets.  On  the  retrial  of  this  case  in  the  district 
court  this  ruling  was  followed;  and  as  the  government  failed  to 
prove  that  the  tariffs  were  published  at  least  in  the  office  of  the 
railroad  company  where  the  shipments  were  received,  the  de- 
parture by  the  shipper  from  the  rates  did  not  constitute  an  of- 
fense. It  seems  that  the  freight  rates  did  not  contain  a  classifi- 
cation of  rates,  but  merely  referred  to  the  classification  pub- 
lished by  other  parties  and  were  subject  to  a  change  by  such 
other  parties.  United  States  v.  Standard  Oil  Co.  of  Indiana, 
170  Fed.  988  (1909).  This  ruling  as  to  the  unit  of  offense  was 
followed  in  United  States  v.  Bunch,  165  Fed.  736  (Ark.  D.  Ct.), 
(1908),  and  in  United  States  v.  Sterns  S.  &  L.  Co.,  165  Fed.  736 
(D.  Ct.  of  Mich.,  1908). 

But  contra,  see  United  States  v.  Vacuum  Oil  Co.,  158  Fed. 
536  (1908),  district  court  of  the  western  district  of  N.  Y. 

In  the  prosecution  of  a  carrier,  N.  Y.  C.  &  H.  R.  E.  Co.  v. 
United  States,  212  U.  S.  481,  it  was  said  by  the  supreme  court 
that  the  offense  of  giving  rebates  is  complete,  when  the  carrier 
to  whom  the  shipper  has  paid  the  full  local  rate  pays  over  to 
the  shipper  upon  a  claim  presented  to  him  the  amount  of  the 
rebate  stipulated  in  the  agreement  under  which  the  shipment 
was  made. 

§  428.  Prior  contract  and  want  of  criminal  intent  no  defense. 

It  was  held  in  the  Armour  Packing  case  by  the  supreme  court 
that  the  acceptance  of  a  rebate  by  a  shipper  under  a  prior  con- 
tract is  violative  of  the  act,  since  the  statute  is  read  into  the  con- 


§    429]  'THE    ELKINS'    ACT.  531 

tract  and  becomes  a  part  of  it,  and  it  is  immaterial  that  the  con- 
tract was  taken  in  good  faith  under  a  chiim  of  right.  The  only 
criminal  intent  requisite  to  the  criminal  offense  created  by 
statute,  which  is  not  malum  in  se,  is  the  purpose  to  do  an  act  in 
violation  of  the  statute.  No  moral  turpitude  or  wicked  intent  is 
essential  to  conviction. 

On  the  other  hand,  it  is  proper  to  show  that  there  was  no  in- 
tent to  violate  tlie  act;  that  is,  to  do  wliat  was  prohibited  by  the 
act.  Thus,  in  the  prosecution  of  a  carrier  it  was  held  by  the 
circuit  court  of  appeals  of  the  ninth  circuit,  A.,  T.  &  S.  F.  R. 
R.  Co.  V.  United  States  (1009),  170  Fed.  250,  reversing  163 
Fed.  m.  Iliat  in  the  prosecution  of  a  carrier  for  giving  a 
rebate,  tlie  intent  of  the  carrier  is  the  essence  of  the  offense,  and 
the  departure  from  the  published  tariff  rates  must  be  willful; 
that  is,  the  carrier  had  the  right  to  show  in  defense  that  it  had 
accepted  in  settlement  various  sums  less  than  the  established 
rate,  and  the  claim  of  the  shipper,  that  the  cars  had  been  loaded 
with  the  minimum  amount,  but  that  various  amounts  had  been 
lost  in  transit,  and  that  the  carrier  had  not  exacted  freight  on 
the  amount  so  lost,  was  admissible  as  showing  the  absence  of 
intent  to  violate  the  act. 

The  fact  that  the  shipper  who  contracts  for  and  receives  a 
rebate  in  violation  of  the  statute  receives  no  benefit  therefrom, 
docs  not  relieve  him  from  criminal  liabilit}";  but  the  stockholder 
in  a  corporation  which  has  accepted  rebates,  does  not  as  such 
become  personally  subject  to  the  penalties  imposed  by  the  stat- 
ute. United  States  v.  Wood  et  al.,  145  Fed.  405  (D.  C.  of  Pa.) 
(1906). 

§  429.  Conspiracies  in  rebating". — Every  agreement  for  re- 
bates is  in  effect  a  conspiracy  to  violate  the  law  prohibiting  re- 
bates. Prior  to  the  restoration  of  the  penalty  of  imprisonment. 
an  effort  was  made  to  make  agreements  to  give  rebates  punish- 
able by  imprisonment  under  the  general  conspiracy  statute,  sec- 
tion 5440  R.  S.  supra,  §  94.  But  it  was  held  in  the  southern 
district  of  New  York  by  Holt,  J.,  that  such  a  prosecution  was 
not  sustainable  under  the  conspiracy  statute.  United  States  v. 
Gailford  et  al.,  146  Fed.  298  (1906).  But  where  the  persons 
charged  with  the  offense  are  not  limited  to  the  giver  and  the 
receiver  of  the  rebates,  there  is  a  basis  for  the  charge  of  con- 


532  TIIn;  ELKINS'   ACT.  [§   430 

spiracy.  Thomas  v.  United  States,  156  Fed.  897  (1907),  re- 
versing United  States  v.  Thomas,  145  Fed.  74.  on  the  ground  of 
an  improper  instruction  as  to  presumption  of  innocence. 

§  430.  What  are  rebates. — It  has  been  held  that  the  fact  tliat 
a  rebate  is  paid  to  one  other  than  the  shipper,  was  immaterial ; 
but  a  payment  which  is  bona  fide  a  commission  for  obtaining 
business  for  the  carrier,  is  not  within  the  act.  United  States  v. 
Delaware,  etc.  R.  Co.,  152  Fed.  269  (1907).  A  railroad  company 
]-efunding  to  a  shipper  the  elevator  charges  for  transferring 
grain  from  trains  to  vessels  on  the  lakes  was  held  guilty 
of  rebating,  and  it  was  no  defense  to  the  prosecution  that 
other  carriers  did  likewise  and  that  competition  necessitated  the 
rebate.  Chicago,  M.  &  St.  P.  E.  R.  Co.  v.  United  States,  162  Fed. 
835,  C.  C.  A.  eighth  circuit  (1908 j,  affirming  157  Fed.  84.  The 
same  court  held  that  the  railroad  company  was  guilty  of  rebating 
in  refunding  elevator  charges  to  consignees,  where  iC  had  actual 
knowledge  that  the  freight  had  been  paid  by  these  consignees,, 
although  the  railroad  company  had  not  filed  a  schedule  showing 
it  had  not  absorbed  the  elevator  charge  as  a  part  of  its  rate. 

Jt  was  held  in  U.  S.  v.  Philadelphia  Ry.  Co.,  188  Fed.  484 
(1911 ),  E.  D.  of  Penn.,  that  the  Elkins  Act  did  not  apply  to  a 
car-load  shipped  from  Hamburg,  Germany,  destined  as  stated  in 
the  bill  of  lading  to  Philadelphia  for  transportation  in  bond  to 
Alberta,  Canada,  and  taken  to  its  destination  by  continuous  and 
uninterrupted  transportation  at  the  hands  of  carriers;  there 
being  no  delivery  or  change  of  title,  but  the  defendant  carriers 
merely  assisting  in  a  continuous  transportation  from  one  coiuitry 
to  another.  These  facts  being  submitted  to  the  court  the  verdict 
was  directed  for  the  defendant  railway  company,  which  had  been 
indicted  for  violation  of  the  Elkins  Act.     See  also  supra  §  145. 

A  refrigerating  company,  organized  for  the  purpose  of  con- 
trolling the  interstate  business  of  a  brewery  company,  having 
entered  into  a  contract  for  rebates  with  certain  railroads,  was 
"a  party  interested  in  the  traffic,"  and  was  therefore  subject  to 
the  act.  United  States  v.  Milwaukee,  etc.,  R.  Co.,  145  Fed.  1007 
(1906).  It  was  held  in  this  case  that  it  was  unlawful  for  a  cor- 
poration organized  to  control  the  interstate  transportation  of  the 
brewery  to  demand  and  receive  as  a  consideration  for  the  routing 
of  tlie  brewery  company 's  product  over  certain  line  of  railroad  a 


§    430]  THE   ELKINS'    ACT.  533 

toncossion  diual  to  one-eighth  or  one-tentl.'  of  the  puhli.slieJ 
freight  rates. 

It  was  held  by  the  court  of  appeals  of  the  seventh  circuit,  C.  & 
A.  Railroad  Co.  v.  United  States,  15b  b\0.  559  (1907),  affirming 
148  Fed.  646,  and  affirmed  by  a  divided  court  in  212  U.  S.  563. 
that  the  private  tracks  built  by  the  owner  of  a  packing  plant  on  its 
own  propert}',  extending  from  the  connection  Avith  the  tracks 
of  a  belt  line  railroad  to  and  around  its  buildings  and  used  in 
loading  cars  for  shipments,  are  not  a  part  ot  the  railroad  sys- 
tem, but  plant  facilities,  and  the  refunding  by  the  railroad 
company  which  made  and  published  a  schedule  of  through 
rates,  including  the  belt  line  ears,  of  one  dollar  per  car  to  such 
packing  company  on  its  shipments,  which  it  made  and  paid  for 
at  the  schedule  rate,  on  the  ground  that  it  was  a  payment  for 
the  use  of  its  private  tracks,  was  in  effect  a  rebate. 

The  comprehensive  scope  of  the  penal  provisions  of  the  Elkins 
Act  was  illustrated  in  the  affirmance  by  the  circuit  court  of  ap- 
peals of  the  third  circuit,  188  Fed.  879  (1911),  of  the  convic- 
tion of  the  T.cliigh  Valley  Railroad.  184  Fed.  543,  on  the  charge 
of  an  unlawful  discrimination  in  making  what  purported  to  be 
a  settlement  to  the  Bethlehem  Steel  Company  of  demurrage 
charges.  The  court  said  that  the  demurrage  was  a  proper  ter- 
minal charge  under  the  act,  and  when  fixed  by  the  rate  schedule 
for  a  certain  district  these  charges  were  binding  upon  the  com- 
nanies  and  shippers,  jmd  any  departure  therefrom  constituted  a 
iiiisdemeanor.  In  tliis  case  it  was  claimed  that  there  was  a  basis 
for  a  settlement,  as  the  shipper  had  claimed  that  the  demurrage 
charges  collected  by  reason  of  certain  exceptions  were  discrim- 
inatory as  against  them;  but  the  court  held  that  the  only  legal 
mode  of  correcting  such  discrimination,  if  it  existed,  was  by 
proper  notice  or  under  authority  from  the  Interstate  Commerce 
Commission.  The  question,  therefore,  was  submitted  to  the  jury 
to  determine  whether  the  settlement  was  an  honest  one  or  a  cover 
for  discrimination ;  and  as  the  .jury,  by  its  verdict,  found  it  was 
not  made  in  good  faith  the  conviction  was  sustained. 

§  431.  Requisities  of  indictment  under  the  act. — An  indict- 
ment under  this  act  is  sufficient  if  it  states  the  offenses  with 
sufficient  particularity  to  fully  advise  the  defendant  of  the 
crime  charged,   and  to   enable   a  conviction   through  it  to   be 


534  THE   ELKINS'   ACT.  [§    431 

pleaded  in  bar  of  another  subsequent  prosecution  for  tlie  same 
offense.  N.  Y.  C.  iS;  li.  R.  R.  Co.  v.  United  States,  212  U. 
S.,  5«pm. 

It  is  not  necessary  to  set  out  in  an  indictment  against  a  ship- 
per that  the  carrier's  published  rate  was  a  reasonable  one,  nor 
set  out  the  tariffs  in  full,  it  being  sufficient  to  aver  that  a  cer- 
tain named  rate  was  in  force  between  designated  points  as 
shown  by  the  tariffs.  United  States  v.  Standard  Oil  Co.,  148 
Fed.  719.  It  is  insufficient  to  aver,  however,  that  there  was  an 
arrangement  between  several  carriers  with  connecting  lines  and 
that  a  lower  total  rate  as  shown  by  the  public  tariffs  was  a  cer- 
tain sum  per  one  hundred  pounds  on  a  particular  product,  but 
that  such  product  was  transported  by  defendants  at  the  lower 
rates,  as  it  was  not  indicative  of  the  existence  of  the  joint 
through  rate  lower  than  the  total  local  rates.  See  ruling  on 
demurrer  in  Standard  Oil  Case,  148  Fed.  719,  supi'a. 

Prosecutions  under  this  act  are  governed  by  the  R.  S.  section 
1045,  as  amended  in  1876,  limiting  all  prosecutions  to  three 
years  in  cases  of  misdemeanors.  The  state  statutes  have  no  ap- 
plication. United  States  v.  Central  of  Vermont  R.  R.,  157  Fed. 
291  (Cir.  Ct.  of  N.  Y.,  1907). 

For  sufficiency  of  allegations  to  charge  the  establishment  of  a 
joint  tariff  rate  and  discrimination  therein,  see  U.  S.  v.  Penn.  R. 
Co.,  153  Fed.  625  (1907),  dist.  court  of  New  York.  It  was  held  in 
this  case  that  the  burden  is  on  the  government  to  show  a  common 
arrangement  for  a  continuous  carriage  between  the  points  men- 
tioned in  the  filed  joint  tariff. 

In  U.  S.  V.  Pomeroy  (C.  C.  of  N.  Y.,  1907),  152  Fed.  279,  it 
was  held  that  a  judgment  of  conviction  with  sentence  of  fine 
was  abated  by  the  death  of  the  convicted  party  after  the  judg- 
ment and  before  the  fine  was  paid,  and  that  the  fine  was  not 
recoverable  from  his  personal  representative  and  the  court 
wherein  the  judgment  was  rendered  had  jurisdiction  to  abate 
the  judgment. 


THE  ANTI-TRUST  ACT  OF  1890. 
Section  1. 

§  432.  Section  1  of  the  act. 

433.  Constitutionality  and  scope  of  the  act. 

434.  Interstate  transportation  is  subject  to  the  act. 

435.  Unlawful  combinations  in  commerce  other  than  transportation. 

436.  The  California  Tile  Trust  case. 

437.  The  Tennessee,  California  and  Ohio  Coal  cases. 

438.  The  Chicago  Meat  Trust  case. 

439.  The  Washington  Shingle  Trust  case. 

440.  Incidental  restraint  of  trade  not  violative  of  the  act. 

441.  The  Kansas  City  Live  Stock  Exchange  cases. 

442.  The  Chicago  Board  of  Trade  Bucket  Shop  case. 

443.  The  Calumet  &  Heckla  Mining  Company  case. 

444.  Combinations  held  to  he  ■within  the  act. 

445.  Agreements  held  not  within  the  act. 

446.  The  Standard  Oil  case. 

447.  The  American  Tobacco  case. 

448.  The  Powder  Trust  case. 

449.  Labor  combinations. 

450.  Employment  of  common  agency  not  necessarily  within  the  act. 

451.  Acts  done  outside  of  the  United  States  not  within  the  act. 

452.  Patent  monopoly  not  within  the  act. 

453.  Secret  formula  contracts  under  the  act. 

AN  ACT  To  protect  trade  and  commerce  against  unlawful  restraints 
and  monopolies. 

§  432  (314).  Contracts,  combinations,  conspiracies,  in  re- 
straint of  trade. — Be  it  enacted  hif  the  Senate  and  House  of 
Represcntaiives  of  the  United  States  of  Ame7'i'Ca  in  Congress 
assembled:  Sec.  1.  Every  contract,  combination  in  the  form  of 
trust,  or  otherwise,  or  conspiracy,  in  restraint  of  trade  or  com- 
merce among  the  several  states,  or  "with  foreign  nations,  is  hereby 
declared  to  be  illegal.  Every  person  who  shall  make  any  such 
contract  or  ensfage  in  any  snch  combination  or  conspiracy,  shall 
be  deemed  guilty  of  a  misdemeanor,  and,  on  conviction  thereof, 
shall  be  punished  by  fine  not  exceeding  five  thousand  dollars, 
or  by  imprisonment  not  exceeding  one  year,  or  by  both  said  pun- 
ishments, in  the  discretion  of  the  court. 

§  433.  Constitutionality  and  scope  of  the  act. — As  to  the  cir- 
cumstances of  the  passage  of  this  act,  its  constitutionality  and 

[535] 


536  THE   AXTI-TRUST   ACT   OP    1890.  [SECTION    1 

its  general  construction  in  relation  to  the  common  law  of  re- 
straint of  trade,  and  as  to  business  and  labor  combinations  in 
interstate  commerce,  see  supra,  part  I.  chapters  IV  and  V. 
For  decisions  containing  the  penal  provisions  of  the  act,  see 
infra  section  2  of  the  act.  Thouch  it  has  been  the  subject  of 
very  extended  discussion  as  to  its  relation  to  the  business  de- 
velopment of  the  country  both  in  and  out  of  congress,  it  has 
not  been  amended  since  its  first  enactment,  therein  differing 
from  the  interstate  commerce  act,  which  has  been  the  subject 
of  frequent  amendments. 

The  first  important  case  decided  under  the  act  was  the  so- 
called  sugar  trust  case,  U.  S.  v.  Knight  Co.,  156  U.  S.  1.  39  L. 
Ed.  325,  decided  January  18,  1895  as  it  determined  not  only  the 
construction  and  application  of  this  act,  but  the  limitations  of 
the  power  of  congress  in  dealing  with  business  combinations  or 
so-called  monopolies. 

The  American  Refinery  Company  had  acquired  by  purchase 
of  stock  of  other  refining  companies  through  shares  of  its  own 
stock  nearly  complete  control  of  the  manufacture  of  refined 
sugar  in  the  United  States.  The  bill  filed  by  the  United  States 
charged  that  the  contracts  under  which  these  purchases  were 
made  constituted  combinations  in  restraint  of  trade  and  the  relief 
sought  was  the  cancellation  of  the  agreements  under  which  the 
stock  was  transferred,  the  redelivery  of  the  stock  to  the  vendors 
and  an  injunction  against  the  further  performance  of  the  agree- 
ment. The  supreme  court  affirmed  the  decree  of  the  circuit 
court,  60  Fed.  Rep.  306,  and  the  circuit  court  of  appeals,  60 
Fe'd.  Rep.  934,  dismissing  the  bill  (Harlan,  J.,  dissenting).  The 
court  said  the  monoply  and  restraint  denounced  by  the  act  were 
the  monopoly  and  restraint  of  interstate  trade  and  commerce. 
Manufacture  was  not  commerce.  Commerce  succeeded  man- 
ufacture and  was  not  a  part  of  it,  and  sale  as  an  incident  of 
manufacture  therefore  was  distinguished  from  commerce. 

§  434  (316).  Interstate  transportation  is  subject  to  the  act. 
Tranportation  is  commerce,  and  the  provisions  of  the  act  are 
subject  to  and  cover  common  carriers  by  railroads.  This  appli- 
cation of  the  act  was  first  made  in  the  Freight  Association  case, 
166  U.  S.  290,  41  L.  Ed.  1007,  decided  in  1897,  where  the  court 
held  (Justices  White,  Shiras,  Field  and  Gray  dissenting),  that 


§  435]  THE  ANTI-TRUST  ACT  OF  1890.  537 

the  agreement  of  the  Trans-:\ns.souri  Freight  Association  for 
the  purpose  of  mutual  protection  by  establishing  and  main- 
taining reasonable  rates  on  all  freight  traffic,  both  through  and 
local,  between  competing  carriers,  was  an  unlawful  combination 
within  the  meaning  of  the  act. 

This  ruling  was  reaffirmed  at  the  following  term  with  the 
same  division  of  the  court  (Justice  Field  having  retired  and 
his  successor  Justice  McKenna  not  sitting),  in  tlie  Joint  Traffic 
Association  case,  171  U.  S.  505,  43  L.  Ed.  259. 

These  rulings  as  to  the  applicability  of  the  act  to  interstate 
railroads  were  again  rcaffirined  in  the  Northern  Securities  case, 
193  U.  S.  197,  48  L.  Ed.  679  (1904),  where  the  court,  four  judges 
dissenting,  held  that  the  organization  of  a  New  Jersey  corporation 
as  a  "holding  corporation"  for  the  shares  of  competing  inter- 
state railroads  was  an  illegal  combination  and  in  restraint  of 
interstate  commerce.  As  to  these  decisions  and  the  concurring 
opinion  of  Brewer,  J.,  in  the  Northern  Securities  Case,  see  supra, 
§76. 

§  435  (317) .  Unlawful  combinations  in  commerce  other  than 
transportation— The  Addyston  Pipe  Trust  case. — The  leading 
case  as  to  the  application  of  the  statute  to  unlawful  combinations 
other  than  railroads,  is  Addyston  Pipe  &  Steel  Co.  v.  United 
States,  175  U.  S.  211,  44  L.  Ed.  136  (1899);  wherein  the  court 
unanimously  affirmed  the  judgment  of  the  circuit  court  of  ap- 
peals. 29  C.  C.  A.  141,  S5  Fed.  Rep.  271.  In  this  case  the  court 
held  the  agreement  of  certain  pipe  manufacturers  void  under  the 
act,  on  the  ground  that  the  purpose  of  the  combination  directly 
and  by  means  thereof  was  to  increase  the  price  at  which  pipe 
should  be  sold  within  the  territory  and  to  abolish  all  competition 
between  the  parties.  The  court  found  that  the  output  and  price 
were  regulated  so  as  to  deprive  the  public  in  a  large  territory  of 
the  advantages  accruing  from  proximity  of  pipe  factories,  and 
that  the  prices  were  kept  just  low  enough  to  prevent  competi- 
tion by  eastern  manufacturers,  the  parties  agreeing  to  sell  only 
at  prices  fixed  by  their  committee,  and  the  highest  bidder  at  a 
secret  auction  became  the  lowest  bidder  at  a  public  letting. 

The  court  laid  down  the  rule  in  this  case  that  when  the  di- 
rect immediate  and  intended  effect  of  a  contract  and  combina- 
tion among  the  dealers  in  a  commodity  was  the  enhancement 


5o8  THE   ANTI-TRUST    ACT    OF    1890.  [SECTION    1 

of  the  price  and  the  suppression  of  competition,  it  amounted  to 
a  restraint  of  trade  in  the  commodity,  even  though  contracts  at 
the  enhanced  price  were  made  and  it  was  not  a  complete  mon- 
oply. 

§  436  (318).  The  California  Tile  Trust  case.— The  principle 
laid  down  in  the  Addyston  case  was  applied  by  the  supreme 
court  in  Montague  v.  Lowry,  193  U.  S.  38,  48  L.  Ed.  608  (1904), 
where  an  association  formed  in  California  by  the  manufacturers 
of  and  dealers  in  tiles,  mantels  and  grates  was  held  obnoxious  to 
the  act.  Membership  in  the  association  was  prescribed  by  rules 
and  dependent  on  conditions,  one  of  which  was  the  carrying  of 
at  least  three  thousand  dollars  worth  of  stock,  and  whether  ap- 
plicants were  admitted  or  not  was  a  matter  of  arbitrary  de- 
cision. The  dealers  in  the  association  agreed  not  to  purchase 
materials  from  manufacturers  who  were  not  members  and  not 
to  sell  unset  tiles  to  anyone  other  than  members  for  less  than 
list  prices,  which  were  fifty  per  cent  higher  than  the  prices  to 
members;  and  the  manufacturers  who  were  residents  of  states 
other  than  California  agreed  not  to  sell  to  any  one  other  than 
members,  violations  of  the  agreement  rendering  the  members 
subject  to  forfeiture  of  membership.  The  court  ruled  without 
dissent,  that  although  the  sales  of  unset  tiles  were  within  the 
state  of  California  and  although  such  sales  constituted  a  very 
small  portion  of  the  trade  involved,  the  agreement  of  the  manu- 
facturers without  the  state  not  to  sell  to  anyone  but  members 
was  part  of  a  scheme  which  included  the  enhancement  of  the 
prices  of  unset  tiles  by  dealers  within  the  state,  and  that  the 
whole  thing  was  so  bound  together  that  the  transactions  within 
the  state  were  inseparable,  and  became  a  part  of  the  purpose 
which  when  carried  out  amounted  to  and  was  a  combination  in- 
restraint  of  trade  and  commerce.  The  agreement  therefore  was 
brought  within  the  rule  declared  in  the  Addyston  case  and  dis- 
tinguished from  the  Hopkins  and  Anderson  cases,  infra,  §  440. 

§  437  (319).  The  Tennessee,  California  and  Ohio  Coal  cases. 

The  same  construction  and  application  of  the  act  has  been  made 
by  the  federal  circuit  courts.  In  United  States  v.  Jelico  Moun- 
tain Coal  &  Coke  Co.,  46  Fed.  482  (1891),  the  circuit 
court  for  Tennessee  held  void  an  agreement  between  coal 
mining  companies  operating  chiefly  in  one  state  and  the  deliv- 


§    438]  THE   ANTI-TKLST   ACT   OF    1890.  SSQ- 

eries  of  the  coal  in  another  state,  creating  a  coal  exchange  and 
fixing  the  price  for  the  coal  at  the  mines,  and  the  margin  of 
profit  to  the  dealer,  and  enforcing  the  same  by  fines. 

In  United  States  v  Coal  Dealers  Association  of  Cal.,  85  Fed. 
252  (N.  D.  of  CaJ.  1898),  an  unincorporated  association 
of  coal  dealers,  regulating  distribution  and  prices  in  iuter.state 
coal  traffic,  was  adjudged  illegal. 

In  United  States  v.  Chesapeake  &  Ohio  Fuel  Co.,  105  Fed. 
93  (1900),  the  circuit  court  for  the  southern  district  of  Ohio  fol- 
lowed the  Addyston  Pipe  &  Steel  Co.  Case  in  annulling  a  con- 
tract made  by  a  corporation  to  take  the  entire  product  of  a 
number  of  producing  firms  and  corporations  engaged  in  the 
mining  of  coal,  intending  to  sell  the  same  at  not  less  than  a 
price  to  be  fixed  by  an  executive  committee,  and  to  account  and 
pay  over  to  the  parties  the  entire  proceeds  above  a  fixed  sum  to 
be  retained  as  a  compensation,  the  stated  purpose  being  to  en- 
large the  western  market.  The*  court  said  that  the  agreement 
whereunder  shipments  were  to  be  made  in  that  and  other  states 
was  one  that  affected  interstate  commerce  and  subject  to  the 
provisions  of  the  Anti-Trust  Act,  and  that  it  was  no  defense 
that  the  agreement  had  not  in  fact  been  productive  of  injury  to 
the  public,  or  even  that  it  had  been  beneficial,  enabling  the  com- 
bination to  compete  for  the  business  of  a  wider  field. 

§  438  (320).  The  Chicago  Meat  Trust  case.— The  act  was  ap- 
plied in  the  United  States  circuit  court  for  the  northern  dis- 
trict of  Illinois  in  the  so-called  Meat  Trust  Case,  United  States 
v.  Swift,  122  Fed.  529,  decided  in  April,  1903.  The  bill  in 
this  case  set  out  that  the  defendants  controlled  sixty  per  cent, 
of  the  trade  and  commerce  in  fresh  meats  in  the  United  States, 
buying  the  live  stock  from  different  parts  of  the  United  States, 
converting  it  into  fresh  meats  and  then  shipping  the  meats  to 
their  agents  to  be  sold  to  consumers  in  different  parts  of  the 
United  States.  The  court  said  that  the  purchases,  shipments 
and  transportation  were  commercially  interdependent,  and  that 
it  was  immaterial  that  the  fresh  meats  in  the  hands  of  the  agents 
of  the  defendants  were  subject  to  ordinary  state  taxation.  The 
court  also  said  that  the  allegations  of  the  bill  of  an  unlawful 
combination  to  the  effect  that  the  purchasing  agents  were  re- 
quired to  refrain  from  bidding  against  each  other,  and  in  bid- 
ding up  at  times  so  as  to  induce  large  shipments  and  agreeing 


540  THE   ANTI- TRUST    ACT   OF    1890.  [SECTION    1 

upon  prices  to  be  adopted  and  restrictions  upon  the  quantities 
of  meats  to  be  shipped,  and  the  making  of  agreements  between 
transportation  companies  for  rebates  and  discriminating  rates, 
was  sufficient  to  show  a  violation  of  the  law.  The  demurrer 
was  overruled  and  the  motion  for  an  injunction  was  sustained. 
This  judgment  was  affirmed  by  the  supreme  court  (no  dissent), 
1905,  supra,  §  81. 

§  439  (321).  The  Washingfton  Shingle  Trust  Case.— In  Gibbs 
V.  McNeeley  et  al.,  55  C.  C.  A.  70,  118  Fed.  Rep.  120,  60  L.  R. 
A.  152  (ninth  circuit  (1902),  reversing  107  Fed.  Rep.  210  and 
102  Fed.  Rep.  594),  it  was  held  that  an  association  of  manu- 
facturers and  dealers  in  red  cedar  shingles  in  the  state  of  Wash- 
ington formed  for  the  purpose  of  controlling  the  production  and 
sale  of  such  shingles,  which  are  made  only  in  the  state,  but  are 
principally  sold  and  used  in  other  states,  and  by  its  action  in 
closing  the  mills  of  its  members,  has  reduced  the  production  and 
has  also  arbitrarily  increased  the  prices  at  which  the  product 
is  sold,  is  a  combination  in  restraint  of  commerce,  in  violation 
of  the  act  of  1890.  The  court  applied  the  rule  of  the  Knight  and 
Addyston  cases,  and  said  that  it  was  not  essential  for  a  contract 
to  refer  expressly  to  interstate  commerce,  if  its  purpose  and 
effect  were  necessarily  to  restrain  such  commerce. 

§  440  (322).  Incidental  restraint  of  trade  not  violative  of  the 
act. — The  contract  condemned  by  the  statute  is  one  whose  direct 
and  immediate  effect  is  a  restraint  upon  that  kind  of  trade  or 
commerce  Avhich  is  interstate.  It  does  not  include  regulations 
which  are  nothing  more  than  a  charge  for  a  local  facility  pro- 
vided for  the  transaction  of  commerce,  nor  does  it  include  an 
agreement  among  business  men  for  the  better  conduct  of  their 
own  business  which  incidentally  effects  interstate  commerce. 
The  leading  cases  on  this  subject  are  those  decided  in  relation 
to  the  Kansas  City  Live  Stock  Exchange,  Hopkins  v.  Union 
States,  171  U.  S.  578,  43  L.  Ed.  290  (1898),  and  the  Traders  Live 
Stock  Exchange  of  Kansas  City,  171  U.  S.  604,  43  L.  Ed.  300, 
wherein  the  supreme  court  reversed  the  judgment  of  the  circuit 
court  in  82  Fed.  Rep.  529. 

§  441  (323)  The  Kansas  City  Live  Stock  Exchange  Cases. — 
In  the  first  of  these  cases  the  court  held  that  the  Kansas  City 
Live  Stock  Ex<;hange,  an  unincorporated  voluntary  association 


§    '141  j  THE   ANTI-TRUST   ACT   OF    1890.  541 

of  men  doing  business  at  the  stock  yards  situated  partly  in 
Kansas  City,  Missouri,  and  partly  across  the  state  line  in  Kan- 
sas City,  Kansas,  doing  business  as  commission  merchants,  re- 
ceiving consignments  of  cattle  under  rules  which  prohibited 
the  employment  of  agents  to  solicit  consignments  except  upon 
a  stipulated  salary,  and  forbidding  the  sending  of  prepaid  tel- 
egrams or  teleplione  messages  as  to  the  conditions  of  the  mar- 
ket, and  providing  that  no  member  should  transact  business  with 
any  commission  merchant  of  Kansas  City  not  a  member  of  the 
exchange,  or  that  any  person  violating  the  rules  or  regulations 
or  with  any  expelled  or  suspended  member  after  notice  of  such 
violation,  was  not  in  violation  of  the  act.  The  court  said  that 
the  situation  of  the  yards  partly  in  Kansas  and  partly  in  Mis- 
souri was  a  fact  without  any  weight,  and  that  such  business  was 
not  in  fact  interstate  business  or  commerce.  The  association 
merely  provided  facilities  for  the  transaction  of  commerce. 
There  must  be  some  direct  and  immediate  effect  upon  interstate 
commerce  to  come  within  the  act.  The  court  in  this  case  cited 
a  number  of  agreements  incidentally  affecting  commerce  which 
would  not  be  included,  as  agreements  among  land  owners,  en- 
hancing the  cost  of  transporting  cattle,  or  that  of  railroad  em- 
ployes to  cease  from  work  unless  paid  a  certain  compensation, 
saying  that  these  agreenients  would  enhance  the  cost  of  inter- 
state commerce,  but  only  indirectly  and  incidentally. 

In  Anderson  v.  United  States,  supra,  the  defendf^nts  were 
not  commission  men,  but  Avere  themselves  purchasers  of  cattle 
on  the  market.  The  members  bore  the  same  relation  to  the 
association  and  they  had  carried  on  the  same  business  as  they 
carried  on  m  the  Hopkins  Case.  The  court  said  it  was  not  called 
upon  to  decide  whether  the  defendants  were  or  were  not  engaged 
in  interstate  commerce,  because  the  agreement  was  not  one  in  re- 
straint of  trade,  nor  was  there  any  combination  to  monopolize 
or  attempt  to  monopolize  such  trade  within  the  meaning  of  the 
act. 

The  court  in  this  latter  case  laid  down  the  general  rule  that 
where  the  subject-matter  of  the  agreement  does  not  directly 
relate  to  and  act  upon  and  embrace  interstate  commerce,  and 
where  the  anticipated  facts  clea.rly  show  that  the  purpose  of 
the  agreement  was  not  to  regulate,  obstruct  or  restrain  that 
commerce,  but  that  it  was  entered  into  with  the  object  to  prop- 
erly and  fairly  regulate  the  transaction  of  the  business  in  which 


54:2  THE   ANTI-TRUST    ACT    OF    1890.  [SECTION    1 

the  parties  to  tlie  agreement  were  engaged,  sncli  agreement  will 
be  upheld  as  not  within  the  statute,  where  it  can  be  seen  that 
the  character  and  terms  of  the  agreement  are  all  calculated  to 
attain  the  purposes  for  which  it  was  formed,  and  where  the 
effect  of  its  formation  and  enforcement  upon  interstate  trade 
and  commerce  is  in  any  event  indirect  and  incidental,  and  not 
its  purpose  or  object.  These  cases  were  decided  wdth  only  one 
dissent,  that  of  Mr.  Justice  Harlan. 

See  also  Field  v.  Barber  Asphalt  Co.,  194  U.  S.  618,  48  L.  Ed. 
1142  (1904),  where  the  court  held  that  the  specification  in  an 
ordinance,  that  a  particular  kind  of  asphalt  produced  only  in  a 
foreign  countr}^  should  be  used  in  a  city  pavement,  was  valid 
under  the  laws  of  the  state  and  did  not  violate  the  act  of  1890  or 
any  federal  right. 

§  442.  The  Chicago  Board  of  Trade  Bucket  Shop  Case. — In 
Chicago  Board  of  Trade  v.  The  Christy  G.  &  S.  Co.,  198  U.  S. 
236,  49  L.  Ed.  1031  (1905).  The  supreme  court  reversed  the 
circuit  court  of  appeals,  eighth  circuit,  125  Fed.  161,  and  af- 
firmed that  court  of  the  seventh  circuit,  130  Fed.  507,  and  held 
that  the  Chicago  board  of  trade  had  the  right  to  enjoin  the 
defendants  from  using  and  distributing  the  continuous  quota- 
tions of  prices  on  sales  of  grain  and  provisions  for  future  de- 
livery w^hich  were  collected  by  the  board  of  trade  and  which 
could  not  be  obtained  by  the  defendants  except  through  a  known 
breach  of  the  confidential  terms  on  which  the  plaintiff  communi- 
cated. The  court  held  that  contracts  with  telegraph  companies 
by  which  the  Chicago  board  of  trade  limited  the  communication 
of  quotation  of  prices  of  sales  of  grain  and  provisions  for  fut- 
ure delivery  collected  by  it  which  it  might  have  refrained  from 
communicating  to  any  one,  did  not  make  a  monopoly  or  amount 
to  an  attempted  monoply,  nor  did  it  amount  to  a  contract  in 
restraint  of  trade  either  under  the  Anti-Trust  Act  or  at 
common  law.    Justices  Harlan,  Brewer,  and  Day  dissented. 

§  443.  The  Calumet  &  Heckla  Mining-  Co.  case. — The  circuit 
court  of  appeals  of  the  sixtli  circuit,  in  Bigelow  v.  Calumet  &  Co., 
in  167  Fed.  721  (1908),  affirming  167  Fed.  704,  held  that  the 
purchase  by  one  IMichigan  mining  corporation  of  the  stock  of 
another  expressly  authorized  by  the  statute  and  thereby  with 
the  aid  of  proxies  from  other  stockholders  subject  to  control  of 


§   4-14]  THE  AXTI-TRUST  ACT   OP   1890,  513 

the  latter  whore  the  two  togctlier  wore  shown  to  pToducc  about 
one-ninth  of  the  copper  product  of  the  country,  was  not  illegal 
as  a  coml)ination  in  restraint  of  trade  or  commerce  in  violation 
of  the  anti-trust  act  in  the  absence  oi"  evidence  oi'  an  unlawful 
intent  to  use  the  control  so  as  to  bring  about  a  monopoly.  In  this 
ease,  the  court,  opinion  by  Lurton,  J.,  said  that  the  fundamental 
rule  declared  by  the  supreme  court  in  the  Knight  case,  supra, 
had  not  been  overruled  or  qualified  by  subsequent  decisions  and 
that  its  last  analysis  was  but  an  illustration  of  the  rule  that  the 
monoply  or  agreement  to  come  within  the  act  must  directly  and 
immediately  affect  interstate  commerce. 

See  also  concurring  opinion  of  Judge  Cochran.  In  this  case 
was  laid  down  the  rule  following  the  supreme  court  in  the  Cinn. 
Packet  Co.  V.  Bay,  200  U.  S.  179,  50  L.  Ed.  428  (1906),  that  a 
contract  is  not  to  be  assumed  to  contemplate  unlawful  results, 
unless  a  fair  construction  required  it  upon  the  established  facts. 

§  444.  Combinations  held  to  be  within  the  act. — Whether  a 
combination  is  in  restraint  of  trade  within  the  meaning  of  the 
net  is  thus  made  to  depend  upon  the  intent  and  purpose  of  the 
parties  to  control  the  market  by  eliminating  competition.  Thus, 
in  Wheeler  Stencil  Co.  v.  National  Window  Glass  Association,  152 
Fed.  864  (1907),  it  was  held  by  the  circuit  court  of  appeals,  third 
circuit  that  an  agreement  between  jobbers  and  wholesale  dealers 
doing  business  in  different  states  to  control  a  purchasing  corpor- 
ation in  the  window  glass  business  and  through  this  corporation 
controlled  by  them  enter  into  a  combination  with  a  manufacturer 
operating  factories  in  different  statos  and  manufacturing  seven 
per  cent,  of  all  the  window  glass  in  the  United  States,  where- 
under  the  defendant  and  the  dealers  agreed  to  buy  window  glass 
from  no  other  manufacturer  unless  at  materially  lower  rates, 
and  the  manufacturer  agreed  to  sell  to  no  other  dealers  except 
for  higher  prices  than  it  charged  them,  with  a  further  agree- 
ment for  limiting  the  quantity  of  window  glass  to  be  purchased 
by  each  of  the  window  dealers  with  the  power  to  arbitrarily  fix 
prices  which  were  to  be  charged  retail  dealers,  was  an  agree- 
ment to  destroy  competition  and  illegal  under  the  act. 

Thus,  also,  an  association  of  books  publishers  controlling 
ninety  per  cent,  of  the  book  business  of  the  country  which  agreed 
not  to  sell  to  persons  who  cut  prices  of  copyrighted  books,  was 
held,  in  Mines  v.  Seribner  et  al.,  147  Fed.  927  (1906),  by  the  cir- 


54-1  THE   ANTI-TRUST    ACT    OF    1890.  [SECTION    1 

cuit  court  in  New  York  to  constitute  a  conspiracy  in  restraint  of 
interstate  trade. 

In  Penn.  Sugar  Refining  Co.  v.  American  Sugar  Refining  Co., 
the  circuit  court  of  appeals  of  the  second  circuit,  166  Fed,  25-i 
(1908),  reversing  160  Fed.  144,  held  the  purchase  of  a  controlling 
interest  in  the  stock  of  a  sugar  refining  company  so  as  to  acquire 
control  thereof  and  prevent  the  corporation  from  refining  sugar 
in  competing  with  a  purchaser  so  that  the  latter  might  control 
the  business,  constituted  an  unlawful  conspiracy  in  restraint  of 
trade  under  the  act. 

In  the  circuit  court  of  appeals  of  the  fifth  circuit.  Peoples 
Tobacco  Company  v.  American  Tobacco  Co.,  170  Fed.  396 
(1909),  it  was  held  that  an  unlawful  conspiracy  was  stated  in 
the  allegation  that  defendants  conspired  to  render  its  business 
unprofitable  and  to  ruin  and  destroy  the  same  through  compet- 
ing corporations,  which  they  secretly  controlled,  by  enticing  away 
his  workmen,  by  compelling  it  to  pay  more  than  the  normal 
price  for  leaf  tobacco,  and  to  adopt  unnecessary  and  expensive 
means  to  sell  its  products. 

In  United  States  Tobacco  Co.  v.  American  Tobacco  Co.,  163 
Fed.  701  (1908,  S.  D.  of  N.  Y.),  an  agreement  between  to- 
bacco manufacturers  as  set  forth  in  a  complaint  for  damages, 
Was  held  on  demurrer  to  be  an  unlawful  interference  with  in- 
terstate commerce  in  that  it  charged  an  inducement  to  compet- 
itors to  maintain  arbitrary  and  non-competitive  prices  and 
apportioned  the  interstate  trade  and  commerce,  fixing  the 
amount  of  business  that  their  customers  slrould  do. 

See  also  Monarch  Tobacco  Works  v.  American  Tobacco  Co., 
circuit  court  (W.  D.  of  Ky.),  165  Fed.  774  (1908),  and  Hale 
V.  O'Connor  Coal  &  Supply  Co.,  181  Fed.  267  (C.  C.  of  Conn, 
1908),  where  the  combinations  charged  were  held  to  be  in  viola- 
tion of  the  act. 

See  also  Ware  Cramer  Tobacco  Co.  v.  American  Tobacco  Co.. 
180  Fed.  160,  (C.  C.  of  K  C.  1910). 

See  also  decision  of  the  C.  C.  A.  fifth  circuit,  in  McConnell  v. 
Connors  McConnell  Co.,  152  Fed.  321  (1907),  where  a  corpora- 
tion organized  for  monopolizing  fruit  importing  business  was 
held  to  violate  the  act. 

§  445.  Agreements  held  not  within  the  act. — Agreements  of 
manufacturers  or  dealers  with  their  customers  for  the  preven- 


^    44GJ  THE    ANTI-TRrST   ACT    OF    1890.  O-i't 

tion  of  dealing  with  c(>ini)etitoi-.s  by  sueli  customers  through  the 
payment  of  rebates  to  them  conditioned  on  their  not  so  dealing 
are  not  witliin  the  act.  AVhitwell  v.  Continental  Tobacco  Co.,  see 
supra,  §  S(j. 

Agreements  witli  customers  respecting  sah-s  in  certain  terri- 
tory, in  Pliillips  V.  lola  Portland  Cement  Co.,  125  Fed.  593 
(1903),  01  C.  C.  A.  19,  nor  the  incidental  restraint  of  trade  re- 
sulting in  the  purchase  of  competitors.  In  re  Green,  52  Fed.  104 
(1892),  were  held  not  within  the  act. 

See  also  in  re  Corning,  51  Fed.  205  (1892),  and  In  re  Tyrrell, 
51  Fed.  213  (1892). 

An  agreement  is  not  in  violation  of  the  act  where  its  effect 
upon  interstate  commerce  is  indirect  and  incidental  only. 

See  Ellis  v.  Inman,  124  Fed.  956  (D.  C.  of  Oregon  1903). 

A  contract  between  the  stockholders  of  a  corporation  engaged 
in  dealing  in  fish  at  different  places  whereunder,  in  the  pur- 
chase of  the  business  and  good  will,  they  were  not  to  enter  into 
competition  in  the  business  for  a  term  of  ten  years,  was  held,  in 
Booth  V.  Davis,  127  Fed.  875  (E.  D.  of  Mich.  1904),  to  be  lawful 
and  enforcible.  In  this  class  of  cases  where  the  restraint  of 
trade  is  incidental  and  ancillary  to  a  lawful  contract  and  rea- 
sonable for  the  protection  of  rights  luider  the  contract,  it  has 
been  uniformly  held  that  they  are  not  within  the  act. 

See  the  Addyston  Pipe  case,  sujyra. 

It  was  held  (Cir.  Ct.  App.,  second  circuit),  Delaware,  etc.  R. 
R.  Co.  V.  Cutter,  147  Fed.  51  (1906),  that  a  contract  by  a  railroad 
company  with  a  patron  for  the  conduct  of  the  business  of  trans- 
portation of  milk,  whereunder  he  was  to  receive  a  percentage  of 
profit  earned  on  the  freight  carrier  and  that  the  rate  charged 
should  not  exceed  those  of  competing  roads,  and  plaintiff  was  to 
have  the  exclusive  privilege  of  transporting  milk  over  defend- 
ant's road  so  far  as  permitted  by  law,  was  not  in  violation  of  the 
act. 

§  446.  The  Standard  Oil  case. — In  the  case  of  the  Standard 
Oil  Company  of  New  Jersey  et  al.  v.  United  States,  221  U.  S. 
1,  55  L.  Ed. (1911),  the  supreme  court  affirmed  with  modifi- 
cations the  decree  of  the  judges  of  tlie  circuit  court  of  the  eighth 
circuit,  173  Fed.  Rep.  177,  and  held  that  tlie  unification  of 
power  and  control  over  the  oil  industry,  which  resulted  from 

35 


0-iG  yHE   ANTI-TRUST    ACT    OP    1S90.  [SECTION   1 

combining  in  the  hands  of  a  holding  company  the  capital  stock 
of  the  varioiis  corporations  trading  in  petroleum  and  its  prod- 
ucts, raised  the  presumption  of  the  intent  to  exclude  others 
from  the  trade  and  thus  centralizing  in  the  combinations  the 
perpetual  control  of  the  movement  of  these  commodities  in  the 
channels  of  interstate  and  foreign  commerce.  The  court  said 
that  the  aggregation  of  so  vast  a  capital  under  the  circumstances 
in  evidence  showed  a  purpose  to  maintain  a  dominion  over  tlie 
oil  industry,  not  as  the  result  of  normal  methods  of  industrial 
development,  but  by  means  of  combination  which  were  resorted 
to  in  order  that  the  greater  power  that  might  be  added  than 
would  otherwise  have  arisen,  if  normal  methods  had  been  fol- 
lowed. The  presumption  thus  raised  was  made  conclusive  by 
considering  the  conduct  of  the  persons  and  corporations  who 
had  been  mainly  iustinimental  in  bringing  about  the  power  in 
the  New  Jersey  holding  corporation. 

In  answer  to  the  suggestion  that  a  very  small  percentage  of 
the  crude  oil  thus  produced  was  controlled  by  the  combination, 
the  court  said  it  was  no  answer  to  the  attempt  to  monopolize, 
as  substantial  power  over  the  crude  product  was  the  inevitable 
result  of  the  absolute  control  which  existed  over  the  refined 
product,  so  that  the  monopoly  of  the  one  carried  with  it  the 
power  to  control  the  other.  In  thus  finding  that  the  combination 
was  an  unlawful  restraint  of  trade  and  was  an  attempt  to  mo- 
nopolize, there  was  no  dissent  in  the  court.  (As  to  the  decree 
in  this  case,  see  infra,  §  472).  As  to  the  construction  of  the 
Anti-Trust  Act  approved  in  this  case,  see  supra,  part  I,  chap.  V. 

'  §  447.  The  American  Tobacco  Company  case. — In  United 
States  V.  American  Tobacco  Company,  221  U.  S.  106,  55  L.  Ed.  — 
(1911),  the  supreme  court,  while  concurring  in  the  main  with 
the  decree  of  the  circuit  court  of  the  second  circuit,  161  Fed. 
Rep.  700,  made  certain  modifications  in  the  decree  and  therefore 
remanded  tlie  case.  (As  to  the  decree,  see  infra.  §  473.)  The 
supreme  court  held  that  the  acquisition  of  dominion  and  control 
over  the  tobacco  trade  by  the  principal  and  accessory  and  sub- 
sidiary corporations  as  the  result  of  purchasing  numerous  com- 
petitors, in  many  eases  closing  out  the  business  when  acquired, 
and  of  obtaining  stock  control  of  other  competitors,  as  well  as 
of  concerns  manufacturing  the  elements  essential  to  the  sue- 


§    448]  THE   ANTI-TRLST   ACT    OF    1890.  547 

cessful  manufacture  of  tobacco  products,  brought  about  in  many 
cases  after  a  ruinous  trade  war,  the  parties  in  interest  uniformly 
covenanting  not  to  engage  in  the  tobacco  business,  and  the  former 
business  often  continuing  ostensiblj'-  as  an  independent  concern, 
violated  the  provisions  of  the  Anti-Trust  Act  against  combina- 
tions in  restraint  of  commerce,  by  the  monopolization  or  attempt 
to  monopolize  any  part  thereof,  whether  looked  at  from  the  point 
of  view  of  stock  ownership,  or  from  the  standpoint  of  the  princi- 
pal and  rccessory  or  subsidiary  corporations  viewed  independ- 
ently, including  certain  foreign  corporations,  in  so  far  as,  by 
contracts  made  by  them,  they  became  co-op,erators  in  the  cor- 
poration. 

§  448.  The  Powder  Trust  case. — The  circuit  judges  of  the 
third  circuit  construed  and  applied  the  opinions  of  the  supreme 
court  in  the  Standard  Oil  and  Tobacco  Cases  in  the  case  of  the 
so-called  powder  trust,  188  Fed.  127  (June,  1911).  The  court 
found  that  the  combination  was  based  upon  an  illegal  associa- 
tion, and  that  this  illegality  was  not  cured  l)y  the  formation  of 
a  new  company  for  the  purpose  of  acquiring  the  assets  of  the 
other  corporations,  and  vesting  the  ownership  of  their  plants 
and  the  control  of  their  business  in  that  company.  The  court 
said  the  formation  of  such  a  corporation  and  its  subsidiaries 
and  the  adoption  of  the  new  polic}^  was  merely  a  continuance 
in  a  different  form  of  the  illegal  association,  and  that  it  con- 
stituted a  combination  in  restraint  of  interstate  commerce  and 
to  monopolize  a  part  of  the  same  which  was  unlawful  under 
the  Anti-Trust  Act.  The  court  discussed  the  decisions  of  the 
supreme  court  in  the  Standard  Oil  Case  and  American  Tobacco 
Case,  and  said,  "As  we  read  those  decisions  restraint  of  inter- 
state trade  and  restraint  of  competition  in  interstate  trade  are 
not  interchangeable  expressions.  There  may  be  under  the 
Anti-Trust  Act  restraint  of  competition,  that  does  not  amount 
to  restraint  of  interstate  trade,  just  as  before  the  passage  of 
the  act  there  might  have  been  restraint  of  competition  that 
did  not  amount  to  a  common  law  restraint  of  trade;"  adding, 
^'It  matters  not  whether  the  combination  be  in  the  form  of  a 
trust  or  otherwise,  whether  it  be  in  the  form  of  a  trade  associ- 
ation or  a  corporation,  if  it  arbitrarily  uses  its  power  to  force 
weaker  competitors  out  of  business,  or  to  coerce  them  into  a 


5 -IS  THE    ANTI-TRUST    ACT   OF    1890.  [SECTION    1 

sale  to  or  uniou  with  the  combiuation,  it  puts  a  restraint  upon 
interstate  commerce,  and  monopolizes  or  attempts  to  monopo- 
lize a  part  of  that  commerce  in  a  sense  that  violates  the  Anti- 
Trust  Act." 

§  449  (326).  Labor  combinations.— The  act  prohibits  Any 
combination  or  conspiracy  in  restraint  of  interstate  commerce. 
It  was  held  In  re  Debs,  64  Fed.  Rep.  724,  U.  S.  Cir.  Ct.  N.  Dist. 
of  111.  (1894),  in  an  exhaustive  opinion,  that  the  original  design  in 
the  act  was  to  suppress  trusts  and  monopolies  in  the  form  of 
trusts,  which  of  course  would  be  of  a  contractual  character,  but 
that  it  was  equally  clear  that  a  further  and  a  more  comprehensive 
purpose  came  to  be  entertained  and  was  embodied  in  the  final 
form  of  the  enactment.  Combinations  were  condemned  not  only 
when  they  took  the  form  of  trusts,  but  in  whatever  form  found,  if 
they  be  in  restraint  of  trade,  and  that  was  the  effect  of  the  words 
"or  otherwise." 

The  Debs  case  was  taken  to  the  supreme  court,  where  the  judg- 
ment of  the  circuit  court  was  affirmed,  158  U.  S.  564,  39  L.  Ed. 
1902  (1895),  on  the  broader  ground  of  the  general  power  of  the 
federal  government  in  respect  to  interstate  commerce.  The  court 
said  however  that  this  was  not  because  it  differed  from  the  circuit 
court  in  its  construction  of  the  statute  of  1890. 

In  United  States  v.  Workingmen 's  Amalgamated  Council  of 
New  Orleans,  54  Fed.  994  (1893),  the  United  States  circuit  court 
of  Louisana  held  that  combinations  of  laborers  as  well  as  of  cap- 
italists in  restraint  of  interstate  commerce  was  violative  of  the 
act,  and  that  it  was  no  defense  that  the  origin  and  general  pur- 
pose of  a  strike  were  innocent  and  lawful,  if  they  had  been 
turned  into  an  unlawful  purpose  for  the  restraint  of  interstate 
and  foreign  commerce,  and  that  a  general  strike  for  the  discon- 
tinuance of  labor  in  all  departments  of  business,  including  in- 
cluding interstate  and  foreign  commerce,  enforced  by  violence 
and  intimidation  for  the  sake  of  enforcing  the  employment  of 
none  but  union  men,  was  unlawful  and  properly  enjoined.  See 
also  other  cases  to  same  effect  at  time  of  industrial  disturbances 
of  1893  and  1894,  Waterhouse  v.  Comer,  55  Fed.  Eep.  149 ;  United 
States  V.  Elliott,  64  Fed.  Rep,  27,  Phillips,  J.,  in  western  district 
of  Missouri :  United  States  v.  Agler,  62  Fed.  Rep.  826,  Baker,  J., 
in  District  of  Indiana:  Thomas  v.  Railroad  Co.,  62  Fed.  Rep. 
803,  Taft,  J.,  in  southern  district  of  Ohio;  Toledo,  etc.  R.  Co. 


§    451]  THE   AXTI-TRUST   ACT   OF    1890.  54!) 

V.  Pennsylvania  Co.  et  al.,  54  Fed.  Rep.  730,  Taft,  J.,  in  northern 
district  of  Ohio;  Same  v.  Same,  54  Fed.  Rep.  74G,  Rick.s,  J. 
Charge  to  grand  jury  by  Grosscup,  J,,  62  Fed.  Rep.  828,  and  by 
Ross,  J.,  62  Fed.  Rep.  834.  See  supra,  chapter  VI,  Part  1 ,  §§  91 , 
92;  and  also  sections  8  and  10  Interstate  Commerce  Act. 

The  contrary  view  was  taken  in  United  States  v.  Patterson, 
55  Fed.  Rep.  605  (1893)  ;  but  with  the  exception  of  this  decision 
the  ruling  in  the  Debs  case  was  followed  by  the  other  circuit 
courts. 

§  450.  Employment  of  common  agency  not  necessarily  with- 
in the  act. — It  Avas  held  by  the  circuit  court  of  appeals,  eighth 
circuit,  in  Arkan.sas  Brokerage  v.  Dunn,  173  Fed.  899  (1909), 
reversing  the  judgment  of  the  circuit  court,  that  the  organiza- 
tion by  a  number  of  mercantile  jobbers  located  in  the  same  city, 
of  a  brokerage  company  of  which  they  owned  the  stock,  and  the 
])urchase  of  merchandise  required  by  them  from  manufacturers 
and  jobbers  in  other  states  through  such  company  instead  of 
through  other  brokers  previously  patronized,  although  there 
was  no  agreement  binding  them  so  to  do,  and  the  use  of  their 
influence  to  extend  its  business,  did  not  constitute  a  combination 
or  conspiracy  in  violation  of  the  act.  The  court  said  if  this  ex- 
pedient affected  interstate  commerce  at  all,  it  was  not  in  a  direct, 
immediate  or  necessary  way  which  alone  Avould  make  it  obnoxi- 
ous to  the  law,  but  only  in  an  indirect,  incidental,  and  unimport- 
ant way  not  williin  the  denunciation  of  the  law. 

§  451.  Acts  done  outside  of  the  United  States  not  within  the 
act. — In  American  Banana  Co.  v.  United  Fruit  Co.,  213  U.  S. 
347  (1909),  the  court  affirmed  the  U.  S.  court  of  appeals  of  the 
second  circuit.  1 66  Fed.  261  and  the  circuit  court  of  New  York  in 
160  Fed.  184,  in  dismissing  a  complaint  which  sought  to  recover 
damages  upon  an  alleged  conspiracy  with  soldiers  and  officials 
in  Costo  Rica,  acting  under  governmental  sanction,  the  court  say- 
ing that  all  legislation  is  prima. facie  territorial,  and  that  what 
defendants  did  in  a  foreign  country  under  the  facts  set  forth 
in  the  complaint  was  not  within  the  scope  of  the  statute. 

It  is  immaterial,  however,  that  a  combination  is  made  in  a 
foreign  country,  if  it  affects  the  foreign  commerce  of  this  coun- 
try and  is  put  into  operation  here.  Thus,  in  Thomsen  v.  Union 
Castle  Mail  S.  S.  Co.,  106  Fed.  251  (1908),  the  circuit  court  of 


S^O  THE   ANTI-TRUST    ACT    OF    1890.  [SECTION    1 

appeals  of  tlio  second  circuit,  reversing  149  Fed.  933,  sustained 
a  complaint  which  alleged  a  combination  of  ship  owners  to  pre- 
vent competition  between  members  by  maintaining  uniform 
freight  rates  in  South  African  trade. 

It  is  also  immaterial  that  one  of  the  constituents  in  a  com- 
bination of  this  country  is  a  foreign  corporation  doing  business 
in  this  country.  In  the  American  Tobacco  case,  the  supreme 
court  held  that  the  circuit  court  erred  in  dismissing  as  to  the 
English  companies,  which  were  connected  by  inter-corporate 
holdings  with  the  combination  in  restraint  of  trade  organized 
in  this  country, 

§  452.  Patent  monopoly  not  within  the  act. — In  Bement  v. 
New  York  Harrow  Co.,  186  U.  S.  p.  76,  46  L.  Ed.  1058  (1902),  the 
supreme  court  said  that  the  object  of  the  patent  laws  was  a  mo- 
noply,  and  that  the  rule  was,  with  few  exceptions,  that  any  con- 
ditions which  were  not  in  their  nature  illegal  with  regard  to 
the  kind  of  property  imposed  by  the  patentee  and  agreed  to  b}'' 
the  licensee  for  the  right  to  manufacture,  or  use,  or  sell  the  ar- 
ticle, will  be  upheld  by  the  courts ;  and  the  fact  that  the  condi- 
tions of  the  contract  keep  up  a  monopoly,  does  not  render  them 
illegal. 

This  principle  has  been  ajiplied  in  several  cases.  Thus,  in 
Rubber  Tire  Wheel  Co.  v.  IMilwaukee  Rubber  Works,  in  the 
seventh  circuit,  the  court  of  appeals,  154  Fed.  358  (1907),  re- 
versed the  circuit  court  of  Wisconsin  in  142  Fed.  331,  and  held 
that  licenses  which  were  granted  by  the  owner  of  the  patent 
under  an  agreement  that  the  licensee  should  sell  the  patented 
article  only  at  prices  fixed  by  the  agreement,  and  restricting  the 
production  of  the  licensee,  were  valid,  the  court  saying  that 
patented  articles  unless  and  until  they  are  released  by  the  owner 
of  the  patent  from  his  monopoly,  are  not  articles  of  trade  or 
commerce  among  the  several  states  within  the  meaning  of  the 
act,  and  that  provisions  in  the  licenses  for  the  accumulation  of 
a  fund  for  the  suppression  of  competition  did  not  render  the 
licenses  invalid. 

In  the  case  of  Indiana  Mfg.  Co.  v.  Case  Threshing  ]\rachine  Co.. 
154  Fed.  p.  365  (1907),  the  same  court,  reversing  the  circuit  court 
of  Wisconsin,  148  Fed.  21,  held  that  a  contract  by  a  patentee 
granting  licenses  to  manufacturers  to  pay  complainants  a  roy- 


§    453]  THE   ANTI-TRL'ST   ACT    OP    1890.  ool 

alty  and  giving  tliem  a  right  to  use  invention  thereafter  ac- 
quired by  complainant,  was  not  in  violation  of  the  act. 

In  Virtou  v.  Creamery  Package  Mfg.  Co.,  it  was  held  by  the 
court  of  appeals  of  the  eighth  circuit,  179  Fed.  115  (1910),  that 
the  fact  that  the  owner  of  a  patent  was  party  to  an  illegal  combin- 
ation in  restraint  of  trade  did  not  deprive  him  of  the  right  to  sue 
for  infringement  of  his  patent,  and  that  the  owner  of  patent  could 
lawfully  notify  infringers  or  persons  believed  to  be  such  of  his 
claims  and  warn  them  that  suit  would  be  bought  to  protect  his 
legal  rights  where  he  acted  in  good  faith.  It  was  held  in  this 
case  that  a  contract  which  one  company  made  with  another,  to 
be  its  sole  agent  for  the  sale  of  its  products,  was  not  in  viola- 
tion of  the  act,  as  the  effect  of  interstate  commerce  was  only  inci- 
dental. 

As  a  patentee  still  remains  the  owner  of  his  patent  after  grant- 
ing a  license,  a  modification  of  the  licenses  between  the  owners 
and  the  various  licensees  regulating  the  manufacture  and  sale 
of  the  patented  product,  is  not  objectionable  as  a  restraint  of 
trade.  Cosher  Eubber  Works  v.  Single  Tube  Tire  Co.,  United 
States  court  of  appeals,  seventh  circuit,  166  Fed.  431  (1908). 

A  modification  of  the  broad  principle  asserted  in  the  cases 
above  noted,  was  discussed  by  the  circuit  court  of  Llassachusetts 
in  Blount  T^Ifg.  Co.  v.  Yale  &  Town  Mfg.  Co.,  166  Fed.  555  (1909), 
where  it  was  said  that  while  a  sale  or  license  of  a  patented  ar- 
ticle with  a  covenant  not  to  compete  made  as  an  ordinary  inci- 
dent to  enhance  the  value  of  the  thing  conveyed  was  not  within 
the  anti-trust  act,  and  where  it  went  beyond  this  and  sought  to 
enhance  the  price  by  removal  of  competition  under  a  general 
plan  to  regulate  and  control  the  business  and  dealing  in  inter- 
state commerce,  including  the  maintenance  of  the  price  and  the 
pooling  of  profits  and  the  elimination  of  competition  and  re- 
straint of  improvements,  it  did  violate  the  anti-trust  act ;  and  a 
bill  filed  to  enforce  such  a  contract  was  held  to  be  had  on  de- 
murrer.    See  §  86,  supra. 

§  453.  Secret  formula  contracts  under  the  act.— In  Dr.  :Miles 
Medical  Co.  v.  John  D.  Parks  &  Sons  Company,  220  U.  S.  373, 

55   L.   Ed.   (1911),   the   supreme   court,   Justice   Holmes 

dissenting,  held  that  a  restraint  of  trade,  which  would  be  un- 
lawful as  to  the  other  manufactured  articles  cannot  be  justified, 
because  the  article  in  question  is  a  proprietary  medicine  made 


552  THE   ANTI-TRUST   ACT   OP    1890.  [SECTION    1 

under  a  secret  formula,  and  that  contracts  between  a  manu- 
facturer and  all  dealers,  whom  he  permitted  to  sell  his  products, 
comprising  most  of  the  dealers  throughout  the  country,  which 
fix  the  price  for  all  sales,  whether  wholesale  or  retail,  operated 
as  a  restraint  of  trade,  unlawful  both  at  common  law,  and  as  to 
interstate  commerce  under  the  Anti-Trust  Act, — even  though 
such  products  may  be  proprietary  medicines  made  under  secret 
formulae ;  affirming  the  judgment  of  the  circuit  court  of  appeals 
of  the  sixth  circuit,  164.  Fed.  803.  The  court  said  there  was  no 
analogy  to  the  right  secured  by  letters  patented,  and  that  the 
value  of  the  so-called  proprietary  medicines  unpatented  stood 
on  no  other  footing  than  other  manufactures.  The  case  was  not 
analogous  to  a  sale  of  good  will,  or  of  an  interest  in  a  business 
or  of  the  grant  of  a  right  to  use  a  process  of  manufacture,  and 
tliat  the  agreement  was  designed  to  maintain  prices  after  the 
complainant  had  parted  with  the  title  to  the  article  sold,  and  to 
prevent  competition  of  those  who  trade  in  them.  The  court  said 
further  that  "where  commodities  have  passed  into  the  channels 
of  trade  and  are  owned  by  dealers,  the  validity  of  agreements 
to  prevent  competition,  and  to  maintain  prices  is  not  to  be  de- 
termined by  the  circumstances,  whether  they  were  produced  by 
several  manufacturers,  or  by  one,  or  whether  they  were  previ- 
ously owned  hy  one  or  by  many ;  the  complainant  having  sold 
its  product  at  prices  satisfactory  to  itself,  the  public  is  entitled 
to  whatever  advantage  may  be  derived  from  competition  in  the 
subsequent  traffic. ' ' 

The  decision  in  this  case  not  only  overruled  the  decisions  in 
the  circuit  court  in  sustaining  these  proprietary  medicine  con- 
tracts, (see  149  Fed.  858),  but  the  reasoning  of  the  opinion  con- 
demned all  contracts  between  vendor  and  vendee  whereunder  the 
vendor  undertakes  to  control  the  prices  on  goods  sold  after  part- 
ing with  the  title  thereto.  The  decision  is  however  to  be  distin- 
guished from  cases  such  as  Witw^ell  v.  Continental  Tobacco  Co., 
supra,  where  the  purpose  and  effect  of  the  agreement  is  not  to 
control  prices  in  the  hands  of  the  vendee,  but  to  protect  the 
trade  of  the  vendor  from  competitors.    See  §  86,  supra. 


^   455]  THE    ANTI-TRLST    ACT    OP    1890.  533 


Section  2. 

i5  454.  Section  2  of  act. 

455.  Criminal  procedure  under  tiie  act — Sufficiency  of  indictments. 

456.  Tiie  Chicago  Meat  Trust  indictment. 

457.  Criminal  conspiracy  under  the  act — the  overt  act. 

458.  Limitation  of  prosecutions  for  conspiracy. 

459.  Sufficiency  of  indictment  for  conspiracy. 

460.  Corporation  indictable  for  criminal  conspiracy. 

461.  Indictability  of  conspiracy  to  run  a  corner. 

462.  Immunity  of  witnesses  in  criminal  prosecutions  under  act. 

463.  The  plea  of  nolo  contendere. 

§  454  (327).  Persons  engaging  in  monopolies  guilty  of  mis- 
demeanor.— Sec,  2.  Every  person  who  shall  monopolize,  or  at- 
tempt to  monopolize,  or  combine  or  conspire  with  any  other 
person  or  persons,  to  monopolize  any  part  of  the  tradji 
or  commerce  among  the  several  States,  or  with  foreign  Nations, 
shall  be  deemed  guilty  of  a  misdemeanor,  and,  on  conviction 
thereof,  shall  be  punished  by  fine  not  exceeding  five  thousand 
dollars,  or  by  impi-isonment  not  exceeding  one  year,  or  by  both 
said  punishments,  in  tlie  discretion  of  the  court. 

(As  to  what  constitutes  a  monopoly  or  attempt  to  monopolize 

under  this  section  under  the  construction  of  the  act  by  the  su- 
preme court  in  the  Standard  Oil  and  Tobacco  Cases,  see  supra. 
§  83.) 

§  455  (328).  Criminal  procedure  under  the  act — Sufficiency 
of  indictment. — Tlie  first  section  of  the  act  condemned«two  dis- 
tinct things,  a  contract  in  restraint  of  trade  and  a  combination 
or  conspiracy  in  restraint  of  trade,  and  it  was  held  in  Rice  v. 
Standard  Oil  Co.,  134  Fed.  464,  Dist.  N.  J.,  January,  1903, 
that  these  distinct  offenses  should  not  be  confused  either  in  in- 
dictments or  in  civil  suits,  citing  United  States  v.  Cadwallader, 
39  Fed.  677  (1893).  The  second  section  makes  a  distinct  of- 
fense, that  of  monopolizing  or  attempting  to  monopolize  any 
part  of  trade  or  commerce  among  the  states. 

The  act  does  not  define  what  is  a  monopoly  any  more  than  it 
does  what  is  a  conspiracy  in  restraint  of  trade,  and  resort  must 
therefore  be  had  to  common  law  for  a  definition  of  these  general 
terms.  In  re  Green,  52  Fed.  104. 1892.  It  is  insufficient  in  an  in- 
dictment to  simply  follow  the  language  of  the  act,  for  the  reason 


554  THE   ANTI-TRUST    ACT   OF   1890.  [SECTION    2. 

that  the  words  of  the  statute  do  not  of  themselves  fully,  directly 
and  elearh-  set  forth  the  elements  necessary  to  constitute  the 
offense  intended  to  be  punished. 

For  the  essentials  of  indictment  for  violation  of  the  Act,  see 
In  re  Corning  and  United  States  v.  Greenhutt  et  al.,  51  Fed. 
205,  northern  district  of  Ohio,  1892,  and  In  re  Tyrrell,  51  Fed. 
213,  circuit  court  southern  district  of  New  York,  1892;  In  re 
Greene,  circuit  court  southern  district  of  Ohio,  52  Fed.  104, 
1892  J  United  States  v.  Nelson,  52  Fed.  646,  district  court  dis- 
trict of  Minnesota,  1892;  and  Charge  to  the  grand  jury  by 
Grosscup,  J.,  62  Fed.  828  (1894),  and  by  Ross,  J.,  62  Fed.  834, 
in  southern  district  of  California,  1894. 

It  was  held  in  these  cases  that  it  was  not  sufficient  to  simply 
follow  the  language  of  the  statute,  but  that  the  indictment  must 
contain  a  certain  description  of  the  offense  and  a  statement  of 
the  facts  constituting  the  same. 

.  See  also  Charge  to  grand  jury,  E.  D.  of  Ga.,  by  Judge  Speer, 
151  Fed.  834  (1907),  on  the  essentials  of  a  combination  and 
restraint  of  interstate  commerce. 

In  U.  S.  V.  American  Naval  Stores  Co.,  C.  C.  S.  D.  of  Ga.,  186 
Fed.  592  (1909),  it  was  held  that  an  indictment  charging  a 
conspiracy  to  violate  the  act  that  monopolizing  or  an  attempt  to 
monopolize  were  separate  offenses  and  could  not  be  included  iu 
one  of  the  indictment.  The  court  said  that  it  was  important 
that  the  defendants  should  know  whether  the  government  would 
proceed  to  prove  that  the  defendants  monopolized  or  attempted 
to  monopolize. 

These  decisions,  that  an  indictment  under  the  act  could  not 
merely  follow  the  language  of  the  statute  in  charging  a  con- 
tract or  combination  in  restraint  of  trade  or  a  monopolizing,  or 
attempt  to  monopolize  interstate  trade  or  commerce,  but  must 
contain  a  statement  of  the  facts  constituting  the  offense 
charged,  were  rendered  prior  to  the  definite  construction  of 
the  act  by  the  decisions  of  the  supreme  court  in  the  Standard 
Oil  and  Tobacco  Cases,  and  the  correctness  of  this  ruling  is 
clear  in  the  light  of  these  decisions.  It  is  not  every  restraint 
of  trade  which  is  illegal  and  criminal;  but  such  restraint  of 
trade,  as  would  have  been  illegal  and  unenforcible  at  common 
law,  is  penalized  by  the  statute.  In  a  criminal  prosecution 
therefore  under  this  act,  the  indictment  must  set  forth  the  facts 


§    456]  THE   ANTI-TRUST   ACT    OP    1890.  555 

constituting  the  offense,  and  the  jury  must  determine  under 
the  instructions  of  the  court,  whether  the  facts  sliown  in  evi- 
dence, constitute  an  undue  restraint  of  trade,  or  an  attempt  to 
monopolize. 

Prosecutions  under  this  act  are  therefore  sharply  distin- 
guished from  those  under  the  Interstate  Commerce  Act  as^ 
amended.  Under  the  latter  facts  constituting  criminal  viola- 
tions of  the  act  are  clearly  and  specifically  stated.  The  rail- 
road is  bound  to  publish  its  rates,  and  any  failure  so  to  do,  or 
any  deviation  therefrom  is  penalized.  We  have  a  directly  con- 
trary condition  in  criminal  prosecutions  under  the  Anti-Trust 
Act.  (As  to  criminal  provisions  of  act  see  address  of  Hon. 
W.  B.  Hornblower  before  American  Bar  Association,  1911.) 

The  sufficiency  of  an  indictment  under  the  Anti-Trust  Act 
has  not  yet  (1911),  been  definitely  passed  upon  by  the  supreme 
court.  The  question  was  argued  in  U.  S.  v.  Kissel,  218  U.  S. 
601,  54  L.  Ed.  p.  1168  (December,  1910),  wherein  the  United 
States  had  taken  out  a  writ  of  error  from  the  judgment  of  the 
circuit  court,  S.  D.  of  N.  Y.,  sustaining  a  plea  in  bar  of  the 
statute  of  limitations  to  an  indictment,  charging  a  conspiracy 
to  restrain  trade  and  monopolize;  but  the  court  confined  its 
opinion  to  the  single  question  of  the  sufficiency  of  the  plea. 
See  infra,  §  457. 

The  sufficiency  of  allegations  in  indictments  under  the  act  is 
also  considered  in  U.  S.  v.  McAndrews  &  Forbes  Company,  et 
al.,  149  Fed.  823  (1906),  S.  D.  of  N.  Y.,  where  the  court  held 
the  allegations  of  the  indictment  sufficient,  and  in  U.  S.  v. 
Patten,  187  Fed.  664,  S.  D.  of  N.  Y.  (March,  1911),  the  ''Cotton 
Corner"  Case.  See  infra,  §  461.  See  also  U.  S.  v.  INIaurer,  188 
Fed.  127  (Powder  Trust  Case). 

§  456.  The   Chicago  Meat  Trust  indictment. — In  U.   S.  v^ 

Smith  (I\Iay,  1911),  the  circuit  court,  X.  D.  of  Illinois,  consid- 
ered the  sufficiency  of  indictments  in  overruling  demurrers 
fih^d  in  the  so-called  meat  trust  cases.  The  contention  was 
made  that  the  penal  provisions  of  the  act  were  too  indefinite 
and  uncertain  in  defining  the  elements  or  constituents  of  the 
crime  to  justify  indictments  thereunder.  TJie  court  said  that 
the  act  was  primarily  a  criminal  statute.  The  equitable  rem- 
edies provided  in  the  act  to  be  enforced  by  the  equity  courts, 
were  made  dependent  upon  the  eriiuinal  sections;  and  unless 


556  THE   AXTI-TRUST    ACT    OF    1890.  [SECTION    2 

an  act  which  was  sought  to  be  enjoined  under  section  4  was  a 
crime  it  could  not  be  enjoined,  because  it  was  only  that  which 
was  made  a  crime  by  the  statute  which  was  subject  to  the  equity 
jurisdiction.  The  court,  therefore,  concluded  that  the  supreme 
court,  in  sustaining  the  validity  of  the  act,  had  in  effect  deter- 
mined that  the  offenses  therein  enumerated  were  defined  with 
sufficient  accuracy.  The  court  said  that  the  facts  charged  in  the 
indictment  were  substantially  the  same  as  those  set  out  in  the 
bill  in  equity,  which  had  been  filed  against  the  same  defend- 
ants under  section  4  of  the  act,  and  which  had  been  held  suffi- 
cient by  the  circuit  court  and  the  supreme  court.  See  Swift 
&  Co.  V.  U.  S.,  196  U.  S.  375,  supra,  where  the  court  said,  "The 
scheme  as  a  whole  seems  to  us  within  reach  of  the  law;"  and 
the  court  concluded  in  the  light  of  that  decision  and  upon  prin- 
ciple the  indictment  in  the  case  stated  facts  which  amounted 
in  law  to  a  violation  of  the  act.  The  indictment  in  this  case 
set  out  with  particularity  the  control  by  the  defendants  of 
three  extensive  packing  concerns  doing  an  interstate  business 
and  that  they  had  combined  together  in  a  plan  to  eliminate 
competition  between  such  concerns  by  agreement  not  to  com- 
pete against  each  other  for  live  stock,  but  to  bid  exactly  the 
same  amount  for  like  grades,  and  by  fixing  a  universal  selling 
price  to  be  charged  by  each,  and  apportioning  among  them- 
selves the  total  business  done  according  to  the  financial  interest 
of  each.  The  court  held  that  this  Was  sufficient  to  enable  the 
accused  to  make  their  defense, 

§  457.  Criminal  conspiracy  under  the  act — The  overt  act. — 

Both  the  first  and  second  sections  of  the  act  penalize  a  com- 
bination or  conspiracy,  and  a  conspiracy  to  restrain  or  monopo- 
lize trade  is  therefore  a  criminal  offense  under  the  act.  A  con- 
spiracy in  its  legal  sense  is  a  misdemeanor  at  common  law  and 
has  been  defined  as  an  agreement  by  two  or  more  persons  to  do 
an  illegal  act  or  to  do  a  legal  act  by  illegal  methods.  Under 
5440  U.  S.  R.  S..  see  supra,  §  94,  the  parties  to  a  conspiracy,  to 
commit  any  offense  against  the  United  States,  or  to  defraud 
the  United  States,  are  liable  to  punishment,  provided  one  or 
more  of  the  parties  to  the  conspiracy  do  some  overt  act  in  fur- 
therance of  the  conspiracy.  Neither  in  section  one  in  penaliz- 
ing a  conspiracy  to  restrain  trade  or  in  section  two  as  to  a  con- 
spiracy to  monopolize  trade,  is  there  any  requirement  of  an 


§    459]  THE   AXTI-TRL'ST   ACT    OF    1890.  557 

overt  act  to  complete  the  offense,  though  under  the  conspiracy 
statute,  Sec.  5440,  an  overt  act  in  furtlierance  of  the  conspiracy 
is  essential. 

It  was  held  in  U.  S.  v.  Kissel,  173  Fed.  823  (1000).  and  in 
U.  S.  V.  Patten,  supra,  that  the  Anti-Trust  Act  is  independent 
of  the  earlier  conspiracy  enactment,  and  that  there  was  no  war- 
rant for  reading  its  limitations  into  this  separate  and  distinct 
enactment.  It  followed  that  counts  containing  no  averments 
of  overt  acts  were  not  for  that  reason  insufficient.  In  the  Kis- 
sel Case  (infra),  the  supreme  court  considered  the  overt  acts, 
set  out  in  the  indictment,  but  did  not  pass  upon  the  necessity 
of  their  averments  as  essential  to  the  completion  of  the  offense. 

§  458.  Limitations  of  prosecutions  for  .conspiracy. — In  the 
Kissel  ease  it  was  held  by  the  district  court  that  a  conspiracy 
in  restraint  of  trade  was  nothing  but  a  contract  or  agreement 
between  two  or  more  persons  in  restraint  of  trade,  and  that  the 
three  year  statute  of  limitations  began  to  run  from  the  time 
when  the  agreement  was  complete,  and  the  demurrer  to  the 
special  plea  involved  was  therefore  overruled.  The  supreme 
court  on  writ  of  error  (December,  1910),  218  U.  S.  601,  54  L. 
Ed.  IIGB,  reversed  this  ruling  and  held  that  the  indictment 
charged  a  continuing  conspiracy,  and  although  a  contract  was 
instantaneous,  a  conspiracy  was  a  criminal  partnership  and 
might  endure  for  years  and  a  conspiracy  in  restraint  of  trii.de 
was  different  from  and  more  than  a  contract  in  restraint  of 
trade.  The  court  said  that  while  the  special  plea  was  bad,  all 
defenses,  including  the  defense  tiiat  the  conspiracy  was  ended 
by  success,  abandonment  or  otherwise  more  than  three  years 
before  the  indictment,  would  remain  open  for  consideration 
under  the  general  issue. 

§  459.  Indictments  for  conspiracy — Sufficiency. — Tt  was  held 
in  U.  S.  V.  :\IcAndrews  &  Forbes  Co..  S.  D.  of  Xew  York. 
140  Fed.  823  (1006).  that  it  Avas  not  necessary  that  the  com- 
bination should  involve  a  total  suppression  of  trade  or  a  com- 
plete monopoly,  but  that  it  was  sufficient  that  the  necessary 
operation  of  the  combination  tended  to  restrain  interstate  com- 
merce and  to  deprive  the  public  of  the  benefit  of  free  competi- 
tion. It  was  not  necessary  to  set  out  any  precise  time  when  the 
purpose  was  formed,  or  the  plan  of  the  conspiracy  was  first  de- 


553  THE   ANTI-TEUST   ACT   OF   1890.  [SECTION    2 

vised.    It  was  sufficient  to  allege  the  time  when  the  several  cases 
relied  on  to  establish  tlie  offense  were  done. 

The  court  said  that  the  term  *' conspiracy "  in  the  Anti-Trust 
law  was  to  be  interpreted  independently  of  the  preceding  words, 
and  must  depend  upon  the  concerted  action  of  two  or  more  per- 
sons to  accomplish  an  unlawful  result  by  any  means,  or  a  law- 
ful result  by  unlawful  means.  The  terms  were  wide  enough  to 
cover  not  only  the  suppression  of  the  trade  of  competitors  by 
wrongful  means,  but  every  restraint  of  interstate  trade,  if  it  can 
be  accomplished  by  a  predetermined  and  conceded  action  of  two 
or  more  individuals.  The  indictment  in  this  case  was  held  suffi- 
cient. See  also  U.  S.  v.  Va.  &  Car.  Chem.  Co.,  163  Fed.  66,  (D. 
Tenn.  1908)  where  the  court  held  the  indictment  sufficient,  but 
ordered  it  quashed  because  of  the  presence  of  unauthorized  per- 
sons before  the  grand  jury. 

§  460.  Corporations  indictable  for  criminal  conspiracy  un- 
der the  act.— In  U.  S.  v.  McAndrew^s  &  Forbes  Co.,  supra,  the 
court  held  there  was  no  improper  joinder  in  an  indictment  of  a 
corporation  and  the  individual  officers  of  a  corporation  as  prin- 
cipal conspirators.  The  court  said  that  there  was  nothing  in- 
herently impossible  in  the  corporation's  doing  one  thing  and  the 
individuals'  another  at  or  about  the  same  time,  which  things 
were  utterly  different;  yet  all,  when  dovetailed  together,  go  to 
make  up  the  joint  product  labeled  by  the  act  combination,  con- 
spiracy, and  monopoly.  It  was  conceivable  that  the  evidence 
might  show  that  the  individual  defendants  were  not  pre-agents 
but  acted  under  a  species  of  corporate  coercion;  but  this  ques- 
tion could  not  be  determined  on  demurrer.  The  court  said  that 
the  dogma  that  a  corporation  could  not  be  indicted  for  an  offense 
which  derived  its  criminality  of  evil  intention  was  but  the  rem- 
nant of  a  theory  always  fanciful  and  in  process  of  abandonment. 
It  was  as  easy  and  logical  to  ascribe  to  a  corporation  an  evil 
mind  as  it  was  to  impute  it  with  a  sense  of  contractual  applica- 
tion. The  demurrers  to  the  indictment  were,  therefore,  over- 
ruled. 

§  461.  Indictability  of  conspiracy  to  run  a  corner.— In  U. 

S.   V.   Patten,    et   al.,   187   Fed.    664,    C.   C.    S.   D.    of   N.   Y. 
(March,  1911),  the  court  sustained  a  demurrer  to  those  counts 


I    4(J2]  THE   ANTI-TRIST   ACT    OF    ISOU.  5o'J 

of  the  indictmont  for  alleged  conspiracy  in  violation  of  the 
Anti-Trust  Act  which  was  charged  to  consist  in  the  running 
of  a  corner  in  cotton.  The  court  said  that  while  a  corner  was 
illegal  because  it  was  a  combination  which  arbitrarily  coiiti-olled 
the  prices  of  commodity,  it  could  not  be  called  a  combination  in 
restraint  of  competition  since  the  going  up  of  price  incident  to 
the  creation  of  the  corner  necessarilj'  increased  competition ;  and 
as  no  monopoly  existed  when  individuals,  each  acting  for  him- 
self, owned  large  quantitites  of  commodities,  the  indictment  was 
fatally  defective  as  alleging  only  a  scheme  to  demand  monopo- 
listic prices  as  the  result  of  individual  as  distinguished  from 
collective  power.  The  indictment  in  this  case  was  for  a  con- 
spiracy to  monopolize,  and  such  an  indictment  was  insufficient 
where  it  failed  to  show  a  conspiracy,  if  successfully  carried  out. 
would  have  resulted  in  a  monopoly. 

This  case  has  been  taken  by  writ  of  error  by  the  United  States 
to  the  supreme  court,  so  that  it  may  be  definitely  determined 
whether  the  attempted  artificial  control  of  a  market  in  ' '  running 
a  corner"  is  not  an  "attempt  to  monopolize"  under  the  later  de- 
cisions construing  the  act. 

§  462.  The  immunity  of  witnesses  in  criminal  prosecutions. 

As  to  the  general  subject  of  immunity  of  witnesses  and  self  in- 
crimination in  prosecution  under  this  act  and  under  the  Inter- 
state Commerce  Act,  see  supra,  §  12 ;  infra,  §  488.  It  Avas 
held  in  U.  S.  v.  Swift,  N.  D.  of  Illinois  186  Fed.  1002  (1911), 
that  the  Immunity  Act  Feb.  11,  1893,  which  was  made  applicable 
by  the  Act  of  Feb.  14,  1003  to  the  giving  of  testimony  before  the 
department  of  commerce  and  labor  acted  as  a  general  amnesty 
for  offenses  arising  out  of  the  transaction  to  which  the  testi- 
mony alleged,  but  it  was  not  a  shield  against  prosecution  for 
offenses  committed  after  the  testimonj^  is  given  of  the  testi- 
mony furnished.  This  ruling  was  applied  to  the  case  of  a  con- 
spiracy, and  it  was  held  that  the  acquittal  of  the  defendants  on 
]  905  for  the  conspiracy  on  the  ground  that  they  had  been  made 
immune  from  prosecution  by  reason  of  testimony  given  before 
the  commissioner  of  corporations  did  not  extend  to  subsequent 
prosecutions  for  continuing  the  same  offense  thereafter,  nor  did 
it  obliterate  the  facts  testified  to,  which  if  legally  important  and 
relevant  might  be  shown  in  a  subsequent  prosecution. 


oGO  THE    ANTI-TRUST    ACT .  OF    1890.  [SECTION    2 

§  463.  The  plea  of  nolo  contedere. — In  certain  of  the  dis- 
trict courts  in  eriniinal  prosecutions  under  the  act  a  plea  of 
nolo  contendere  has  been  tendered  by  the  defendants  and  ac- 
cepted by  the  court,  and  fines  imposed  as  a  punishment.  This 
plea  is  recognized  in  some  jurisdictions  in  misdemeanor  cases 
(12  Cyc.  354)  and  when  accepted  by  the  court  is  an  implied 
confession  of  the  crime  charged,  and  is  therefore  equivalent  to 
a  plea  of  guilty  except  that  it  gives  the  accused  an  advantage 
of  not  being  estopped  to  deny  his  guilt  in  a  civil  action  based 
upon  the  same  facts,  as  he  would  be  on  a  plea  of  guilty.  See 
2  Hawkins  P.  C.  c.  31,  Sec.  3.  In  other  words,  it  is  an  admis- 
sion of  guilt,  btu  not  of  facts,  alleged  as  a  basis  of  the  charge 
of  guilt. 


4G5j  THE   ANTI-TRL'ST    ACT    OF    1890.  5G1 


Section  3. 

§  464.  Section  3  of  the  act. 
4C5.  Territories  and  district  of  Columbia  included. 

§  464  (329).  Section  3  of  the  act.— Sec.  3.  Every  contract, 
combination  in  form  of  trust  or  otherwise,  or  conspiracy,  in  re- 
straint of  trade  or  commerce  in  any  Territory  of  the  L'nited 
States  or  of  the  District  of  Columbia,  or  in  restraint  of  trade 
or  commerce  between  any  such  Territory  and  another,  or 
between  any  such  Territory  or  Territories  and  any  State  or 
States  or  the  District  of  Columbia,  or  with  foreign  nations,  or 
between  the  District  of  Columbia  and  any  State  or  States  and 
foreign  nations,  is  hereby  declared  illegal.  Every  person  who 
shall  make  any  such  contract  or  engage  in  any  such  combination 
or  conspiracy  shall  be  deemed  guilty  of  a  misdemeanor,  and  on 
conviction  thereof,  shall  be  punished  by  fine  not  exceeding  five 
thousand  dollars,  or  by  imprisonment  not  exceeding  one  year, 
or  by  both  said  punishments  in  the  discretion  of  the  court. 

§  465  (330).  Territories  and  district  of  Columbia  included. 

This  section,  it  wdll  be  seen,  differs  from  section  1  only  in  the 
fact  that  it  includes  in  the  contracts  in  restraint  of  trade  de- 
clared illegal  and  criminal  not  only  those  made  in  commerce 
among  the  several  states  and  with  foreign  nations,  but  also 
those  made  in  any  territory  of  the  United  States  or  of  the 
district  of  Columbia,  or  between  any  such  territory  and  an 
other,  or  between  any  such  territory  or  territories  and  any  state 
or  states,  and  also  between  the  district  of  Columbia  and  any 
state  or  foreign  states.  This  inclusion  of  contracts  in  a  terri- 
tory or  in  the  district  of  Columbia  is  not  under  the  authority 
of  the  commerce  clause  of  the  constitution,  but  under  the  gen- 
eral governmental  power  vested  in  congress  over  the  territories 
of  the  United  States  and  over  the  district  of  Columbia.  Con- 
gress in  the  exercise  of  its  power  to  organize  and  govern  its 
territories  combine  the  federal  and  state  authority.  Mormon 
Church  v.  United  States,  13G  U.  S.  1.  Congress  is  also  vested 
by  the  constitution  with  the  exclusive  legislative  authority  over 
the  district  of  Columbia.  Constitution  of  U.  S.,  art.  IV,  sec  3, 
par.  2 ;  art  I,  sec.  8. 

36 


562  TIIE   ANTI-TRUST    ACT    OP    1890.  [SECTION   4 


Section  4. 

§  466.  Section  4  of  the  act. 

4G7.  Procedure  in  equity  under  the  act. 

468.  Right  of  statutory  injunction  limited  to  the  government. 

469.  The  act  under  the  general  equity  jurisdiction  of  the  court. 

470.  A  state  cannot  enjoin  under  the  act. 

471.  Suits  by  the  government  for  dissolution  of  unlawful  combina- 

tions, procedure. 

472.  A  decree  in  the  Standard  Oil  case. 

473.  A  decree  in  the  American  Tobacco  Co.  case. 

§  466  (331).  Courts  may  prevent  and  restrain  violations. — 

Sec.  4.  The  several  circuit  courts  of  the  United  States  are  hereby 
invested  with  jurisdiction  to  prevent  and  restrain  violations 
of  this  act;  and  it  shall  be  the  duty  of  the  several  district  at- 
torneys of  the  United  States,  in  their  respective  districts,  under 
the  direction  of  the  Attorney-General,  to  institute  proceedings 
in  equity  to  prevent  and  restrain  such  violations.  Such  pro- 
ceedings may  be  by  way  of  petition  setting  forth  the  case  and 
praying  that  such  violation  shall  be  enjoined  or  otherwise  pro- 
hibited. When  the  parties  complained  of  shall  have  been  duly 
notified  of  such  petition  the  court  shall  proceed,  as  soon  as  may 
be,  to  the  hearing  and  determination  of  the  case;  and  pending 
such  petition  and  before  final  decree  the  court  may  at  any  time 
make  such  temporary  restraining  order  or  prohibition  as  shall 
be  deemed  just  in  the  premises. 

§  467  (332).  Procedure  in  equity  under  the  act. — The  right 
of  the  United  States  to  proceed  by  injunction  against  illegal 
combinations  under  this  act  has  been  uniformly  sustained.  Thus 
in  the  Trans-Missouri  Freight  Association  case  the  court  said 
that  the  government  had  the  power  to  bring  the  suit  to  enjoin 
the  association  from  proceeding,  although  the  association  had 
been  dissolved  pending  the  suit  before  the  decree  was  entered. 
This  ruling  was  followed  in  the  other  cases  cited,  the  Joint 
Traffic  Association  case  and  the  Northern  Securities  case.  In 
the  latter  case  the  court  enjoined  the  corporation  organized 
under  state  laws  from  exercising  the  powers  acquired  by  virtue 
of  the  acquisition  of  the  stock  of  the  subsidiary  companies. 

In  such  a  suit  filed  by  the  United  States  a  restraining  order 
may  be  issued  with  notice,  and  where  the  unlawful  combination 
acts  as  an  unincorporated  association,  it  is  sufficient  that  the  as 


§   469]  THE  AiVTI-TRUST  ACT   01-'   1890.  5G3 

Rociation  witli  a  mnriliei-  ol"  its  offiecrs  and  niembors  are  made 
parties;  it  is  not  necessary  that  all  of  its  numerous  membership 
shouki  be  made  parties.  United  States  v.  Coal  Dealers  Assoc. 
of  Cal.,  85  Fed.  252  (N.  Dist.  of  Cal.,  1898). 

§  468  (333),  Right  to  statutory  injunction  limited  to  the 
government. — I'nder  this  act  a  court  of  equity  is  not  authorized 
to  entertain  a  bill  by  a  i)i-ivate  i)arty  to  enforce  its  provisions, 
the  remedy  being  linuted  to  the  government  of  the  United  States. 
See  Gulf,  Colorado  &  Santa  Fe  R.  Co.  v.  Miami  Steamship  Co., 
30  C.  C.  A.  142,  86  Fed.  407  (1898)  ;  Southern  Indiana  Express 
Co.  V.  United  States  Express  Co.  et  al.,  35  C.  C.  A.  172,  92  P^'ed. 
1022  (1899) ;  Pidcoek  v.  Harrington,  64  Fed.  821  (1894) ;  Block 
V.  Standard  Dist.  Co.,  95  Fed.  978  (1899). 

The  court  said  in  the  first  cited  case  however  that  it. did  not 
doubt  the  general  jurisdiction  of  the  circuit  court  as  a  court 
of  equity  to  afford  preventive  relief  in  a  proper  ease  against 
threatened  injury  about  to  result  to  an  individual  from  any 
unlawful  agreement,  combination  or  conspiracy  in  restraint  of 
trad;^.  The  distinction  is  between  the  statutory  remedy  con- 
ferred by  the  act  and  the  general  jurisdiction  of  the  court  of 
equity  to  grant  equitable  relief,  where  irreparable  injury  or 
other  conditions  for  the  exercise  of  equity  jurisdiction  exists. 

In  this  latter  class  of  cases,  where  the  general  jurisdiction  of  a 
court  of  equity  is  invoked,  and  no  rights  under  the  constitution 
and  laws  of  the  United  States  are  in  question,  the  jurisdiction  of 
the  federal  court  must  be  based  upon  the  diverse  citizenship  of 
of  the  parties.  See  Hagan  v.  Blindell,  6  C.  C.  A.  86,  56  Fed. 
696,  affirming  54  Fed.  40. 

Where  however  the  equity  jurisdiction  of  a  circuit  court  of 
the  United  States  is  invoked  on  the  ground  of  a  property  right 
under  the  constitution  or  laws  of  the  United  States,  for  protec- 
tion against  any  illegal  combination  threatening  such  property 
right,  the  court  would  have  jurisdiction  irrespective  of  diverse 
citizenship.     See  section  8,  Interstate  Commerce  Act. 

§  469.  The  act  under  the  general  equity  jurisdiction  of  the 
court. — The  equity  jurisdiction  of  the  circuit  court,  therefore, 
has  been  invoked  by  private  parties  where  there  is  diverse  citi- 
zenship, and  on  grounds  for  the  exercise  of  the  equity  powers  of 
the  court.     Tlie  equitable  relief,  however,  must  be  a  protection 


564  THE   ANTI-TRUST    ACT   OP    1890.  [SECTION   4 

against  irreparable  injury  to  the  complainant,  and  can  not  ex- 
tend to  the  dissolution  of  the  combination  on  the  ground  of  in- 
jury to  the  public,  as  that  procedure  would  be  open  to  the  gov- 
ernment only.  See  National  Fire  Proof  Co.  v.  Mason  Bldg. 
Assn.,  C.  C.  A.  second  circuit,  169  Fed.  259  (1909),  affinning  145 
Fed.  260. 

The  jurisdiction  of  equity  has  also  been  sustained  where  a 
stoehholder  of  a  corporation  has  alleged  the  refusal  of  the  cor- 
poration to  maintain  an  action  at  law  for  damages  and  he  is 
compelled  to  resort  to  equity  on  account  of  such  refusal  of  the 
corporation  to  act.  See  concluding  remarks  of  opinion  in  Ames 
V.  American  Telephone  &  Telegraph  Company,  circuit  court 
Mass.,  166  Fed.  820  (1909). 

See  also  Bigelow  v.  Calumet  &  Heckla  Mining  Co.,  167  Fed. 
721  western  district  of  Llichigan,  where  a  stockholder  was  held 
entitled  to  sue  to  restrain  another  corporation  which  had  ob- 
tained the  control  of  a  majority  of  its  stock  from  voting  the 
same  and  eliminating  competition  between  the  two  companies  to 
the  irreparable  injury  of  complainant.  (This  case  was  ulti- 
mately decided  on  the  merits  in  favor  of  the  defendant.) 

In  Shawnee  Compress  Co.  v.  Anderson,  209  U.  S.  423,  52  L. 
Ed.  865  (1908),  the  supreme  court  affirmed  the  judgment  of  the 
supreme  court  of  the  territory  of  Oklahoma,  16  Okla.  231,  in 
reversing  the  decree  of  the  district  court  of  the  territory  in 
favor  of  the  defendants  in  a  suit  by  minority  stockholders  to 
cancel  a  lease  of  the  corporate  property  with  directions  to  enter 
judgment  for  plaintiff,  relief  being  granted  on  the  ground, 
wherein  the  supreme  court  concurred,  that  the  lease  was  part  of 
a  scheme  to  permit  a  monopoly  of  the  business  in  the  territory. 

§  470  (334).  A  state  cannot  enjoin  under  the  act. — Neither 
can  a  state  proceed  under  the  act  by  injunction.  Thus  in  the 
State  of  Minnesota  v.  Northern  Securities  Co.,  194  U.  S.  48, 
48  L.  Ed.  870,  the  supreme  court  held  that  the  state  of  Minne- 
sota could  not  maintain  a  suit  in  its  political  character  to  en- 
force the  Anti-Trust  Act  of  congress,  as  the  statute  confines  the 
action  to  suits  by  the  several  district  attorneys  of  the  United 
States  in  their  several  districts  under  the  direction  of  the  At- 
torney-General. The  court  said  that  the  purpose  was  to  secure 
the  uniformity  of  the  enforcement  of  the  act  so  far  as  direct 
procedure  in  equity  was  concerned,  according  to  the  uniform 


§   471]  THE  ANTI-TRUST   ACT  OF   1890.  565 

plan  applicjible  throughout  the  entire  country.  This  case  had 
been  broujjlit  in  the  state  court  and  removed  by  the  defendant  to 
the  circuit  court  of  the  United  States,  on  the  ground  that  it  was 
one  arising  under  the  constitution  and  laws  of  the  United  States. 
The  circuit  court  sustjiinod  the  jurisdiction  and  dismissed  the 
bill  upon  the  merits.  123  Fed.  G92.  But  the  supreme  court 
reversed  the  decree,  with  directions  to  remand  the  case  to  the 
state  court  on  the  ground  that  the  circuit  court  of  the  United 
States  could  not  acquire  jurisdiction  of  such  proceeding,  al- 
though both  parties  urged  the  court  to  take  jurisdiction,  as  the 
State  of  ]Minnesota  was  not  a  citizen  within  the  meaning  of  the 
constitution,  and  there  was  no  diverse  citizenship  to  sustain  the 
jurisdiction  of  the  federal  court. 

§  471.  Suits  by  the  government  for  dissolution  of  unlaw^ful 
combinations. — Procedure:  It  was  claimed  in  the  Standard  Oil 
Case,  supra,  §  446,  that  the  circuit  court  erred  in  overruling  ex- 
ceptions on  the  ground  of  impertinence  of  so  much  of  the  bill 
filed  b}^  the  United  States,  as  counted  upon  facts  occurring  prior 
to  the  Anti-Trust  Act.  But  the  court  held  that  this  ruling  could 
not  be  regarded  as  prejudicial  error  where  the  court  gave  no 
weight  to  the  testimony  adduced  in  the  averments  complained  of, 
except  as  far  as  it  tended  to  throw  light  upon  the  acts  done  after 
the  passage  of  the  statute,  the  results  of  which  it  was  charged 
were  being  participated  in  and  enjoyed  by  the  alleged  combina- 
tion at  the  time  of  filing  the  bill. 

In  Union  Pacific  Coal  Company  v.  United  States,  173  Fed. 
737  (1909),  it  was  held  by  the  circuit  judges  of  the  eighth  circuit 
that  a  combination  between  a  corporation  and  its  officers  or 
agents  could  not  be  formed  by  the  efforts  of  the  officers  or  agents 
alone  without  the  conscious  participation  in  it  by  any  other  of- 
ficer or  agent  of  the  corporation,  and  that  conscious  participa- 
tion of  two  or  more  minds  is  indispensable  to  an  unlawful  com- 
bination. Neither  were  non-participating  stockholders  crimin- 
ally liable  for  a  violation  of  law  by  the  corporation  wherein  they 
did  not  participate. 

In  Alexander  v.  U.  S.,  201  U.  S.  117,  50  L.  Ed.  686  (1906),  it 
was  held  that  orders  of  a  federal  circuit  court,  directing  wit- 
nesses to  ansAver  the  questions  put  to  them  and  produce  written 
evidence  in  their  possession,  on  their  examination  before  a  spe- 
cial examiner  appointed  in  a  suit  brought  by  the  United  States 


OGti  THE   ANTI-TRUST    ACT    OF    1890.  [SECTION    -i 

to  eujoin  au  alleged  violaliou  of  the  Anti-Trust  Act,  lacked  the 
fiuality  requisite  to  sustain  an  appeal  to  the  supreme  court. 

§  472.  The  decree  in  the  Standard  Oil  case. — In  the  Stand- 
ard Oil  Case,  the  decree  entered  by  the  circuit  court  ordered  the 
dissolution  of  the  New  Jersey  holding  corporation,  and  enjoined 
the  subsidiary  corporations  and  their  stockholders  from  making 
any  agreement  tending  to  bring  about  further  violations  of  the 
statute.  This  was  criticised  as  too  broad  and  of  itself  prevent- 
ing legitimate  business  transactions.  The  supreme  court  said 
that  it  was  not  capable  of  any  such  construction  and  therefore 
could  not  produce  any  harmful  results.  The  decree  should  be 
construed,  not  as  depriving  the  stockholders  of  the  corporations 
of  the  power  to  make  lawful  and  normal  contracts  and  agree- 
ments after  the  dissolution  of  the  corporation,  but  as  restrain- 
ing them  from  by  any  device  whatever  creating  directly  or 
indirectly  the  illegal  combination  which  the  decree  dissolved. 

In  this  case  the  court  said  that  in  view  of  the  magnitude  of 
the  interests  involved  and  their  complexity,  tlie  thirty  days  for 
executing  the  decree  was  too  short,  and  it  was  extended  so  to 
embrace  a  period  of  at  least  six  months ;  and  that  in  view  of  the 
possible  injury  to  result  to  the  public  from  the  decree  prohibit- 
ing interstate  commerce  in  jDctroleum  and  its  products,  the  in- 
junction against  the  carrying  on  of  interstate  commerce  by  the 
New  Jersey  corporation  and  the  subsidiary  companies  until  the 
dissolution  of  the  company  should  not  have  been  awarded.  The 
ease  was  therefore  remanded  with  the  affirmance  of  the  decree 
with  these  instructions,  and  the  circuit  court  was  authorized  to 
retain  jurisdiction  to  the  extent  necessary  to  compel  compliance 
in  every  respect  with  its  decrees.  (With  respect  to  the  modifi- 
cations and  also  as  to  the  decree  in  the  Tobacco  case,  Justice  Har- 
lan dissented,  though  concurring  in  the  findings  of  the  court.) 

§  473.  The  decree  in  the  American  Tobacco  Company  case. — 

In  the  American  Tobacco  Case,  supra,  §  447,  where  the  supreme 
court  without  dissent  found  that  there  was  an  unlawful  com- 
bination in  restraint  of  trade  and  an  attempted  monopolization 
of  the  business,  the  court  said  that  with  respect  to  the  remedy 
the  situation  involved  difficulties  greater  than  were  presented  in 
any  anti-trust  ease  which  had  been  considered  by  the  court.  The 
mere  decree  forbidding  stock  ownership  by  one  party  to  the  com- 
bination of  another  part  would  afford  no  adequate  measure  of 


§    473]  THE   ANTI-TRUST    ACT   OF    1890.  567 

relief  since  the  differcut  inf^n-edicnts  of  the  company  would  re- 
raain  unuirected,  and  that  the  setth'd  device  which  had  been  re- 
sorted to  made  it  difficult  to  formulate  a  remedy;  and  because 
the  tobacco  business  had  been  so  separted  under  various  subordin- 
ate companies  and  so  unified  by  the  control  acquired  by  the 
scheme  condemned,  that  any  specific  form  of  relief  might  oper- 
ate really  to  injure  the  public,  and  may  be  to  perpetuate  the 
wrong.  The  court  therefore  found  it  inexpedient  to  allow  a 
permanent  injunction  against  all  parts  of  the  combination,  or 
to  direct  the  appointment  of  a  receiver  of  all  the  property  in  all 
its  ramifications.  Considering  the  complexity  of  the  situation, 
therefore,  the  court  decreed  that  the  combination  was  in  restraint 
of  trade  and  an  attempt  to  monopolize,  and  that  the  circuit 
court  should  be  ordered  to  hear  the  parties  by  evidence  or  other- 
wise for  the  purpose  of  ascertaining  and  determining  upon  some 
plan  or  method  of  dissolving  the  corporation  and  of  recreating 
out  of-  the  elements  now  composing  it  a  new  company  which 
should  be  honestly  in  harmony  with  the  law,  and  not  repugnant 
to  the  law.  Six  months  was  allowed  from  the  receipt  of  the 
mandate  to  accomplish  these  purposes,  with  leave,  however,  in 
the  event  the  necessities  required  it  in  the  judgment  of  the  court 
below,  to  extend  such  period  for  a  further  time,  not  exceeding 
sixty  daj's,  and  that  if,  in  the  event  that  this  condition  of  dis- 
integration was  not  brought  about  in  this  time  it  should  be  the 
duty  of  the  court,  either  by  waj^  of  injunction,  or  by  the  ap- 
peintnicnt  of  a  receiver,  to  give  effect  to  tlie  requirements  of  the 
statute ;  and  the  court  concluded : 

''Pending  tlie  bringing  about  of  the  results  stated,  each  and 
all  of  the  ]iarties,  individuals  as  well  as  corj^orations,  should  be 
restrained  from  doing  any  act  which  might  tliereafter  extend  or 
enlarge  the  power  of  the  combination  by  any  means  or  device 
whatsoever." 

The  circuit  judges  under  this  decree  apjtrovcd  (Nov.  1U]]) 
the  plan  or  reorganization  whereunder  the  assets  of  the  "trust" 
were  distributed  pro  rata  to  the  stockholders  organized  in  four 
new  companies ;  and  the  attorney-general  announced  that  no  ap- 
peal would  be  t^iken  by  the  United  States  therefrom.  Such 
pro  rata  distribution  of  the  assets  of  a  combination  adjudged  il- 
legal was  approved  by  the  supreme  court  in  the  case  of  the 
Northern  Securities  Company  v.  Harriman,  197  U.  S.  244,  49 
L.  Fa\.  739,  lOOo. 


568  THE   ANTI-TRUST   ACT   OP    1890.  [SECTION    5 


Section  5. 

§  474.  Section  5  of  the  act.- 
475.  Judicial  application  of  section. 

§  474  (335).  Additional  parties  may  be  summoned. — Sec.  5. 
"Whenever  it  shall  appear  to  the  court  before  which  any  pro- 
ceeding under  section  four  of  this  act  may  be  pending  that  the 
ends  of  justice  require  that  other  parties  should  be  brought 
before  the  court,  the  court  may  cause  them  to  be  summoned, 
whether  they  reside  in  the  district  in  which  the  court  is  held 
or  not;  and  subpoenas  to  that  end  may  be  served  in  any  dis- 
trict by  the  marshal  thereof. 

§  475.  Judicial  application  of  section. — The  comprehensive 
jurisdiction  vested  in  the  court  under  this  section  is  enforced 
by  the  provisions  of  the  act  of  February  11,  1903,  known  as  tlie 
Expedition  Act,  infra,  §  490,  whereunder  suits  in  equity  brought 
by  the  United  States  may  be  given  precedence  over  others  on 
the  certificate  of  the  attorney  general  as  to  the  general  public 
importance  of  the  suit. 

The  provision  of  this  section  however,  whereunder  the  court 
can  order  parties  to  be  summoned  residing  in  other  districts  and 
can  direct  subpoena  to  be  served  in  any  district  by  the  marshal 
thereof,  only  applies  to  suits  in  equity,  that  is,  to  statutory  in- 
junctions brought  by  the  government  under  section  4  of  the 
Anti-Trust  Act.  It  does  not  apply  to  private  actions  for  dam- 
ages under  section  7  of  the  act,  which  can  only  be  brought  in 
the  district  where  tlie  defendant  resides  or  is  found.  Under  the 
Elkins  Act,  §  422,  supra,  criminal  prosecutions  brought  under 
the  Interstate  Commerce  Act  must  be  brought  in  the  district 
where  the  violation  is  committed,  or  through  which  the  trans- 
portation may  have  been  conducted. 

The  jurisdiction  vested  in  the  courts  in  this  class  of  proceed- 
ings, enabling  the  government  to  select  a  forum  in  any  state, 
where  anyone  of  the  defendants  is  a  resident,  was  illustrated  in 
the  Standard  Oil  case,  wherein  there  were  some  seventy-one  cor- 
porate and  partnership  defendants  and  several  individual  de- 
fendants and  only  one  of  the  numerous  defendants,  the  Waters- 
Pierce  Oil  Co.,  was  a  resident  in  the  district  in  which  the  suit 


§   475]  THE  AXTI-TRl.ST   ACT   OF   ]89().  569 

was  commenced,  ami  the  only  tlofcndant  served  with  process 
therein.  Conteiiipoi-aneously  with  tlie  filing  of  tlie  bill,  the  court 
made  an  order  under  this  section  to  serve  process  upon  all  the 
other  defendants,  wlierever  thoy  could  be  found.  This  jurisdic- 
tion was  sustained  l)y  tlie  r-ircuit  judges,  see  152  Fed.  290,  and 
also  on  appeal  by  the  supreme  court,  supra,  which  held  that 
under  this  section  the  court  took  i-ightful  jurisdiction  over  the 
ease,  and  properly  ordered  notice  to  be  served  upon  the  non- 
resident defendants.  As  to  parties  in  suit  in  equity  by  United 
States,  see  also  Powder  Trust  Case,  188  Fed.  151,  supra. 

There  is  no  provision  in  the  Anti-trust  Act  as  to  the  court 
wherein  criminal  offenses  shall  be  prosecuted.  Such  prosecutions 
must  therefore  be  had  in  the  district  where  the  offense  is  com- 
mitted.    See  cases  cited,  §  455. 


570  THE   ANTI-TRUST    ACT    OF    1890.  [SECTION    6 


Section  6. 
§  476.  Section  6  of  the  act. 
477.  Enforcement  of  seizure  of  goods  under  section  6. 

§  476  (336).  Seizure  and  condemnation  of  property. — Sec. 
6.  Any  property  owned  under  any  contract  or  by  any  combina- 
tion, or  pursuant  to  any  conspiracy  (and  being  the  subject 
tliereof)  mentioned  in  section  one  of  this  act,  and  being  in  the 
course  of  transportation  from  one  State  to  another,  or  to  a 
foreign  country,  shall  be  forfeited  to  the  United  States,  and 
may  be  seized  and  condemned  by  like  proceedings  as  those 
provided  by  law  for  the  forfeiture,  seizure,  and  condemnation 
of  property  imported  into  the  United  States  contrary  to  law. 

§  477  (337).  Enforcement  of  seizure  of  goods  under  section 
6. — The  seizure  of  goods  authorized  under  section  6  can  be  en- 
forced only  by  the  procedure  like  to  that  provided  ].)y  sections 
3309-3391  E.  S.  U.  S.  for  the  forfeiture  of  goods  under  the  cus- 
toms laws,  and  with  trial  by  jury.  There  is  no  reported  case  of 
such  proceeding  under  this  section.  The  seizure  cannot  be  en- 
forced in  an  equity  suit  by  the  United  States  under  section  4. 
Addyston  Pipe  &  Steel  Co.  v.  United  States,  29  C.  C.  A.  141,  85 
Fed.  271,  1890. 

It  was  said  in  this  case  by  Taft,  J.,  that  the  only  remedy 
which  can  be  afforded  under  section  4  is  a  decree  of  injunction. 


§    47i)J  THE   ANTI-TKLST    ACT    OF    Iti'JU. 


Sj-:ctiun  7. 

§  478.  Section  7  of  the  act. 

479.  The  section  con-strued  by  the  sii|)r('nie  roiirt. 

480.  Plaintiff  must  show  injuiy. 

481.  State  is  not  a  "person  or  corporation"  under  this  section. 

482.  Pleadings  under  section  7. 

483.  Danbury  Hat  case. 

484.  Measure  of  damages  under  the  section. 

485.  The  act  as  a  defense  in  suits  by  alleged  illegal  combinations. 

486.  No  recovery  under  act  for  violation  of  Interstate  Commerce  Act. 

487.  Limitations. 

488.  Self-incriminating  testimony  under  the,  act. 

§  478  (338).  Persons  injured  may  recover  threefold  dam- 
ages and  attorney's  fee.— Sec.  7.  Any  person  Avho  sliall  be  in- 
jured in  his  business  or  pi-operty  by  any  other  person  or  cor- 
l)orati()n  by  reason  of  anytbinj?  forbidden  or  deehired  to  be  un- 
lawful by  this  act,  may  sue  therefor  in  any  eireuit  court  of  the 
United  States  in  the  district  in  which  the  defendant  resides  or 
is  found,  without  respect  to  the  amount  in  controversy,  and 
shall  recover  threefold  the  damao-es  by  him  sustained,  and  the 
costs  of  suit,  including  a  reasonable  attorney's  fee. 

§  479  (339),  The  section  construed  by  the  supreme  court. — 

This  section  was  construed  by  the  supreme  coiu-t  in  .Montague 
V.  Lowry,  supra,  affirminir  the  judgment  of  the  circuit  court  of 
appeals  for  the  ninth  circuit,  115  Fed.  27,  and  of  the  cir- 
cuit court  (N.  Dist.  of  Cal.)  106  Fed.  .38,  for  treble  damages  and 
attorney's  fees  in  favor  of  a  firm  wliicli  had  endeavored  to  pro- 
cure tiles  for  the  purposes  of  their  business  from  the  tile  numu- 
faeturers,  meml)ers  of  the  association,  Avho  refused  to  deal  with 
them  because  they,  the  plaintiffs,  were  not  members  of  the  asso- 
ciation. Plaintiffs  were  not  eligible  to  membership  in  the  as.so- 
ciation,  because  they  did  not  always  carry  stock  worth  $3,000, 
which  was  made  a  condition  of  eligibility  to  membership.  It 
was  claimed  that  this  provision  had  not  been  enforced.  But 
the  court  said  there  was  nothing  to  prevent  its  enforcement  at 
any  time,  if  an  application  Avas  made  by  any  one  Avho  did  not 
fill  the  condition.  The  proof  showed  tbat  by  reason  of  the  for- 
mation of  the  association  plaintiffs  had  been  injured  in  their 
business,  because  they  were  unable  to  procure  tiles  from  tlie  man- 


572  THE   ANTI- TRUST    ACT    OF    1890.  [SECTION   7 

ufacturers  at  any  price  or  from  the  dealers  at  San  Francisco  at 
less  than  the  list  price  which  Avas  more  than  fifty  per  cent  above 
the  price  at  which  members  of  the  association  could  purchase 
the  same. 

In  this  case  the  jury  found  a  verdict  for  $500  and  judgment 
was  rendered  for  treble  this  amount,  and  in  addition  thereto  the 
court  allowed  $750  for  attorney's  fees.  The  trial  lasted  five  days. 
The  court  said  that  the  amount  of  the  attorney 's  fees  was  within 
the  discretion  of  the  trial  court  reasonably  exercised,  and  that 
the  discretion  was  not  abused. 

The  section  was  also  construed  by  the  supreme  court  in  the 
case  of  Chattanooga  Foundry  "Works  v.  Atlanta,  203  U.  S.  390, 
51  L.  Ed.  241  (1906),  affirming  the  circuit  court  of  appeals, 
sixth  circuit,  127  Fed.  25.  In  this  case  three-fold  damages  were 
recovered  by  the  city  of  Atlanta,  Ga.,  in  the  circuit  court  of 
Tennessee  against  two  Tennessee  corporations  which  were  mem- 
bers of  the  combination  held  unlawful  in  the  Addyston  Pipe  & 
Steel  Co.  case.  See  supra,  §  84.  The  plaintiff  was  engaged  in 
conducting  a  system  of  waterworks,  and  it  was  held  entitled  to 
recover  the  difference  between  the  price  paid  and  the  fair  price 
the  city  would  have  had  to  pay  under  natural  conditions  for 
water  pipe,  together  with  attorney 's  fee ;  and  the  judgment 
trebled  the  damages  allowed  by  the  jury.  The  court  said__  there 
was  no  doubt  that  congress  had  power  to  authorize  a  recovery 
for  the  damage,  although  the  latter  was  suffered  wholly  within 
the  boundaries  of  one  state,  and  that  it  was  immaterial  that 
there  was  no  direct  contract  between  plaintiff  and  the  defend- 
ants. 

§  480  (340) .  Plaintiff  must  show  injury. — The  fact  of  an  il- 
legal combination  in  an  industry  does  not  establish  a  right  of 
private  action  for  damages,  unless  plaintiff  shows  injury  di- 
rectly accruing  to  himself  by  reason  of  the  illegal  combination : 
but  an  allegation  that  plaintiff  is  in  the  business  affected  by  the 
combination,  and  by  reason  thereof  is  unable  to  make  purchases 
and  suffers  loss  thereby,  is  sufficient.  Gibbs  v.  McNeeley,  102 
Fed.  594,  reversed  in  55  C.  C.  A.  70,  118  Fed.  120,  60  L.  R.  A. 
152  (1902). 

It  is  not  necessary  that  plaintiff  should  be  engaged  himself  in 
the  business  of  interstate  commerce  if  he  has  suffered  injury  in 


§    482]  THE   ANT1-TKL,^T    ACT    UF    IS'JO.  571^ 

his  business  or  property  by  reason  of  anything  forbidden  by 
the  act.     See  City  of  Atlanta  Case,  supra. 

The  stockholder  or  creditor  of  a  corporation,  which  has  been 
made  bankrupt  by  reason  of  an  unlawful  combination  violative 
of  this  act,  has  no  right  of  action  therefore  for  damages  under 
this  section,  as  the  riglit  of  action  in  such  case  belongs  to  the 
corporation  or  its  trustee  in  bankruptcy.  See  Loeb  v.  Eastman 
Kodak  Company  (C.  C.  A.,  third  circuit  1910),  183  Fed.  704; 
Ames  V.  American  Telephone  &  Telegraph  Co.  (infra),  IGG  Fed. 
820  (1909).     See  also  section  4,  swpra. 

§  481  (341).  A  state  is  not  a  "person  or  corporation"  un- 
der section  7. — In  Lowenstein  v.  Evans,  69  Fed.  908  (1895), 
a  demurrer  was  sustained  to  a  suit  filed  by  a  liquor  dealer 
in  South  Carolina  under  the  seventh  section  of  the  act  against 
the  members  of  the  State  Board  of  Control  of  the  liquor 
traffic,  under  the  State  Dispensary  law,  alleging  that  the  state 
monopoly  of  the  liquor  business  was  in  violation  of  the  act. 
The  court  said  that  a  state  is  not  a  ''person"  or  "corporation" 
within  the  meaning  of  the  section. 

§  482.  Pleading-s  under  section  7. — It  is  not  sufficient  to 
frame  a  complaint  in  the  language  of  the  statute,  but  the  nature 
and  substance  of  the  contracts  alleged  to  be  illegal  and  the  sub- 
stantive facts  constituting  a  monopoly,  must  be  set  out. 

Cilley  v.  U.  S.  Machinery  Co.,  152  Fed.  726,  C.  C.  Mass. 
(1907). 

A  complaint  was  also  held  bad  on  demurrer  in  Eice  v.  Stand- 
ard Oil  Co.,  134  Fed.  464  (Dist.  N.  J.,  1905),  where  the  court 
said  that  the  plaintiff  must  not  only  show  facts  showing  the 
combination  to  be  unlawful,  but  also  facts  showing  that  by  rea- 
son of  such  unlawful  action  he  had  been  injured  in  his  business 
or  property ;  and  that  the  act  made  a  distinction  between  a  con- 
tract and  a  combination  or  conspiracy,  and  the  two  should  not 
be  confused  in  a  pleading  in  a  civil  case  any  more  than  in  in- 
dictment in  a  criminal  proceeding.  As  to  complaint  held  suffici- 
ent for  submission  to  a  jury,  see  Gibbs  v.  McNeeley,  supra. 

The  complaint  in  Loewe  v.  Lawlor,  supra  (the  Danbury  Hat 
Case),  was  held  by  the  supreme  court  sufficient  on  demurrer  to 
show  a  cause  of  action  under  this  section  charging  interference 


574  THE   ANTI-TRUST    ACT   OF   1890.  [SECTION   7 

with  the  manufacturer's  business  by  an  unlawful  combination 
in  violation  of  the  act. 

§  483..  The  Danbury  Hat  case. — In  the  case  of  Loewe  v.  Law- 
lor  the  petition  was  held  good  on  demurrer  by  the  supreme 
court,  supra,  §  92,  and  on  trial  in  the  circuit  court  plaintiff  re- 
covered judgment  under  the  direction  of  court  for  $74,000.00, 
which  amount  was  trebled  by  the  court  under  this  section  of  the 
statute.  The  circuit  court  of  appeals  second  circuit,  187  Fed.  522 
(1911),  reversed  this  judgment  and  held  that  the  circuit  court 
erred  in  Avithdrawing  the  question  of  liability  from  the  jury 
when  there  was  conflicting  evidence  as  to  the  knowledge  of  de- 
fendants of  the  acts  of  the  organizations;  and  the  court  said 
that  the  mere  fact  that  a  person  was  a  member  of  the  United 
Hatters  Association,  did  not  make  him  the  principal  of  any  and 
all  agents  who  might  be  employed  by  its  officers  in  carrying  out 
its  objects  and  responsible  as  principal  if  such  agents  used  il- 
legal methods  or  caused  illegal  methods  to  be  used  in  under- 
taking to  carry  out  such  objects.  The  court  held  further  that  it 
was  for  the  jury  to  determine  from  the  entire  body  of  proof  that 
was  the  intent  of  the  individuals  who  made  up  the  combination 
or  what  they  must  have  known  to  be  the  necessarily  inevitable 
consequences  of  their  acts ;  and  also  that  it  was  erroneous  to 
admit  .evidence  of  the  payment  of  their  dues  to  the  unions 
by  the  individual  defendants  after  the  complaint  was  served ; 
as  such  was  not  competent  as  showing  ratification  and  should 
have  been  excluded.  The  testimony  of  plaintiff's  salesmen, 
that  customers  told  them  of  threats  of  boycott  made  by  persons 
claiming  to  represent  the  defendant  organizations,  was  held  in- 
competent as  hearsay. 

The  court  said  that  there  was  no  error  in  admitting  the  con- 
stitution of  the  association,  or  its  action  at  its  meetings,  or  its 
published  lectures,  or  what  it  did  with  reference  to  the  plain- 
tiffs ;  but  it  said  that  all  these  matters  were  for  the  considera- 
tion of  the  jury  to  draw  proper  inferences  therefrom.  The 
cause  was  therefore,  remanded  for  new  trial. 

§  484  (343).  Measure    of   damages   under   section   7. — The 

measure  of  damages  which  a  party  is  entitled  to  recover  in  such 
an  action  is  the  difference  between  the  price  paid  and  the  rea- 


§    485]  THE   ANTI-TRUST   ACT    OF    181)0.  575 

sonable  price  under  natural  and  competitive  conditions.     See 
also  supra,  §  479. 

The  court  said  in  the  City  of  Atlanta  case  that  the  plain  in 
tent  was  to  compensate  the  person  injured  and  that  the  enlarge- 
ment of  compensation  by  the  provision  for  trebling  the  amount 
of  damages  did  not  constitute  the  action  a  penal  action  within 
the  meaning  of  section  1047  R.  S.,  U.  S.  The  other  sections  of 
the  act  were  penal,  but  the  7th  section  was  distinctly  compensa 
tory. 

§  485.  The  act  as  a  defense  in  suits  by  alleged  illegal  com- 
binations.— There  is  no  provision  in  the  Anti-Trust  Act  such  as 
is  contained  in  some  state  anti-trust  statutes  making  the  fact 
of  membership  of  a  vendor  in  an  illegal  combination  a  defense 
by  a  vendee  in  a  suit  for  goods  purchased ;  and  where  a  contract 
of  purchase  is  wholly  collateral  to  and  independent  of  the  agree- 
ment under  which  the  combination  is  made,  the  fact  of  the  com- 
bination constitutes  no  defense  in  a  suit  for  the  purchase  price 
by  the  vendor. 

Connolly  v.  Sewer  Pipe  Co.,  184  U.  S.  540,  46  L.  Ed.  679 
(1902). 

In  this  case  it  was  held  that  the  illegality  of  common  law  of  a 
combination  formed  in  restraint  of  trade  did  not  prevent  it 
from  recovering  the  purchase  price  of  goods  sold  in  the  course 
of  business,  and  that  a  violation  of  the  Anti-Trust  Act  by  the 
formation  of  an  illegal  combination  in  restraint  of  trade  did 
not  preclude  such  a  company  from  recovering  on  collateral  con- 
tracts for  the  purchase  price  of  goods,  and  also  that  a  recovery  of 
the  treble  damages  under  section  7  could  only  be  had  by  direct 
action  and  not  by  way  of  set-off. 

In  Continental  Wall  Paper  Co.  v.  Voight,  212  U.  S.  227.  5S  L. 
Ed.  486  (1909),  the  court,  affirming  148  Fed.  930.  sustained 
the  defense  set  up  by  the  answer  in  an  action  for  goods  sold  and 
delivered  that  plnintift  was  a  selling  agent  of  a  combination  of 
wall  paper  manufacturers  offending  against  the  act.  and  that  in 
carrying  out  the  coml)ination  defendants  were  compelled  to  sign 
a  shipper's  agreement  whieh  in  olVeet  bound  them  to  buy  from 
the  ])laintifir  all  wall  ]^nper  needed  in  theij-  business  at  certain 
fixed  prices,  and  that  these  prices  were  unreasonable.  Justices 
Holmes,  Brewer.  "White  and  Peekiiam  dissenting.     The  prevail- 


576  THE   AXTI-TRUST    ACT   OF    1890.  [SECTION   7 

ing  opinion  distinguislied  the  ease  from  the  Connolly  case,  as 
there  the  contract  of  purchase  was  wholly  collateral  to  and  inde- 
pendent of  the  agreement  under  which  the  combination  was 
made,  while  in  this  case,  as  admitted  by  the  demurrer,  the  count 
sued  on  was  made  up  in  execution  of  the  agreement  and  thus 
constituted  a  part  of  it. 

The  principle  was  also  laid  down  in  Bement  v.  New  York 
Harrow  Co.,  186  U.  S.  p.  70,  46  L.  Ed.  1058  (1902),  that  the  de- 
fense that  a  contract  is  in  violation  of  an  act  of  congress  against 
unlawful  restraints  of  monopolies  making  illegal  every  contract 
violative  of  its  provisions  may  be  set  up  by  private  individuals 
when  sued  thereon,  and  if  proved  constitutes  a  good  defense  ta 
the  action.  In  this  case  it  was  also  held  that  conditions  imposed 
by  the  patentee  in  a  license  which  keep  up  the  monopoly  of  fixed 
prices  did  not  violate  the  act  of  congress.  See  supra,  §  452, 
See  also:  American  Soda  Fountain  v.  Green,  69  Fed.  333  (C.  C. 
E.  D.  of  Pa.,  1895)  ;  Columbia  Wire  Co.  v.  Freeman  Wire  Co., 
71  Fed.  302  (1895). 

It  is  no  objection  to  the  enforcement,  of  a  contract,  in  the  con- 
sideration of  which  nothing  illegal  inheres,  that  it  may  incident- 
ally aid  one  of  the  parties  in  exacting  and  violating  the  Anti- 
Trust  statute.  This  was  held  in  Ingraham  v,  Nat'l  Salt  Co,,  130 
Fed.  676  (1904,  C,  C,  A,  second  circuit),  reversing,  122  Fed. 
40,  -where  the  action  was  to  recover  the  amount  of  certificates 
created  by  defendant,  in  payment  of  stock  of  another  company, 
the  certificates  in  payment  of  the  stock  purchasing  being  held  to 
have  been  lawfully  issued  in  exercise  of  the  defendant's  implied 
power  to  incur  indebtedness. 

§  486.  No  recovery  under  act  for  violation  of  interstate  com- 
merce act. — The  anti-trust  law  does  not  give  any  right  of  ac- 
tion for  damages  sustained  by  the  payment  of  excessive,  unjust, 
or  unreasonable  rates  to  interstate  carriers  alleged  to  have  been 
induced  by  a  conspiracy  between  interstate  railroads,  as  relief 
therefor  as  provided  by  the  Interstate  Commerce  Act. 

See  Meeker  v.  Lehigh  Valley  R.  E.  Co.,  162  Fed.  354,  circuit 
court,  southern  district  New  York  (1908). 

The  Anti-Trust  Act  and  the  Interstate  Commerce  Act  are  sep- 
arate and  independent  acts,  not  germane  in  character  and  pur- 
pose. See  United  States  v.  A.,  T.  &  S.  F.  R.  R,  Co.,  142  Fed.  ITS 
a905). 


§    "ISS]  THE    AXTl-TRCST    ACT    OF    1800.  577 

§  487.  Limitations. — There  is  no  limitation  fixed  nnrlcr  this 
statute  for  the  bfiiiitiii^'  of  private  aetions.  It  was  held  by  the 
supreme  court,  in  the  Athinta  case,  that  the  limitation  of  five 
years  in  R.  S.  1047  for  suits  upon  penalty  under  the  laws  of  the 
United  States,  did  not  apply,  as  an  action  under  secticm  7  was 
not  an  action  for  penalty  within  the  meaning  of  that  statute. 
The  matter  of  limitation  was  therefore  left  to*  the  local  law  in 
which  the  action  is  brought  by  the  silence  of  the  statutes  of  the 
United  States.  Thus,  in  the  City  of  Atlanta  case  the  action  was 
held  to  be  controlled  by  the  law  of  Tennessee;  and  under  tlx- 
construction  of  that  statute  by  the  courts  of  Tennessee  the  action 
was  held  to  be  controlled  by  the  ten  year  statute  of  that  state. 

§  488.  Self  incriminating  testimony. — The  subject  of  immun- 
ity .of  witnesses  wliu  g!\  e  seii'-ineriininating  testimony,  particu- 
larly in  relation  to  governmental  prosecutions,  civil  or  criminal, 
under  the  other  sections  of  this  act,  has  been  the  subject  of  ex- 
tensive discussion.  Prior  to  the  act  of  February  25.  1903,  it  had 
been  held,  in  Foote  v.  Buchanan,  113  Fed.  156  (1902),  that  the 
act  of  congress  of  February  11,  1893,  supra,  p.  443,  did  not  ap- 
ply to  the  Anti-Trust  Act,  and  that  the  fifth  amendment  of  the 
constitution  did  apply  thereto,  so  that  self-ineriminating  testi- 
mony could  not  be  enforced  until  tliis  act  of  February  25,  1903, 
which  was  a  provisiou  of  the  legislative,  executive  and  judicial 
appropriation  act  of  that  year  {.supra,  §  347),  providing  that 
no  person  should  be  prosecuted  and  subjected  to  any  penalty  or 
forfeiture  for  or  on  account  of  any  transaction  matter  or  thing, 
concerning  which  he  may  testify  or  produce  evidence,  document- 
ary or  otherwise,  in  any  preceding  suit  or  prosecution  under 
said  acts.  (The  Interstate  Commerce  Act  or  the  Anti-Trust  Act). 
Provided  further  that  no  person  so  testifying  shall  be  exempted 
from  prosecution  or  punishment  for  perjury  committed  in  so 
testifying. 

By  the  act  of  June  30,  1906,  it  was  provided  that  this  innnun- 
ity  should  extend  onlj'  to  a  natural  person  who,  in  obedience 
to  a  subpoena,  gives  testimony  on  oath  or  gives  testimony,  docu- 
mentary or  otherwise,  under  oath.  As  to  the  construction  of 
this  Immunity  Act  in  relation  to  corporations  and  natural  per- 
sons, see  supra,  pp.  446  and  448. 
37 


578  THE   ANTI-TRUST    ACT    OF    1890.  [SECTION    8 


Section  8. 
§  4S9.  Section  8  of  the  act. 

§  489  (348).  "Person"  or  "persons"  defined.— Sec.  8.     That 

the  word  "person,"  or  "persons,"  wherever  used  in  this  act 
shall  be  deemed  to  include  corporations  and  associations  exist- 
ing under  or  authorized  by  the  laws  of  either  the  United  States, 
the  laws  of  any  of  the  Territories,  the  laws  of  any  state,  or  the 
laws  of  any  foreign  country. 

This  statutory  inclusion  of  the  corporations  and  associations 
in  the  term  "person"  is  not  contained  in  the  Interstate  Com- 
merce Act.  The  general  rule  however  is  well  established  that 
the  term  "person"  as  well  as  the  term  "citizen"  is  to  be  con- 
strued as  including  corporations  unless  there  be  something  be- 
yond the  mere  use  of  the  word  to  indicate  the  intent  on  the 
part  of  congress  to  include  them.  United  States  v.  Amedy,  11 
Wheat.  329,  6  L.  Ed.  502 ;  Ramsey  v.  Tacoma  Land  Co.,  196  U. 
S.  360,  49  L.  Ed.  513. 

A  municijMl  corporation  is  entitled  to  sue  for  damages  under 
the  7th  section  by  express  direction  of  this  section,  see  supra, 
§  479. 


THE  EXPEDITION  ACT. 

5  490.  The  Expedition  Act. 

491.  The  judicial  application  of  the  act. 

492.  The  amendment  of  1910. 

493.  The  construction  of  the  statute. 

§  490.  The  Expedition  Act. 

AN  ACT  To  expedite  the  hearing  and  determination  of  suits  in  equity 
pending  or  hereafter  brought  under  the  act  of  July  second,  eighteen 
hundred  and  ninety,  entitled  "An  Act  to  protect  trade  and  com- 
merce against  unlawful  restraints  and  monopolies,"  "An  Act  to  regu- 
late commerce,"  approved  Feuruary  fourth,  eighteen  hundred  and 
eighty-seven,  or  any  ocher  Acts  Lu.ving  a  like  purpose  that  may  be 
hereafter  enacted. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of 
the  United-  States  of  America  in  Congress  assembled,  Sec.  1.  {As 
amended-  June  25,  1910.)     That  in  any  suit  in  equity  pending  or 

[{•Expedition  of  cases.] 

hereafter  l)roiifrht  in  any  circuit  court  of  the  United  States  under 
the  Act  entitled  "An  Act  to  protect  trade  and  commerce  against 
unhiwful  restraints  and  monopolies,"  approved  July  second, 
eighteen  hundred  and  ninety,  "An  Act  to  regulate  commerce," 
approved  February  fourth,  eighteen  hundred  and  eighty-seven, 
or  any  other  Acts  having  a  like  purpose  that  hereafter  may  be 
enacted,  wherein  the  United  States  is  complainant,  the  Attorney- 
General  may  file  with  the  clerk  of  such  court  a  certificate  that. 
in  his  opinion,  the  case  is  of  general  public  importance,  a  copy 
of  which  shall  be  immediately  furnished  by  such  clerk  to  each 
of  the  circuit  judges  of  the  circuit  in  which  the  case  is  pending. 
Thereupon  such  case  shall  be  given  precedence  over  others  and 
in  every  way  expedited,  and   be  assigned  for  hearing  at  the 

[Hearing   before   three  judges. 1 

earliest  prai^ticable  day,  before  not  less  than  three  of  the  circuit 
judges  of  said  court,  if  there  be  three  or  more;  and  if  there  be 
not  more  than  two  circuit  judges,  then  before  them  and  such 
district  judge  as  they  may  select  or,  in  case  the  full  court  shall 
not  at  any  time  be  made  up  by  reason  of  the  necessary  absence  or 
disqualification  of  one  or  more  of  the  said  circuit  judges,  the 
justice  of  the  Supreme  Court  assigned  to  that  circuit  or  the 
other  circuit  judge  or  judges  may  designate  a  district  judge  or 
juttges  within  the  circuit  wlio  shall  be  competent  to  sit  in  said 
court  at  the  hearing  of  said  suit.  In  the  event  the  judges  sitting 
in  such  case  shali  be  equally  divided  in  opinion  as  to  the  decision 

[579] 


580  THE    EXPEDITION    ACT.  [§    491 

[Chief  justice  <o  designate  circuit  judge  in  case  of  equal 
division.] 

or  disposition  of  said  cause,  or  in  the  event  that  a  majority  of 
said  judges  shall  be  unable  to  agree  upon  the  judgment,  order, 
or  decree  finally  disposing  of  said  case  in  said  court  which  should 
be  entered  in  said  cause,  then  they  shall  immediately  certify 
that  fact  to  the  Cliief  Justice  of  the  United  States,  who  shall  at 
once  designate  and  appoint  some  circuit  judge  to  sit  with  said 
judges  and  to  assist  in  determining  said  cause.  Such  order  of 
the  Chief  Justice  shall  be  immediately  transmitted  to  the  clerk 
of  the  circuit  court  in  which  said  cause  is  pending,  and  shall  be 
entered  upon  the  minutes  of  said  court.  Thereupon  said  cause 
shall  at  once  be  set  down  for  rearguraent  and  the  parties  thereto^ 
notified  in  writing  by  the  clerk  of  said  court  of  the  action  of  the 
court  and  the  date  fixed  for  the  reargument  thereof.  The  pro- 
visions of  this  section  shall  apply  to  all  causes  and  proceedings 
in  all  courts  now  pending,  or  which  may  hereafter  be  brought 

fApiieal  to  supreme  court.] 

Sec,  2.  That  in  every  suit  in  ecjuity  pending  or  hereafter 
brought  in  any  circuit  court  of  the  United  States  under  any  of 
said  Acts,  wherein  the  United  States  is  complainant,  including 
cases  submitted  but  not  yet  decided,  an  appeal  from  the  final 
decree  of  the  circuit  court  will  lie  only  to  the  Supreme  Court 
and  must  be  taken  within  sixty  days  from  the  entry  thereof: 
Provided,  That  in  any  case  where  an  appeal  may  have  been  taken 
from  the  final  decree  of  a  circuit  court  to  the  circuit  court  of 
appeals  before  this  Act  takes  effect  the  case  shall  proceed  to  a 
final  decree  therein,  and  an  appeal  may  be  taken  from  such  de- 
cree to  the  Supreme  Court  in  the  manner  now  provided  by  law.. 

Public,  No.  82,  approved  February  11,  1903;  Public,  No.  310, 
approved  June  25,  1910. 

This  Act,  known  as  the  "Expedition  Act,"  was  approved 
February  11,  1903,  prior  to  the  act  amendatory  of  the  Inter- 
state Commerce  Act,  which  was  approved  February  19,  1903, 
supra,  §  422,  and  is  therefore  referred  to  in  the  third  i-ection 
of  that  act,  where  it  is  provided  that  the  provisions  of  this  act 
shall  be  applicable  to  any  suit  prosecuted  under  the  direction  of 
the  attorney  general  in  the  name  of  the  Interstate  Commerce 
Commission. 

§  491  (350).  Judicial  application  of  act. — The  summary  pro- 
cedure provided  by  this  act  was  illustrated  and  enforced  in  the 
Northern  Securities  case,  which  was  argued  in  the  circuit  court 
at  St.  Louis  before  the  four  judges  of  the  court  in  April,  1903, 
decided  in  jMay,  1903,  appealed  to  the  supreme  court,  advanced 


§    492]  THE   EXPEDITION   ACT.  581 

on  the  docket  and  finally  decided  on  the  fourth  day  of  April, 
3904. 

In  Interstate  Com.  v.  Baird,  194  U.  S.  2.3,  48  L.  Ed.  860,  decided 
April  4,  1904,  which  was  appealed  directly  to  the  supreme  court 
from  the  circuit  court  in  a  proceedin<^  instituted  hy  ]\rr.  Hearst 
before  the  commission,  the  supreme  court  held  that  the  appeal 
was  properly  made  to  the  sui)reme  court  from  the  circuit  court, 
jind  the  right  of  direct  appeal  was  also  applicable  to  proceedings 
to  enforce  the  production  of  books  and  papers  or  the  giving  of 
testimony  before  the  commission.  The  court  said  it  was  the  pur- 
pose of  this  act  of  1903  to  eliminate  the  necessity  of  any  appeal 
in  the  circuit  court  of  api^eals  and  permit  the  litigation  to  be 
shortened  by  direct  appeal  to  the  supreme  court. 

In  IMissouri  Pacific  Railroad  Co.  v.  United  States,  189  U. 
S.  274,  47  L.  Ed.  811,  decided  March  9,  1903,  the  supreme  court 
while  holding  that  the  circuit  court  had  erred  in  refusing  to 
sustain  a  demurrer  of  a  railroad  company  to  a  bill  filed  by  the 
district  attorney  of  the  United  States  under  the  direction  of 
the  attorney-general,  at  the  instance  of  the  Interstate  Commerce 
Commission,  also  said  that  the  aet  of  February,  1903,  expressly 
conferred  this  power  to  invoke  the  remedy  of  injunction,  which 
had  not  heretofore  existed,  and  as  that  act  specifically  provided 
that  the  new  remedies  which  it  created  should  be  applicable  to 
all  cases  then  pending,  the  court  therefore  decided  that  the  case 
would  not  be  finally  disposed  of,  but  would  be  remanded  for 
further  proceedings  in  accordance  with  the  provisions  of  this 
act  of  Feb.  19.  1903. 

§  492.  Amendment  of  1910. — As  originally  enacted  in  1903, 
section  1  of  this  aet  did  not  contain  the  provision  for  calling  in 
a  circuit  judge  from  another  circuit  in  case  of  an  equal  division 
of  the  court,  but  did  provide  that  in  ease  of  a  division  in  opinion 
the  case  should  be  certified  to  the  supreme  court  for  re\"iew  in 
like  manner  as  if  taken  there  by  appeal. 

In  Baltimore  &  Ohio  Railroad  Co.  v.  Interstate  Commerce 
Com.,  215  U.  S.  216,  54  L.  Ed.  164  (1909),  the  court  held  that 
this  provision  did  not  authorize  the  sending  up  of  the  whole 
case,  as  that  under  the  settled  ruling  of  the  court  would  convert 
the  supreme  court  into  one  of  original  rather  than  appellate 
jurisdiction.     The  only  construction  the  court,  therefore,  could 


582  THE    EXI'EDITION    ACT.  [§    493 

give  to  the  statute  under  the  constitution,  would  be  to  authorize 
the  certification  of  questions  when  there  was  a  division  of  opin- 
ion upon  a  definite  point  of  hiw.  The  same  ruling  was  made  in 
the  case  of  U.  S.  v.  Terminal  R.  R.  Association  of  St.  Louis, 
wherein  the  entire  case  was  certified  to  the  supreme  court  on  ac- 
count of  the  equal  division  of  the  four  judges  sitting  in  the  case. 
In  consequence  of  this  ruling  the  statute  was  amended  in  1910 
(act  of  June  25,  1910),  by  providing  that  when  the  judges  were 
equally  divided  in  opinion  or  a  majority  were  unable  to  agree 
upon  a  judgment,  they  should  certify  that  fact  to  the  chief 
justice,  who  should  designate  some  circuit  judge  to  assist  in  de- 
termining the  case. 

§  493.  Construction  of  the  statute. — This  statute  was  con- 
strued hy  the  judges  of  the  fifth  judicial  circuit  in  Southern 
Pacific  T.  Co.  et  al.  v.  Interstate  Commerce  Commission,  166 
Fed.  134  (1908),  where  it  was  sought  to  enjoin  the  enforcement 
of  an  order  of  the  Interstate  Commerce  Commission  and  the 
court  overruled  a  motion  for  an  injunction  pendente  lite,  one 
of  the  judges  dissenting,  the  complainant  moved  the  court  at 
this  stage  to  certify  the  case  to  the  supreme  court  under  section 
2  of  the  act.  The  court  said  that  section  16  of  the  Interstate 
Commerce  Act  as  amended  in  1906,  made  this  expediting  act 
apply  to  suits  to  suspend  orders  of  the  Interstate  Commerce 
Commission,  and  required  both  the  final  hearing  and  the  hearing 
for  preliminary  injunction  to  be  held  before  three  circuit  judges ; 
but  there  was  no  provision  in  the  act  requiring  three  circuit 
judges  to  sit  in  any  other  phases  of  the  case  than  the  hearing  on 
application  for  preliminary  injunction  and  on  the  final  hearing : 
and  the  only  provision  for  certification  was  in  the  case  of  a  di- 
vision of  opinion,  and  there  was  no  other  provision  for  certifica- 
tion of  the  ease  in  the  statute,  so  that  the  motion  was  denied. 


THE  DEPARTMENT  OF  COALMERCE  AND  LABOR. 

§  401.  The  department  of  commerce  and  labor. 

495.  Section  six  of  the  act. 

496.  The  remaining  sections  of  the  act. 

§  494  (351).  The  department  of  commerce  and  labor. — The 

depart mc'Jit  of  labor  was  establislied  by  the  Act  of  June  13, 
1888.  That  department  was  placed  under  the  jurisdiction  and 
made  part  of  the  department  of  commerce  and  labor  established 
by  act  of  February  14,  1903,  Sup.  to  Comp.  Stat.,  page  41. 

Section  1  provides  for  the  establislmieut  of  the  executive 
department  and  the  secretary  of  commerce  and  labor;  section  2 
for  an  assistant  secretary  of  commerce  and  labor,  and  other 
clerks;  section  3  declares  in  general  terms  the  province  and  duties 
of  the  department  to  foster,  promote  and  develop  the  foreign 
and  domestic  commerce,  the  manufacture,  mining,  shipping  and 
fishery  industries,  the  labor  interests  and  the  transportation  fa- 
cilities of  the  United  States,  and  certain  appropriations  are 
made  applicable  therefor;  section  4  provides  for  the  transfer 
of  certain  existing  offices,  etc.,  from  the  treasury  and  interior 
departments  to  this  department,  including  the  lighthouse  estab- 
lishment, steamboat  inspection  service,  bureau  of  navigation, 
the  bureau  of  immigration,  the  bureau  of  statistics  from  the 
treasury,  and  the  census  office  from  the  department  of  the  in- 
terior; section  5  establishes  a  bureau  of  manufactures  making  it 
the  province  and  duty  of  the  bureau  to  foster  and  develop  the 
various  manufacturing  interests  of  the  United  States  and  mark- 
ets for  the  same  at  home  and  abroad,  domestic  and  forei<?n.  by 
gathering,  compiling  and  supplying  all  useful  information  con- 
cerning such  markets.  Consular  reports  are  provided  for.  Sec- 
tion 6  of  the  act  providing  for  a  bureau  of  corporations  is  set  out 
in  full: 

§  495  (352).  Bureau  of  Corporations — Commissioner,  Dep- 
uty, etc. — Skc.  6.  That  there  shall  ])c  in  the  Departiuent  of 
Commerce  and  Labor  a  bureau  to  be  called  the  Bureau  of  Corpo- 
rations, and  a  Commissioner  of  Corporations,  who  shall  be  the 
head  of  said  bureau,  to  be  appointed  by  the  President,  who 
shall   receive   a  salary   of  five   thousand   dollars  per   annum. 

[583J 


584  THE   DEPARTMENT    OF    COMMERCE   AND   LABOR.  [§    494 

There  shall  also  be  in  said  bureau  a  deputy  commissioner,  who 
shall  receive  a  salary  of  three  thousand  live  hundred  dollars 
per  annum,  and  who  shall,  in  the  absence  of  the  Commissioner, 
act  as  and  perform  the  duties  of  the  Commissioner  of  Corpo- 
rations, and  who  shall  perform  such  other  duties  as  may  be 
assigned  to  him  by  the  Secretary  of  Commerce  and  Labor  or 
by  the  said  Commissioner.  There  shall  also  be  in  the  said 
bureau  a  chief  clerk  and  such  special  agents,  clerks,  and  other 
employees  as  may  be  authorized  by  law. 

The  said  Commissioner  shall  have  power  and  authority  to 
make,  under  the  direction  and  control  of  the  Secretary  of 
Commerce  and  Labor,  diligent  investig:ation  into  the  orginiza- 
tion,  conduct,  and  management  of  the  business  of  any  corpo- 
ration, joint  stock  company,  or  corporate  combination  engaged 
in  the  commerce  among  the  several  States  and  with  foreign 
nations,  excepting  common  carriers  subject  to  ''An  Act  to  reg- 
ulate commerce,"  approved  February  fourth,  eighteen  hundred 
and  eighty-seven,  and  to  gather  such  information  and  data  as 
will  enable  the  President  of  the  United  States  to  make  recom- 
mendations to  Congress  for  legislation  for  the  regulation  of 
such  commerce,  and  to  report  such  data  to  the  President  from 
time  to  time  as  h6  shall  require;  and  the  information  so  ob- 
tained or  as  much  thereof  as  the  President  may  direct,  shall  be 
made  public. 

In  order  to  accomplish  the  purposes  declared  in  the  foregoing 
part  of  this  section,  the  said  Commissioner  shall  have  and 
exercise  the  same  power  and  authority  in  respect  to  corpora- 
tions, joint  stock  companies,  and  combinations  subject  to  the 
provisions  hereof,  as  is  conferred  on  the  Interstate  Commerce 
Commission  in  said  "Act  to  regulate  commerce"  and  the 
amendments  thereto,  in  respect  to  common  carriers  so  far  as 
the  same  ma^^  be  applicable,  including  the  right  to  subpoena 
and  compel  the  attendance  and  testimony  of  witnesses  and  the 
production  of  documentary  evidence  and  to  administer  oaths. 
All  the  requirements,  obligations,  liabilities,  and  immunities 
imposed  or  conferred  by  said  "Act  to  regulate  commerce"  and 
by  "An  Act  in  relation  to  testimony  before  the  Interstate 
Commerce  Commission,"  and  so  forth,  approved  February 
eleventh,  eighteen  hundred  and  ninety-three,  supplemental  to 
said  "Act  to  regulate  commerce,"  shall  also  apply  to  all  per- 
sons who  may  be  subpanaed  to  testify  as  witnesses  or  to  pro- 
duce documentary  evidence  in  pursuance  of  the  authority  con- 
ferred by  this  section. 

It  shall  also  be  the  province  and  duty  of  said  Bureau,  under 
the  direction  of  the  Secretary  of  Commerce  and  Labor,  to 
gather,  compile,  publish,  and  supply  useful  information  con- 
cerning corporations  doing  business  within  the  limits*  of  the 
United  States  and  shall  engage  in  interstate  commerce  or  in 


§    496]  THE   DEPARTMENT    OF    COMMERCE    AND   LABOR.  585 

commeree  between  the  United  States  and  any  foreign  country, 
including  corporations  engaged  in  insurance,  and  to  attend  to 
such  other  duties  as  may  be  hereafter  provided  by  law. 

§  496  (353).  The  remaining  sections  of  the  act. — Section  7 
deals  with  the  control  of  the  fur-seal  and  other  Alaskan  lisherie.s, 
the  iinniigi'ation  of  aliens;  section  8  with  the  annual  reports  to 
congress  and  special  investigations  and  reports;  section  9  with 
the  custody  of  tlie  department  buildings,  property,  records, 
etc.  Section  10  with  the  transfer  of  duties  and  powers  of  heads 
of  executive  departments,  and  their  duties,  powers,  etc.,  for  the 
secretary  of  the  treasury,  seamen,  shipping,  etc.  Section  11 
provides  for  the  co-operation  of  the  state  department  in  the 
matter  of  consular  reports.  Section  12  provides  for  the  trans- 
fer to  this  department  of  offices,  bureaus,  etc.,  engaged  in  scien- 
tific work  to  this  department.  The  remaining  sections  of  the 
act  dealt  with  the  time  of  taking  effect  of  the  transfers  pro- 
vided for  and  for  the  administrative  details  in  the  matter  of 
appropriations,  transfer  of  officers,  clerks,  etc.,  and  the  occupa- 
tion of  buildings.     See  supra,  §  59. 


THE  SAFETY  ACT  OP  1893,  AMENDED  1896. 

Section  1. 

§  497.  Section  1  of  the  act. 

498.  Railroads  subject  to  the  act. 

499.  The  common  law  duty  of  the  carrier  in  relation  to  safety  ap- 

pliances. 

500.  Petition  and  procedure  under  the  act. 

501.  Federal  question  in  suits  under  the  act. 

502.  The  act  in  the  state  courts. 

AN  ACT  To  promote  the  safety  of  employees  and  travelers  upon  rail- 
roads by  compelling  common  carriers  engaged  in  interstate  com- 
merce to  equip  their  cars  with  automatic  couplers  and  continuous 
brakes  and  their  locomotives  with  driving-wheel  brakes,  and  for 
other  purposes. 

§  497  (354).  Driving-wheel  and  train  brakes.     Be  it  enacted 

by  the  Senate  and  House  of  lUpresentaiives  of  tlie  United  States 
of  America  in  Congress  assembled:  Sec.  1.  That  from  aud  after 
the  first  day  of  January,  eighteen  hundred  and  ninety-eight, 
it  shall  be  unlawful  for  any  common  carrier  engaged  in  inter- 
state commerce  by  railroad  to  use  on  its  line  any  locomotive 
engine  in  moving  interstate  traffic  not  equipped  with  a  power- 
driving-wheel  brake  and  appliances  for  operating  the^  train- 
brake  system,  or  to  run  any  train  in  such  traffic  after  said  date 
that  has  not  a  sufficient  number  of  cars  in  it  so  equipped  with 
power  or  train  brakes  that  the  engineer  on  the  locomotive 
drawing  such  train  can  control  its  speed  without  requiring 
brakemen  to  use  the  com^mon  hand  brake  for  that  purpose. 

§  498  (355).  Railroads  subject  to  the  act. — This  act,  as  also 
the  Accident  law,  is  made  applicable  to  any  common  carrier 
engaged  in  interstate  commerce  by  railroad,  while  the  Inter- 
state Commerce  Act  applies  only  to  the  interstate  traffic  of  rail- 
road carriers,  except  in  the  requirement  of  annual  reports  under 
section  20  of  that  act.  In  United  States  v.  Geddes,  131  Fed. 
452  (1904),  C.  C.  A.,  sixth  circuit,  which  was  a  suit  on  behalf 
of  the  United  States  for  the  recovery  of  penalties  under  this 
act,  the  court  held  that  a  narrow  gauge  railroad  wholly  in  Ohio 
which  connected  at  one  of  its  termini  with  an  interstate  road 
but  neither  shipped  nor  received  any  traffic  under  a  through 
bill  of  lading,  or  any  other  arrangement,  and  charged  local 

[586] 


§  498]     THE  SAFETY  ACT  OF  1893,  AMENDKU  1890.        587 

freiglit  tarifTs  on  its  own  lino,  assuniinf?  payiiiont  of  the  Balti- 
more &  Oliio  advance  charges  with  wc(.'kly  settlements  was  not 
engaged  in  interstate  commerce  wilhin  the  meaning  of  this  act, 
and  was  tliercfore  not  subject  to  penalties  for  non-compliance. 
The  court  said  that  under  the  rulings  of  the  supreme  court,  ex- 
press and  sleei)ing  car  and  railroad  companies  were  limited  to 
the  nature  of  their  business,  making  it  local  or  interstate  or  both 
as  they  pleased,  and  that  assuming  the  payment  of  the  charges 
of  the  delivering  road  did  not  constitute  a  continuous  carriage 
necessary  to  make  the  business  of  interstate  commerce.  See  also 
180  Fed.  480. 

But  a  stock  yards  company  owning  and  maintaining  a  live 
stock  depot  of  all  railroad  companies  doing  business  at  that 
point,  and  owning  and  maintaining  several  miles  of  track  con- 
necting with  several  railroad  companies,  and  which  by  its  own 
locomotives  and  servants  transports  for  hire  over  its  tracks  ship- 
ments accepted  by  other  railroad  companies,  is  a  common  carrier 
within  the  meaning  of  the  Safety  Appliance  law,  although  the 
ears  in  which  it  transports  such  shipments  are  in  every  instance 
the  cars  of  the  other  companies,  and  although  the  stockyards 
company  receives  its  compensation  from  the  railroads  and  not 
the  shippers.  Union  Stockyards  Co.  v.  U.  S.,  169  Fed.  40*1 
(1909),  C.  C.  A.,  eighth  circuit,  affirming  161  Fed.  919. 

The  same  decision  was  made  in  the  circuit  court  of  the  seventh 
circuit  as  to  the  belt  railroad  in  Cook  county,  Illinois,  forming 
connections  with  trunk  lines  and  acting  only  as  an  agent  for  the 
trunk  lioe,  see  1G8  Fed.  542  (1909).  to  move  a  train  of  freight 
cars  containing  one  from  a  point  on  one  railroad  in  Illinois  to 
a  point  on  another  railroad  in  Wisconsin.  Such  a  tra.isfer  con- 
stituted in  effect  a  continuous  carriage  over  both  the  roads  and 
defendant  was  therefore  engaged  in  interstate  commerce  and 
within  the  Safety  Appliance  Act. 

In  U.  S.  V.  Southern  Railway,  164  Fed.  347,  district  court  of 
Alabama  (1908),  the  act  was  broadly  held  to  apply  to  all  ve- 
hicles running  on  interstate  highway,  and  that  it  was  immaterial 
that  the  cars  were  loaded  with  commodities'  from  one  point  to 
another  in  the  same  state,  and  that  it  was  sufficient  that  the  cars 
were  hauled  over  a  portion  of  the  interstate  highway. 

It  was  also  held  in  the  circuit  court  of  appeals  of  the  ninth 
circuit,  Pacific  Coast  Ry.  Co.  v.  U.  S.,  173  Fed.  448   (1909). 


588  THE   SAFETY   ACT   OF    1893,    AMENDED    ]896.  [SECTION   1 

that  the  act  applies  to  a  railroad  which  takes  part  in  the  transpor- 
tation of  interstate  commerce  on  any  point  of  its  way  to  the 
point  of  final  destination,  thoiigli  operated  wholly  within  a  single 
state,  independently  o£  connecting  lines  and  without  any  traffic 
arrangement.  See  also  U.  S.  v.  Colorado,  etc.,  Co.,  157  Fed.  321, 
C.  C.  eighth  circuit  (1907),  where  the  same  ruling  is  made  as 
to  the  transportation  for  an  independent  express  company  by 
railroad  operating  entirely  within  the  state  if  the  articles  car- 
ried are  for  continuous  passage  to  or  from  places  out  of  the 
state;  and  it  is  immaterial  that  the  property  is  carried  free  or 
from  a  common  control  of  management  or  arrangement  with 
another  carrier. 

See  also  U.  S.  v.  International,  etc.,  Co.,  174  Fed.  638  (1909), 
circuit  court  of  appeals  of  the  fifth  circuit. 

§  499  (356).  The  commoii  law  duty  of  the  carrier  in  relation 
to  safety  appliances. — It  was  held  by  the  supreme  court  of 
North  Carolina  that  the  action  of  the  Interstate  Commerce 
Commission  in  extending  the  date  at  which  the  act  should  go 
into  force  could  not  set  aside  the  principle  of  law  that  failure 
to  provide  the  appliances  was  negligence  per  se,  and  that  such 
postponement  could  not  have  any  other  effect  than  to  post- 
pone the  date  at  which  the  use  would  impose  the  penalty  for 
failure  to  do  so.  In  other  words,  that  the  court  would  take 
notice  of  the  act  as  establishing  by  legislative  recognition  a 
measure  of  legal  duty  of  the  railroad  company  in  providing 
safe  appliances,  that  is,  modern  self-coupling  devices,  for  its 
emeployes.  Troxler  v.  Southern  Ry.  Co.,  122  N.  C.  902,  44 
L.  R.  A.  313  (1899).  See  also  Greenlee  v.  Southern  Railway 
Co.,  122  N.  C.  982,  41  L.  R.  A.  99  (1899). 

In  Schlemmer  v.  R.  R.  Co.,  207  Pa.  198  (1907),  the  court  inti- 
mated that  it  was  doubtful  whether  the  act  had  any  applicabil- 
ity to  actions  for  negligence  in  Pennsylvania,  but  did  not  decide 
this  point  as  the  plaintiff  was  non-suited  for  contributory  negli- 
gence. This  judgment,  however,  was  reversed  by  the  supreme 
court  of  the  United  States,  205  U.  S.  1,  51  L.  Ed.  681,  on  the 
ground  that  this  ruling  of  the  state  court  was  inconsistent  with 
the  provision  of  section  8  of  the  act  as  to  non-assumption  of 
risk. 

In  New  England  Railroad  Co.  v.  Conroy,  175  U.  S.  323,  44 
L.  Ed.  181  (1899),  a  case  not  arising  under  the  act,  but  involv- 


§    501 J  THE    SAFETY    ACT    OF    1893,    AMENDED    lb*J6.  589 

ing  tlie  question  of  the  responsibility  of  the  engineer,  the 
court  said  that  as  railroads  are  now  operated,  the  engineer  is  a 
much  more  important  functionary  in  the  actual  movements  of 
the  train  than  the  conductor,  and  particularly  has  this  become 
the  case  since  tihe  introduction  of  the  air  brake  train  system, 
and  the  court  referred  to  the  first  section  of  this  act  of  ]\Iarcli 
2,  1893,  providing  for  air  brakes  under  the  control  of  the  en- 
gineer, saying:  "We  do  not  refer  to  this  statute  as  directly 
applicable  to  the  case  in  hand,  but  as  a  legislative  recognition 
of  the  dominant  position  of  the  engineer."  See  also  Northern 
Pacific  R.  R.  Co.  v.  Tynan,  56  C.  C.  A.  192,  119  Fed.  288  (1902), 
wliere  the  court  says  that  prior  to  the  passage  of  this  act  there 
had  been  numerous  decisions  rendered  by  the  courts  of  this 
country,  where  it  was  held  that  the  railroad  companies  were 
guilty  of  negligence  in  using  the  I\liller  coupler  in  connection 
with  tlie  ordinary  link  draw  bars.  See  also  Texas  &  Pacific  R. 
Co.  V.  Archibald,"  170  U.  S.  665,  42  L.  Ed.  1188  (1898). 

§  500  (357).  Petition  and  procedure  under  the  act. — Hold 
in  Voelker  v.  R.  R.  Co.,  116  Fed.  867  (1902),  and  affirmed  on  this 
point  by  the  court  of  appeals,  that  it  is  not  necessary  for  the 
petition  for  personal  injuries  suffered  under  violation  of  the 
act  to  refer  to  the  act,  although  the  burden  is  on  the  plaintiff 
to  show  that  the  car  on  which  he  was  injured  was  engaged  in  in- 
terstate commerce,  Winkler  v.  Pennsylvania  R.  Co.  (Del.),  53 
Atl.  90 ;  and  it  is  a  question  for  the  jury  whether  railroad  com- 
panies comi)ly  with  the  act.  Crawford  v.  Railroad  Co.,  10  Am. 
Negligence  Reps.  166. 

§  501  (358).  Federal  question  in  suits  under  the  act.— The 
instruction  by  a  court  to  a  jury  that  railroads  are  required  to 
keep  their  appliances  in  good  and  suitable  order,  raised  no  ques- 
tion under  the  act  so  as  to  make  a  claim  of  a  federal  right  under 
section  709.  R.  S..  which  can  be  the  basis  of  a  writ  of  error  from 
the  supreme  court  to  the  highest  court  of  the  state.  Southern 
Ry.  Co.  V.  Carson,  194  U.  S.  136,  48  L.  Ed.  907  (1904).  It  was 
objected  in  this  ease  that  the  instructions  in  the  state  court  as- 
sumed that  if  the  automatic  coupling  was  out  of  order  the  com- 
pany failed  to  comply  witli  the  act  of  congress,  and  the  supreme 
court  of  the  state  held  that  there  was  no  error  in  this,  as  con- 
gress must  have  intended  that  the  couplers  should  have  been 


590  THE   SAFETY   ACT    OF    1893,    AMENDED    1896.  [SECTION    1 

kept  in  proper  repair  for  use,  and  moreover  as  sucli  was  the  law 
of  the  state,  even  if  the  act  of  congress  had  not  specifically  im- 
posed this  duty.  The  court  said  that  in  this  ruling  no  right 
was  specifically  set  up  or  claimed  under  the  act  of  congress,  and 
the  writ  of  error  was  dismissed. 

§  502.  The  act  in  the  state  courts. — As  there  is  no  exclusive 

jurisdiction  vested  by  the  act  in  the  federal  courts  its  effect  is  to 
create  a  new  standard  of  duty  and  liability  in  interstate  com- 
merce, which  is  the  law  of  the  land  both  as  to  the  federal  and 
state  courts.  This  was  illustrated  in  the  Schlemmer  Case,  supra, 
wherein  the  supreme  court  of  Pennsylvania  held  that  the  plain- 
tiff was  barred  from  recovering  by  reason  of  his  own  contribu- 
tory negligence,  which  was  reversed  by  the  supreme  court  of  the 
United  States  on  the  ground  that  this  ruling,  which  was  in  con- 
formity with  that  enforced  in  the  courts  of  the  state  in  actions 
for  personal  injuries,  was  inconsistent'  with  the  rule  of  non- 
assumption  of  risk  which  was  declared  by  the  Safety  Act  and 
was  applicable  to  the  interstate  employment  wherein  plaintiff 
was  engaged.  As  this  federal  right  was  duly  asserted  in  the 
case  and  denied  a  federal  question  was  presented  and  the  judg- 
ment of  the  state  court  was  reviewable  by  the  supreme  court. 
See  same  case,  second  appeal,  infra,  §  523. 


§    504]  THE   SAFETY    ACT    OF    1803,    AMENDED    189(J.  5'Jl 


Section  2. 

§  503.  Section  2  of  the  act. 

504.  Coupler  equipment  under  section  2. 

505.  Automatic  couplers  of  different  makes. 

506.  The  meaning  of  "car"  in  section  2. 

507.  An  absolute  duty  imposed  upon  carriers  by  the  act  to  provide 

and  maintain  automatic  equipment. 

508.  When  cars  are  in  interstate  commerce. 

§  503  (359).  Automatic  couplers.— Sec.  2.  Tliat  on  and 
after  the  lirst  day  of  January,  eighteen  luindred  and  ninety- 
eight,  it  shall  be  unlawful  for  any  such  connnou  carrier  to  haul 
or  permit  to  be  hauled  or  used  on  its  line  any  car  used  in  moving 
interstate  traffic  not  equipped  with  couplers  coupling  automatic- 
ally by  impact,  and  which  can  be  uncoupled  without  the  ne- 
cessity of  men  going  between  the  ends  of  cars. 

§  504  (360).  Coupler  equipment  under  section  2. — The  re- 
quirement of  automatic  couplers  in  section  2  was  construed  by 
the  circuit  court  of  appeals  for  the  eighth  circuit  in  Chicago, 
Milwaukee  &  St.  Paul  K.  Co.  v.  Voelker,  129  Fed.  522,  reversing 
116  Fed.  867,  decided  March,  1904.  The  court  said  that  the  act 
of  congress  forbade  the  use  of  a  coupler  which  required  the 
operator  to  go  between  the  ends  of  the  cars  to  prepare  the  coupler 
for  the  impact.  The  preparation  of  the  coupler  for  the  impact 
is  not  distinct  from  the  act  of  coupling.  Both  are  connected  with 
the  indispensable  parts  of  the  larger  act,  which  is  regulated  by 
the  statute  and  the  performance  of  which  is  intended  to  be  re- 
leased from  unnecessary  risk  and  danger.  The  court  ruled  that 
when  an  automatic  car  coupler  had  been  permitted  to  become 
worn  and  defective  so  the  lever  would  not  lift  the  pin  from  the 
socket,  and  the  knuckle  could  not  be  drawn  open  by  leaning 
toward  the  coupler  and  using  one  hand,  but  required  the  pres- 
ence of  the  operator's  entire  body  between  the  ends  of  the  cars 
and  the  draw  bars  and  the  use  of  both  his  hands,  it  failed  to 
meet  the  requirements  of  the  act  and  constituted  actionable  negli- 
gence. 

It  was  hold  in  Briggs  v.  C,  N.  &  W.  R.  Co..  125  Fed.  745 
(190.3),  that  when  a  railroad  company  in  order  to  comply  with 
section  2  of  the  act  removed  the  long  pilot  from  in  front  of  the 


592  THE    SAFETY    ACT    OF    1893,    AMENDED    1896.  [SECTION    2 

engine  and  substituted  a  shorter  one  in  order  to  put  tlie  auto- 
matiee  coupler  in  front  of  the  engine,  an  accident  which  could 
have  been  prevented  by  a  long  pilot  does  not  make  the  com- 
pany liable. 

§  505  (361).  Automatic  couplers  of  different  makes. — The 

amendment  of  1903  provides  that  the  act  shall  apply  in  all 
cases  whether  or  not  the  couplers  brought  together  are  the  same 
kind,  make  or  title,  and  the  provisions  and  requirements  relating 
to  train  brakes,  automatic  couplers,  grab  irons  and  the  height 
of  draw  bars  apply  to  all  trains,  locomotive  tenders  and  cars,  and 
similar  vehicles  used  on  any  railroad  in  interstate  commerce  and 
saving  those  excepted  by  the  act. 

In  a  suit  brought  prior  to  the  amendment  of  1903  it  was  held 
by  the  supreme  court  in  Johnson  v.  Southern  Pacific  R.  Co.,  196 
U.  S.  1,  49  L.  Ed.  363  (1904),  reversing  the  circuit  court  of  the 
eighth  circuit  in  117  Fed.  462,  that  the  couplers  required  must 
be  of  such  a  nature  and  character  thkt  they  must  couple  auto- 
matically and  save  the  employes  from  going  between  the  cars, 
and  that  the  use  of  automatic  couplers  which  did  not  couple  au- 
tomatically on  the  same  train  whether  of  the  same  make  or  not 
violated  the  act. 

As  stated  ^bove  however  this  requirement  is  now  enforced  by 
the  amended  statute  of  1903. 

§  503  (362).  The  meaning  of  "car"  in  section  2.— In  the 

same  case  the  term  "car"  as  used  in  section  2,  which  was  held 
by  a  majority  of  the  court  of  appeals,  Thayer,  J.,  dissenting,  not 
to  include  locomotives,  and  that  there  was  no  language  in  the 
act  which  would  make  it  unlawful  to  use  in  interstate  commerce 
locomotive  engines  which  were  not  equipped  with  automatic 
couplers.  This  ruling  was  reversed  by  the  supreme  court  which 
held  that  the  law  must  be  construed  with  reference  to  the  danger 
to  employes  which  it  sought  to  remedy,  and  that  for  the  pur- 
poses of  safety  appliances,  locomotives  were  cars  within  the 
meaning  of  the  act  and  are  required  to  be  equipped  with  auto- 
matic couplers,  and  that  it  was  even  more  necessary  that  locomo- 
tives should  be  so  equipped  than  it  was  that  freight,  dining  and 
passenger  cars  should  be,  since  locomotives  had  occasion  to  make 
couplings  more  frequently.  The  word  car  was  therefore  used  in 
a  generic  sense  as  including  both  the  locomotive  and  its  tender. 
In  the  Schlemmer  Case,  supra,  the  court  reaffirmed  the  ruling 
of  the  Johnson  Case  and  said  that  a  shovel  ear  attached  to  an 


§    507]  THE   SAFETY    ACT    OE    1803,    A.MKNDED    ISfJG.  593 

intei-state  train  was  witliin  the  meaning  of  tlie  statute  as  well  as 
the  locomotive,  and  that  the  words,  "used  in  moving  interstate 
traflfic,"  should  not  be  taken  in  a  narrow  sense;  and  the  supreme 
court  of  Pennsylvania  was  held  to  have  erred  in  liolding  that 
such  a  car  was  not  within  the  meaning  of  the  section.  The  court 
said  tlie  amendatory  act  of  March  2,  1903,  indicated  tlic  intent 
of  the  original  act. 

§  507.  An  absolute  duty  imposed  upon  carriers  by  the  act  to 
provide  and  maintain  automatic  equipment. — An  absolute  dut\- 
to  provide  a  car  used  in  mo\iug  interstate  traffic  with  automatic 
couplers  and  to  maintain  them  in  proper  condition  at  all  times 
and  in  all  conditions  is  imposed  upon  interstate  carriers  by  this 
act,  which  is  not  discharged  by  properly  equipping  the  car  with 
automatic  couplers  and  using  due  diligence  to  keep  them  in  good 
working  order.     This  rule  of  absolute  duty  was  definitely  de- 
clared by  the  supreme  court  in  a  prosecution  by  the  government 
for  penalty  for  non-compliance  with  the  act  under  section  6  of 
the  act,  C.  B.  &  Q.  R.  Co.  v.  U.  S.,  220  U.  S.  612,  55  L.  Ed.  — 
(June,  1911),  and  also  in  private  actions  by  employes  for  per- 
sonal injuries  sustained  through  the  absence  of  defective  condi- 
tions of  the  automatic  couplers  required  by  the  act.     St.  L.,  I. 
&  M.  R.  Co.  V.  Taylor,  210  U.  S.  281,  52  L.  Ed.  lOfil  (1009).  and 
also  in  Delk  v.  St.  L.  &  St.  F.  R.  Co.,  220  U.  S.  617,  55  L.  Ed.  — 
(June,  1911).     In  the  latter  case  the  court  reversed  the  judg- 
ment of  the  circuit  court  of  appeals  of  the  sixth  circuit,  158  Fed. 
931.     The  court  said  in  the  latter  cnse  that  this  absolute  duty 
not  only  required  the  carrier  to  provide  the  automatic  couplers, 
the  kind  prescribed  by  congress,  but  also  an  absolute  duty  to 
keep  the  cars  in  good  order  at  all  times.    In  this  case  the  car  had 
a  defective  coupler  and  the  company  had  sent  for  the  required 
appliances  and  would  repair  the  car  when  it  was  received,  but 
the  court  said  the  conii)any  could  only  use  the  car  in  this  defect- 
ive condition  under  the  penalty  of  the  law.  and  as  the  injury 
was  suffered  by  the  employe  in  attempting  to  force  a  coupling 
in  this  defective  condition  the  company  was  liable. 

In  this  Delk  Case  the  trial  court  had  submitted  the  issue  of 
contributory  negligence  to  the  jury  which  rendered  a  verdict 
for  plaintiff.  This  was  reversed  by 'the  circuit  court  of  appeals 
and  the  case  taken  to  the  supreme  court  by  Avrit  of  certiorari. 
The  supreme  court  reversed  the  judgment  of  the  circuit  court 
of  appeals  and  affinnod  the  judgment  of  the  circuit  court. 
38 


594  THE   SAFETY   ACT    OF    1893,    AMENDED    1896.  [SECTION    2 

§  508  (363).  When  cars  are  in  interstate  commerce. — An- 
other important  ruling  was  made  in  the  Johnson  case.  The  in- 
jury in  this  case  was  caused  in  coupling  a  freight  engine  with 
a  dining  car  which  had  been  detached  from  a  through  train, 
turned  on  the  turn-table  and  was  to  be  drawn  by  a  freight  engine 
to  the  turn-table,  turned^  and  then  moved  to  a  side  track  to  wait 
another  through  train  moving  in  the  opposite  direction.  As  the 
car  was  standing  empty  on  the  side  track  when  the  plaintiff  was 
injured,  the  majority  of  the  court  held  that  it  was  not  engaged 
in  interstate  commerce,  and  therefore  at  the  time  of  the  accident 
the  locomotive  anc  dining  car  were  not  being  used  in  moving 
interstate  traffic  within  the  meaning  of  the  act.  The  supreme 
court  in  the  case  cited,  and  in  the  same  opinion,  reversed  this 
decision,  and  held  that  the  dining  ear,  though  empty  and  on  a 
side  track,  was  engaged  in  interstate  commerce  within  the  mean- 
ing of  the  act. 

In  the  Delk  Case,  supra,  it  was  held  by  the  supreme  court  that 
a  freight  car,  loaded  with  interstate  freight  and  placed  on  a  side 
track  in  the  railway  yard  at  destination  to  await  repairs  to  the 
automatic  coupler,  was  used  in  moving  interstate  commerce 
within  the  meaning  of  the  act  when  a  coupling  with  another 
car  is  thereafter  attempted  by  the  carrier's  order  during  the 
course  of  switching  operations. 

Thus,  it  is  immaterial  whether  the  car  is  full  or  emptey.  See 
Johnston  v.  Great  Northern  Railway  Co.,  178  Fed.  643,  circuit 
court  of  appeals,  eighth  circuit  (1910).  In  this  case  the  cars 
were  awaiting  delivery  on  the  switch  track,  and  tin-  company 
was  held  liable.  See  U.  S.  v.  L.  &  N.  R.  R.  Co.,  186  Fed.  280, 
C.  C.  A.,  sixth  circuit. 

In  Southern  Railway  Co.  v.  Snyder,  187  Fed.  492,  sixth  cir- 
cuit (1911),  the  court  held  that  cars  being  hauled  to  a  place 
of  repair  in  an  intrastate  train  composed  only  of  sucli  cars,  or 
while  on  a  repair  track  out  of  all  connection  with  cars  in  com- 
mercial use,  were  not  subject  to  the  act,  and  that  while  a  rail- 
road could  move  empty  cars  by  themselves  to  repair  shops,  yet 
in  so  moving  them  the  cars  must  be  wholly  excluded  from 
commercial  use  and  from  connection  with  other  vehicles  which 
were  commercially  used.  The  court,  however,  emphasized  the 
duty  of  the  carrier  to  exercise  a  high  degree  of  diligence  in 
discovering  and  repairing  the  defect  in  the  coupler  and  with- 
drawing the  car  from  commercial  use  while  the  defect  existed. 


§    508]  THE    SAFETY    ACT    OF    18!J:J,    AMENDED    189G.  595 

The  court  lield  that  it  was  a  question  for  the  jury  whether  the 
cars  liad  been  in  fact  withdi-awn  from  commercial  interstate 
use  at  tlie  time  of  tlie  injury  to  plaintiff. 

In  U.  S.  V.  C.  &  N.  W.  K.  Co.,  157  Fed.  GIG,  district  court  of 
Nebraska,  it  was  held  tiiat  under  this  act  as  amended  in  ]\Iarch, 
190.3,  there  was  no  room  for  distinction  in  a  car  actually  engaged 
in  interstate  commerce  and  the  hauling  of  one  that  is  generally 
used  therein,  and  that  the  hauling  of  an  empty  car  from  one 
state  to  another  for  purposes  of  repair  was  engaging  in  inter- 
state commerce,  and  that  an  engine  was  a  car  within  the  mean- 
ing of  the  act.  See  also  AVabash  v.  U.  S.,  168  Fed.  1,  C.  C.  A., 
seventh  circuit  (1909),  where  the  same  ruling  was  made.  In 
this  case  the  court  construed  the  word  ''used"  as  applying  to 
all  cars  and  trains  operated  over  an  interstate  highway,  whether 
they  were  operated  between  points  in  the  same  states  or  whether 
they  were  empty,  or  whether  the  traffic  carried  is  interstate 
traffic  or  not.  See  also  U.  S.  v.  St.  Louis,  etc.,  Co.,  district 
court  of  Tennessee,  154  Fed.  516  (1906). 

In  Erie  R.  Co.  v.  Russell,  183  Fed.  722,  the  circuit  court  of  ap- 
peals, second  circuit  (Dec,  1910),  held  that  a  car  with  a  defect- 
ive coupler  billed  for  the  repair  shop  which  was  not  sent  there 
but  was  left  on  the  track  in  ordinary  use  on  the  switching  track 
to  be  repaired  by  the  switchmen,  and  that  car  coupled  to  other 
cars  were  being  ''used"  within  the  meaning  of  the  statute;  and 
where  such  a  car,  though  empty,  was  brought  into  the  station 
in  an  interstate  train  it  was  -being  used  in  interstate  commerce, 
not  only  while  being  moved  in  the  train  but  also  while  being 
repaired  in  the  yards.  In  an  action  to  recover  for  death  of  a 
switchman  killed  in  repairing  the  defective  coupler,  the  question 
of  whether  the  defective  coupler  was  the  proximate  cause  of 
his  death  was  held  properly  submitted  to  tlie  jury,  as  was  also 
the  question  of  contributory  negligence,  and  the  judgment  for 
plaintiff  was  affirmed. 

In  Southern  Ry.  Co.  v.  U.  S.,  decided  Nov.  1911,  it  was  held 
by  the  supreme  court  that  the  law  applies  to  all  equipment  on  a 
highway  of  interstate  commerce,  whether  at  the  time  the  car  is 
carrying  state  or  interstiite  commerce,  and  that  the  act  so  con- 
strued was  within  the  constitutional  power  of  congress.  See 
also  U.  S.  V.  Western  &  A.  R.  R.  Co.,  184  Fed.  336  (1910),  Dist. 
Ct.  N.  D.  of  Georgia. 


596  THE   SAFETY   ACT   OF    1893,    AMENDED    1896.  [SECTION    i 


Section  3. 

§  509.  Section  3  of  the  act. 
510.  The  use  of  defective  cars  forbidden. 

§  509  (364).  When  carriers  may  refuse  to  receive  cars. — 

Sec.  3.  That  when  any  person,  firm,  company,  or  corporation  en- 
gaged in  interstate  commerce  by  railroad  shall  have  equipped  a 
sufficient  number  of  its  cars  so  as  to  comply  with  the  provisions 
of  section  one  of  this  act,  it  may  lawfully  refuse  to  receive  from 
connecting  lines  of  road  or  shippers  any  cars  not  equipped  suf- 
ficiently, in  accordance  with  the  first  section  of  this  act,  with 
such  power  or  train  brakes  as  will  work  and  readily  interchange 
with  the  brakes  in  use  on  its  own  cars,  as  required  by  this  act. 

§  510  (366).  The  use  of  defective  cars  forbidden.— The  pro- 
hibition of  the  statute  is  against  the  use,  and  not  against  the  own- 
ership of  a  car,  defective  in  its  required  equipment.  There  is  no 
right  of  recovery  by  a  terminal  railroad,  which  has  been  mulcted 
in  damages  in  a  suit  by  an  employe  for  injuries  sustained  in 
handling  a  car,  wanting  in  equipment,  from  the  carrier  company 
owning  the  car ;  as  it  was  its  duty  to  refuse  to  receive  the  defect- 
ive car ;  and  therefore  it  was  so  far  a  wrong  doer  that  it  could  not 
recover  over  from  the  owning  company.  Union  Stockyards  of 
Omaha  v.  C.  B.  &  Q.  R.  R.  Co.,  196  U.  S.  217,  49  L.  Ed.  453 
(1905).  This  case  did  not  arise  under  the  Safety  Act,  but  was 
decided  under  the  common  law  principles,  with  reference  to 
the  duty  of  the  carrier  and  the  right  of  contribution  in  case  of 
damages  for  neglect  of  duty. 


§  512]     THE  SAFETY  ACT  OF  1893,  AMENDED  1896.        597 


Section  4. 

§  511.  Section  4  of  the  act. 
512.  Construction  of  section. 

§  511  (365).  Grab  irons  and  handholds.— Sec.  4.  That  from 
and  after  tlie  first  day  of  July,  eighteen  hundred  and  ninety-five, 
until  otherwise  ordered  by  the  Interstate  Commerce  Commission, 
it  sliall  be  unlawful  for  any  railroad  company  to  use  any  car  in 
interstate  eonuneree  that  is  not  provided  with  secure  grab  irons 
or  handholds  in  tiie  ends  and  sides  of  each  ear  for  greater  secur- 
ity to  nicu  in  coupling  and  uncoupling  cars. 

-  §  512.  Construction  of  section.— In  U.  S.  v.  B.  &  0.  R.  R.  Co., 
district  court.  W.  D.  of  Virginia,  November,  1910,  184  Fed.  94, 
the  court  held  that  this  section  was  indefinite  as  to  the  number  of 
handholds  and  as  to  the  intended  location  thereof  on  the  ends  and 
sides  of  cars.  It  was  not  indefinite  so  far  as  it  required  handholds 
to  be  provided  both  on  the  ends  and  sides  of  cars,  and  that  a  yard 
engine  used  in  interstate  commerce  was  not  equipped  as  required 
where  no  handholds  were  provided  in  the  sides  near  the  rear  end 
of  the  tendoi-,  though  the  tender  was  equipped  with  a  running 
board  and  an  uncoupling  level  bar  which  ran  nearly  across  the 
entire  back  of  the  tender  and  was  so  located  and  of  such  a  char- 
acter that  it  might  serve  as  a  handhold ;  it  not  appearing  that  the 
presence  of  the  handhold  as  required  would  not  tend  to  greater 
security. 


598  THE   SAFETV    ACT    OF    1893,    AMENDED    1896,  [SECTION    5 


Section  5. 

§  513.  Section  5  of  the  act. 
514.  The  delegation  of  power  sustained. 

§  513  (367).  Standard  height  of  drawbars  for  freight  cars. — 

Sec.  5.  That  witliin  ninety  days  from  the  passage  of  this  act 
the  American  Railway  Association  is  authorized  hereby  to  desig- 
nate to  the  Interstate  Commerce  Commission  the  standard  height 
of  drawbars  for  freight  cars,  measured  perpendicular  from  the 
level  of  the  tops  of  the  rails  to  the  centers  of  the  drawbars,  for 
each  of  the  several  guages  of  railroads  in  use  in  the  United  States, 
and  shall  Sx  a  maximum  variation  from  such  standard  height  to 
be  allowed  between  the  drawbars  of  empty  and  loaded  cars.  Upon 
their  determination  being  certified  to  the  Interstate  Commerce 
Commission,  said  Commission  shall  at  once  give  notice  of  the  stan- 
dard fixed  upon  to  all  common  carriers,  owners,  or  lessees  engaged 
in  interstate  commerce  in  the  United  States  by  such  means  as  the 
Commission  may  deem  proper.  But  should  said  association  fail 
to  determine  a  standard  as  above  provided,  it  shall  be  the  duty 
of  the  Interstate  Commerce  Connnission  to  do  so,  before  July 
first,  eighteen  hundred  and  ninety-four,  and  immediately  to  give 
notice  thereof  as  aforesaid.  And  after  July  first,  eighteen  hun- 
dred and  ninety-five,  no  cars,  either  loaded  or  unloaded,  shall 
be  use  in  interstate  traffic  which  do  not  comply  with  the  standard 
above  provided  for.* 

§  514.  The  delegation  of  power  sustained. — Legislative  power 
is  not  unconstitutionally  delegated  to  the  American  Railway  As- 
sociation and  the  Interstate  Commerce  Association  by  this  sec- 
tion. St.  Louis,  I.  M.  &  S.  R.  Co.  V.  Taylor,  210  U.  S.  281,  52  L. 
Ed.  1061  (1907).  The  court  said  that  whether  or  not  legisla- 
tive power  was  unconstitutionally  delegated  was  a  federal  ques- 
tion which  allowed  a  writ  of  error  from  the  supreme  court  to 
the  supreme  court  of  Arkansas;  but  the  court  found  that  the 
legislative  power  was  not  unconstitutionally  delegated,  and  that 
the  state  court  erred  in  holding  that  under  the  section  the  draw 
bars  of  unloaded  freight  cars  are  required  to  be  of  uniform  and 
standard  height,  but  those  of  loaded  cars  need  not  be  of  a  uni- 


*Note. — Prescribed  standard  height  of  drawbars:  Standard-gauge 
roads,  34%  inches;  narrow-gauge  roads,  26  inches;  maximum  varia- 
tion between  loaded  and  empty  cars,  3  inches. 


§    514]  THE   S.VFETY   ACT   OF    1803,    AMENDED    1896.  590 

form  height,  provided  that  they  did  not  vary  from  the  three 
inches  prescribed  as  the  maximum  permitting  variation  from 
the  standard.  The  court  also  held  that  the  statutory  duty  im- 
posed upon  the  carriers  in  absolute  terms  by  this  section,  of  using 
in  interstate  commerce  only  such  freight  cars  as  comply  with 
the  standard  fixed  as  the  height  for  draw  bars,  is  not  discharged 
by  furnishing  cars  constructed  with  draw  bars  of  the  standard 
height  and  by  furnishing  to  competent  inspectors  and  trainmen 
a  sufficient  number  of  metallic  wedges  or  "shins"  to  use  as  oc- 
casion demands  to  raise  to  the  legal  standard  draw  bars  lowered 
by  the  natural  effect  of  proper  use,  reversing  83  Ark.  591. 


600  THE   SAFETY    ACT    OP    1893,    AMENDED    1896.  [SECTION    6 


Section  6. 

§  515.  Section  6  of  the  act. 

516.  Enforcement  of  act  by  prosecution. 

517.  The  supreme  court  on  prosecution  for  penalty  under  the  act, 

518.  The  burden  of  proof  under  the  proviso. 

§  515  (368).  Penalty  for  the  violation  of  the  provisions  of 
this  act. — Sec.  6.  {As  amended  April  1,  1896).  That  any  such 
common  carrier  using  any  locomotive  engine,  running  any  train, 
or  hauling  or  permitting  to  be  hauled  or  used  on  its  line  any  car 
in  violation  of  any  of  tlie  provisions  of  this  act,  shall  be  liable  to 
a  penalty  of  one  hundred  dollars  for  each  and  every  such  viola- 
tion, to  be  recovered  in  a  suit  or  suits  to  be  brought  by  the  United 
States  district  attorney  in  the  District  Court  of  the  United 
States  having  jurisdiction  in  the  locality  where  such  violation 
shall  have  been  committed ;  and  it  shall  be  the  duty  of  such  dis- 
trict attorney  to  bring  such  suits  upon  duly  verified  information 
being  lodged  with  him  of  such  violation  having  occurred ;  and  it 
shall  also  be  the  duty  of  the  Interstate  Commerce  Commission  to 
lodge  with  the  proper  district  attorneys  information  of  any  such 
violations  as  may  come  to  its  knowledge :  Provided,  That  nothing 
in  this  act  contained  shall  apply  to  trains  composed  of  four- 
wheel  cars  or  to  trains  composed  of  eight-wheel  standard  logging 
cars  were  the  height  of  sucli  car  from  top  of  rail  to  center  of 
coupling  does  not  exceed  twenty-five  inches,  or  to  locomotives 
used  in  hauling  such  trains  when  such  cars  or  locomotives  are 
exclusively  us-od  for  the  transportation  of  logs. 

§  516  (369).  Enforcement  of  the  act  by  prosecution. — This 

act  has  been  applied  and  enforced  not  only  in  suits  for  damages 
against  the  railroad  companies  for  alleged  non-compliance  with 
the  act,  but  also  in  suits  by  the  government  under  this  section. 
An  action  by  the  government  under  this  statute  to  recover  this 
penalty  has  been  held  not  to  be  a  criminal  prosecution,  but  a 
civil  action.  See  U.  S.  v.  Oregon  State  Line  R.  R.  Co..  180  Fed. 
483,  Dist.  of  Idaho  (1908).  In  this  case  it  was  held  that  it  was 
not  necessary  to  allege  that  the  company  acted  knowingly  or 
negligently,  as  the  penalty  was  enforced  for  the  non-compli- 
ance with  the  statutory  duty.  See  also  U.  S.  v.  P.  &  Reading 
R.  R.,  160  Fed.  696  (1908). 

It  was  held  by  the  circuit  court  of  appeals,  fifth  circuit,  in  St. 
Louis  Southwestern  Ry.  Co.  v  U.  S..  18-4  Fed.  28  (January, 
1910),  that  where  several  cars,  each  without  the  requisite  appli- 
ances required  by  this  act,  are  hauled  by  a  carrier  in  interstate 
commerce  at  one  and  the  same  time,  there  are  as  many  distinct 


§    518]  THE    SAFETY    ACT    OF    1893,    AMENDED    18'J6.  601 

violations  of  the  act  as  there  are  cars  not  properly  equipped,  for 
every  one  of  which  the  statutory  penalty  is  recoverable.  It  was 
also  held  that  actions  to  recover  these  statutory  penalties  are  so 
far  civil  in  their  nature  that  the  United  States  may  recover  upon 
the  preponderance  of  evidence,  and  the  trial  judge  may  in  proper 
cases  direct  a  verdict. 

See  also  U.  S.  v.  Western  &  A.  R.  Co.,  184  Fed.  336,  district 
court,  northern  district  of  Georgia,  where  the  court  passed  upon 
the  suflicicncy  of  a  declaration  to  recover  penalties  for  violation 
of  the  act.  It  was  held  that  it  was  sufficient  that  a  car  not  prop- 
erly equipped  is  moved  in  a  train  containing  cars  carrying  inter- 
state commerce,  though  the  defective  car  was  not  immediately 
connected  to  that  carrying  the  interstate  shipment ;  and  the  dec- 
laration was  held  sufficient  which  showed  that  the  car  had  not 
arrived  at  its  point  of  final  destinaticm. 

§  517.  The  supreme  court  on  prosecution  for  penalty  under 
the  act. — In  C.  B.  &  Q.  R.  Co.  v.  U.  S.,  supra,  the  supreme  court 
affirmed  the  judgment  of  the  circuit  court  eighth  circuit,  170 
Fed.  55G,  wherein  judgment  had  been  affirmed  in  favor  of  the 
United  States  in  a  suit  to  recover  penalties  for  violation  of  the 
Safety  Appliance  Act.  It  was  claimed  that  the  ruling  in  the 
Taylor  Case,  supra,  was  not  applicable  as  that  was  an  action  by 
an  individual  to  recover  damages  for  a  personal  injury,  whereas 
the  present  action  was  to  recover  a  penalty;  but  the  court  said 
the  contention  was  unsound  as  the  action  for  recovery  of  penalty 
was  a  civil  one.  It  was  therefore  competent  for  the  trial  court 
to  withdraw  the  case  from  a  jury  and  direct  a  verdict  if  the  evi- 
dence was  uncontradicted  and  raised  only  a  question  of  law.  The 
penalty  could  not  be  escaped  by  showing  that  the  carrier  had 
exercised  reasonable  care  in  equipping  its  cars  with  required 
safety  appliances  and  had  used  due  diligence  to  keep  them  in  re- 
pair by  usual  inspection;  but  the  statute  imposed  an  absolute 
duty  upon  the  carrier  which  was  not  discharged  by  the  exercise 
of  reasonable  care  or  diligence. 

§  518.  The  burden  of  proof  under  the  proviso. — The  burden 
of  proof  is  upon  a  railroad  to  bring  itself  within  this  exception 
in  favor  of  four  wheel  cars.  The  effect  of  the  proviso  is  to  create 
an  exception ;  and  whoever  claims  under  such  an  exception  must 
set  it  up  and  prove  it  through  this  case.  Schlemmer  v.  R.  R., 
^ipra,  §  502, 


602  THE   SAFETY    ACT    OF    1893,    AMENDED    1896.  [SECTION    7 


Section  7. 

§  519.  Section  7  of  the  act. 
520.  Discretion  of  the  commission  in  delaying  enforcement  of  the  act. 

§  519  (370).  Power  to  extend  time.— Sec.  7.  That  the  Inter- 
state Commerce  Commission  may  from  time  to  time  upon  full 
hearing  and  for  g-ood  cause  extend  the  period  within  which  any 
common  carrier  shall  complj^  with  the  provisions  of  this  act. 

§  520  (371).  Discretion  of  the  commission  in  delaying  the 
enforcement  of  the  act. — This  statute,  which  as  amended  is  the 
only  enactment  for  the  safety  of  railroad  emploj^es  in  the  fed- 
eral regulation  of  railroad  transportation,  has  been  construed 
by  the  commission  from  time  to  time  in  connection  with  the 
discretionary  power  lodged  with  the  commission  under  section 
7  of  the  act  for  the  extension  of  the  period  of  time  in  which 
the  railroads  are  required  to  comply  with  the  act.  The  com- 
mission has  ruled  that  this  discretioaary  power  was  designed 
to  afford  relief  in  cases  which  would  otherwise  inflict  special 
hardships  upon  the  public  and  the  carriers  and  should  only  be 
exercised  under  such  circumstances  and  for  such  short  lengths 
of  time  as  are  contemplated  by  the  framers  of  the  statute  and 
are  plainly  inferable  from  its  terms.  9  I.  C.  C.  R.  522 ;  8  I.  C.  C 
R.  643,  662:  6  1.  C.  C.  R.  332. 


§    522]  THE   SAFETY    ACT   OF    1893,    AMENDFiD    1896.  603 


Section  8. 

§  521.  Section  8  of  the  act. 

522.  Contributory  negligence  under  the  act. 

523.  Contributory  negligence  (listinguisherl  from  assumption  of  risk. 

524.  Responsibility  of  carrier  fot*  cars  out  of  condition. 

§  521  (372).  Employees  not  deemed  to  assume  risk  of  employ- 
ment.— Sec.  8.  That  any  eiupJo^Nce  of  any  sueli  eumnion  carrier 
who  may  be  injured  by  any  loconiotive,  car,  or  train  in  use  con- 
trary to  the  provision  of  this  act  shall  not  be  deemed  thereby  to 
have  assumed  the  risk  thereby  occasioned,  altlioui^h  continuing 
in  the  employment  of  such  cai-rier  after  the  unlawful  use  of 
such  loeomotive,  car.  or  train  had  been  ])rout.'-ht  to  his  knowledfre. 

§  522  (373).  Contributory  negligence  under  the  act. — It  is 

provided  in  section  8  of  the  original  act  that  the  continuance  in 
the  employment  of  the  carrier  by  an  employe  after  knowing  of 
the  violation  of  the  act  shall  not  be  deemed  an  assumption  of 
the  risk.  It  has  been  held  in  some  of  the  state  courts  that  this 
provision  clearly  indicates  the  modification  of  the  terms  and 
limiting  the  applications  theretofore  announced  by  the  courts 
with  reference  to  the  assumption  of  the  risk  by  the  employe. 
See  Texas,  etc.,  R.  Co.  v.  Swearingen,  122  Fed.  193  (1903). 
See  also  Narramore  v.  Railroad  Co.,  96  Fed.  298,  C.  C.  A.,  sixth 
circuit  (1899),  construing  the  Ohio  statute  to  the  same  effect. 

But  it  was  held  by  the  United  States  circuit  court  of  appeals 
for  the  eighth  circuit  in  Gilbert  v.  Burlington  C.  R.  &  N.  R.  Co.. 
128  Fed.  529  (1904),  afg.  123  Fed.  832,  that  the  devolution  of  the 
duty  upon  the  common  carriers  to  so  equip  their  cars,  that  they 
could  be  uncoupled  without  requiring  their  servants  to  go  be- 
tween the  ends  of  the  cars,  necessarily  imposed  upon  their  serv- 
ants the  railroad 's  duty  of  using  the  equipment  thus  used  upon 
them,  and  refraining  from  going  between  the  ends  of  the  cars  to 
couple  or  uncouple  them  unless  compelled  to  do  so  by  necessity. 
Under  this  legislation  the  breach  of  either  of  these  duties  consti- 
tuted a  want  of  ordinary  care  and  constituted  actionable  negli- 
gence. The  court  also  said  the  princij^le  was  applicable,  that 
where  there  is  a  comparatively  safe  and  a  more  dangerous  way 
of  discharging  the  duty  known  to  the  servants,  it  was  negligence 
for  him  to  select  the  more  dangerous  method,  and  if  his  negli- 


60-i  THE   SAFETY   ACT   OF    1893,    AMENDED    1896.  [SECTION    8 

gence  contributed  to  his  injury,  liis  negligence  is  fatal  to  recov- 
ery therefore.  See  also  Northern  Pacific  Ry.  Co.  v.  Tj^nan,  119 
Fed.  288,  and  56  C.  C.  A.  192.  ninth  circuit,  1902,  where  the 
court  left  the  issue  of  contributory  negligelice  to  the  jury.  See 
also  Railway  Co.  v.  Baker,  33  C.  C.  A.  468,  91  Fed.  224,  in  the 
seventh  circuit,  where  plaintiff  was  held  guilty  of  contributory 
negligence  for  failing  to  exercise  reasonable  care  for  his  own 
safety  in  the  absence  of  grab  irons  or  hand  holds;  and  Denver 
&  Rio  Grande  R.  Co.  v.  Arrighl,  129  Fed.  347  (C.  C.  A.,  eighth 
circuit).  In  this  case  the  court  said  that  the  defense  of  contribu- 
tory negligence  was  as  available  to  the  railroad  company  after 
as  before  the  passage  of  the  act  of  congress,  although  it  had  not 
complied  with  its  requirements.  In  this  case  the  plaintiff  rested 
his  case  entirely  on  the  failure  of  the  defendant  to  comply*  with 
the  act.  The  court  said  that  the  rationale  of  the  doctrine  of  as- 
sumption of  risk  was  not  that  which  supported  the  rule  of  con- 
tributory negligence. 

It  was  held  in  the  Voelker  Case,  supra,  that  a  switchman  does 
not  assume  the  risk  where  the  car  requiring  couplers  is  not  so 
equipped,  and  is  not  marked  or  isolated  as  one  in  bad  repair,  and 
its  laovement  at  the  time  is  not  with  the  view  to  its  isolation  or 
'repair,  though  he  continues  in  the  employment  with  knowledge 
of  the  unlawful  use  of  the  car. 

It  was  ruled  by  the  supreme  court  in  the  Taylor  Case,  supra, 
that  the  Safety  Appliance  Act  imposed  upon  the  railroad  com- 
panies an  unqualified  and  absolute  duty,  and  that  they  move  cars 
in  a  defective  condition  at  their  peril.  This  same  ruling  has 
been  followed  in  suits  for  damages  by  or  on  behalf  of  employes 
in  Atlantic  Coast  Line  v.  U.  S.,  168  Fed.  175,  by  the  circuit  court 
of  appeals  of  the  fourth  circuit ;  in  Wabash  R.  R.  v.  U.  S.,  cir- 
cuit court  of  appeals,  seventh  circuit,  supra;  by  the  circuit 
court  of  appeals,  eighth  circuit,  in  U.  S.  v.  Southern  Pacific,  169 
Fed.  407  (1909)  ;  in  C,  B.  &  Q.  R.  R.  v.  U.  S.,  170  Fed.  556,  and 
by  the  sixth  circuit  in  U.  S.  v.  Illinois  Central  R.  R..  177  Fed. 
801.  It  therefore  follows  that  the  employe  cannot  be  charged 
with  assuming  the  risk  when  the  company  fails  in  the  perform- 
ance of  this  statutory  duty.  See  also  Employer's  Liability  Act 
of  1908,  p.  514.  infra.  See  also  U.  S.  v.  Anderson  Tobacco,  etc., 
Co.,  163  Fed.  517,  C.  C.  A.  eighth  circuit  (1908),  reversing  150 
Fed.  442. 


§    523]  THE    SAFETY    ACT    OF    lb'J3,    AMF.NDKD    iMdi.  6(J5 

§  523.  Contributory  negligence  distinguished  from  assump- 
tion of  risk. — Tlie  SclileiuiiK-r  Case,  supra,  came  again  bci'ore  the 

supreme  court,  220  U.  S.  590,  55  L.  Ed. (1911),  on  a  writ  of 

error  from  a  second  trial  where  judgment  was  rendered  for  the 
defendant,  affirmed  by  the  supreme  court  of  Pennsylvania,  220 
Pa.  470.  The  supreme  court  affirmed  the  judgment  of  tlie  Penn- 
sylvania court,  which  in  turn  had  affirmed  the  judgment  of  the 
trial  court,  which  had  entered  a  judgment  for  the  defendant. 
notwitlistiiiKlinp-  a  verdict  of  the  jury  for  the  plaintiff  on  tlie 
issue  of  roiitiihutory  negligence.  This  was  on  the  ground  that 
a  clear  cause  of  contributory  negligence  was  presented  in  that 
the  decedent  not  only  attempted  to  make  the  coupling  in  a 
dangerous  way  when  his  attention  was  directly  called  to  a  safe 
way,  but  also  c^id  it  with  reckless  disregard  of  his  personal  safety 
by  raising  his  head,  though  twice  expressly  cautioned  at  the  time 
as  to  the  danger  of  so  doing. 

The  supreme  court  said  that  the  statute  at  the  time  of  the  in- 
jury complained  of  took  away  the  defense  of  assumption  of  risk 
but  did  not  deal  with  the  defense  of  contributory  negligence,  and 
that  while  assumption  of  risk  sometimes  shades  into  negligence 
as  commonly  understood  there  is,  nevertheless,  the  practical  and 
clear  distinction  between  the  two.  Assumption  of  risk  means 
that  an  employe  is  held  to  assume  the  risk  of  the  ordinary  dan- 
gers of  the  occupation  into  which  he  is  about  to  enter,  and  those 
risks  and  dangers  which  are  known  or  are  so  plainly  observable 
that  the  employe  may  be  presumed  to  know  of  them;  and  if  he 
continues  in  the  master's  employ  without  objection  he  takes  upon 
himself  the  risk  of  injury  from  his  defects.  Contributory  negli- 
gence, on  the  other  hand,  is  the  omission  of  the  employe  to  take 
those  precautions  for  his  own  safety  which  ordi-nary  prudence 
requires.  Under  the  statute,  therfore,  when  Schlemmer  saw  that 
the  car  was  not  equipped  with  an  automatic  coupler  he  would 
not  from  that  knowledge  alone  take  upon  himself  the  risk  of 
injury  without  liability  from  his  employer ;  but  he  was  not  for 
that  reason  absolved  from  the  duty  of  using  ordinary  care  for 
his  own  protection  under  the  circumstances  as  they  existed.  No 
federal  right,  therefore,  was  denied  in  the  ruling  of  the  state 
lourt,  directing  a  judgment  for  the  defendant. 

In  this  case  the  court  called  attention  to  the  third  section  of 
the  Employer's  Liability  Act  of  1908,  which  was  enacted  after 


606  THE   SAFETY   ACT    OF    1893,    AMENDED    1896.  [SECTION    8 

the  injury  in  this  case,  which  provided  that  no  employe  was 
guilty  of  contributory  negligence  in  any  case  where  violation  by 
a  common  carrier  of  any  statute  enacted  for  the  safety  of  em- 
plo}'es,  contributed  to  the  injui-y  or  death  of  such  employes.  See 
irifra. 

§  524.  Responsibility  of  carrier  for  cars  out  of  condition — 

Prior  to  tlie  decision  of  the  supreme  court  in  the  Delk  Case  there 
was  a  difference  of  judicial  opinion  as  expressed  in  the  circuit 
courts  as  to  the  responsibility  of  the  carrier  when  a  car  equipped 
with  automatic  apparatus  is  out  of  order,  and  is  being  used  for 
switching  purposes  on  a  side  track  where  it  is  placed  for  repairs. 
See  Sigel  v.  N.  Y.  C.  &  H.  R.  Co.,  N.  D.  of  Pa.,  178  Fed.  873 
(1910),  and  also  the  opinion  of  the  majority  of  the  court  of 
appeals  of  the  sixth  circuit  in  the  Delk  Case,  158  Fed.  931 
(1908)  ;  but  it  is  definitely  determined  by  the  judgment  of  the 
supreme  court  that  the  absolute  duty  of  the  carrier  extends  to 
the  maintenance  in  good  condition  at  all  times  of  the  coupling 
apparatus  required  by  the  statute. 


AMENDMENT  OF  1903  TO  SAFETY  ACT. 

5  525.  Amendment  of  1903. 

AN  ACT  To  amend  an  Act  entitled  "An  act  to  promote  the  safety  of 
employees  and  travelers  upon  railroads  by  compelling  common  car 
riers  engaged  in  interstate  commerce  to  equip  their  cars  with  au- 
tomatic couplers  and  continuous  brakes  and  their  locomotives  with 
driving-wheel  brakes,  and  for  other  purposes,"  approved  March  sec- 
ond, eighteen  hundred  and  ninety-three,  and  amended  April  first, 
eighteen  hundred  and  ninety-six. 

§  525  (374).  Amendment  of  1903.— i3c  it  enacted  by  the  Sen- 
ate and  House  of  Representatives  of  the  United  States  of  America 
m  Congress  assembled.  That  the  provisions  and  requirements  of 
the  Act  entitled  "An  Act  to  promote  the  safety  of  employees  and 
travelers  upon  railroads  by  compelling  eonnnon  carriers  en- 
gaged in  interstate  commerce  to  equip  their  cars  with  automatic 
couplers  and  continuous  brakes,  and  their  locomotives  with  driv- 
ing-wheel brakes,  and  for  other  purposes,"  approved  JMarch  sec- 
ond, eighteen  hundred  and  ninety-three,  and  amended  April 
first,  eighteen  hundred  and  ninety-six,  shall  be  held  to  apply  to 
eonnnon  carriers  by  railroads  in  the  Territories  and  the  District 
of  Columbia  and  shall  apply  in  all  cases,  whether  or  not  the  coup- 
lers brought  together  are  of  the  same  kind,  make,  or  type ;  and  the 
provisions  and  requirements  hereof  and  of  said  acts  relating  to 
train  brakes,  automatic  couplers,  grab  irons,  and  the  height  of 
drawbars  shall  be  held  to  apply  to  all  trains,  locomotives,  tenders, 
cars,  and  similar  vehicles  used  on  any  railroad  engaged  in  inter- 
state commerce,  and  in  the  Territories  and  the  District  of  Colum- 
bia, and  to  all  other  locomotives,  tenders,  ears,  and  similar  ve- 
hicles used  in  connection  therewith,  excepting  those  trains,  cars, 
and  locomotives. exempted  by  the  provisions  of  section  six  of  said 
act  of  iMarch  second,  eighteen  hundred  and  ninety-three,  as 
amended  by  the  act  of  April  first,  eighteen  hundred  and  ninety- 
six,  or  which  are  used  upon  street  railways. 

Sec.  2.  That  whenever,  as  provided  in  said  a^t.  any  train  is 
operated  with  power  or  train  brakes,  not  less  than  fifty  per 
centum  of  the  ears  in  such  train  sliall  have  their  brakes'  used 
and  operated  by  the  engineer  of  the  locomotive  drawing  such 
ti-ain;  and  all  power-brake  cars  in  such  train  which  are  associ- 
ated together  with  said  fifty  per  centum  shall  have  their  brakes 
so  used  and  operated;  and,  to  more  fully  carry  into  effect  the 
objects  of  said  act,  the  Interstate  Commerce  Commission  may, 
from  time  to  time,  after  full  hciiring,  increase  the  minimum  per- 
centage of  the  cars  in  any  train  re<iuired  to  be  operated  with 

[607] 


608  AMENDMENT    OF    1903    TO    SAFETY    ACT.  [§    525' 

power  or  train  brakes  which  -must  have  their  brakes  used  and 
operated  as  aforesaid;  and  failure  to  comply  with  any  such  re- 
quirement of  the  said  Interstate  Conunerce  Commission  shall  be 
subject  to  the  like  penalty  as  failure  to  comply  with  any  require- 
ment of  this  section. 

Sec.  3.  That  the  provisions  of  this  act  shall  not  take  effect 
until  September  first,  nineteen  hundred  and  three.  Nothing  in 
this  act  shall  be  held  or  construed  to  relieve  any  common  carrier, 
the  Interstate  Commerce  Commission,  or  any  IJnited  States  dis- 
trict attorney  from  any  of  the  provisions,  powers,  duties  liabili- 
ties, or  requirements  of  said  act  of  March  second,  eighteen  hun- 
dred and  ninety-three,  as  amended  by  the  act  of  April  first, 
eighteen  hundred  and  ninety-six ;  and  all  of  the  provisions,  pow- 
ers, duties,  requirements  and  liabilities  of  said  act  of  March  sec- 
ond, eighteen  hundred  and  ninety-three,  as  amended  by  the  act 
of  April  first,  eighteen  hundred  and  ninety-six,  shall,  except  as 
specifically  amended  by  this  act,  apply  to  this  act. 

As  to  the  effect  of  this  amendment  under  the  construction  of 
section  2,  see  decision  of  the  supreme  court  in  the  Schlemmer 
Case,  where  it  was  held  that  this  act  indicated  the  intent  of  the 
original  act  in  the  construction  of  section  2. 


SAFETY  ACT  OF  1910. 

5  526.  Safety  Act  of  1910. 

§  526.  Safety  Act  of  1910. 

AN  ACT  To  supplement  "An  Act  to  promote  the  safety  of  employees 
and  travelers  upon  railroads  by  compelling  common  carriers  en- 
gaged in  interstate  commerce  to  equip  their  cars  with  automatic 
couplers  and  continuous  brakes  and  their  locomotives  with  driving 
wheel  brakes  and  for  other  purposes,"  and  other  safety  appliance 
Acts,  and  for  other  purposes. 

Be  it  'innclcd  hy  tJic  Senate  and  House  of  Representatives  of 

[To  ivhat  carriers  apiilicublc] 

the  United  States  of  America  in  Congress  assembled,  That  the 
provisions  of  this  Act  shall  apply  to  every  common  carrier  and 
every  vehicle  subject  to  the  Act  of  March  second,  eif2;hteen  hun- 
dred and  ninety-three,  as  amended  April  first,  eighteen  hundred 
and  ninety-six,  and  JMarch  second,  ninteen  hundred  and  three, 
commonly  known  as  the  "Safety  Appliance  Acts," 

[AVhen  act  effective.] 

Sec.  2.  That  on  and  after  July  first,  nineteen  hundred  and 
eleven,  it  shall  be  unlawful  for  any  common  carrier  subject  to 
the  provisions  of  this  Act  to  haul,  or  permit  to  be  hauled  or  used 
on  its  line  any  car  subject  to  the  provisions  of  this  Act 
not  equipped  with  appliances  provided  for  in  this  Act,  to  wit: 

[Cars   to   be  equipped   witli   sill   steps,   liand  brakes,   lad- 
ders, running   boards,  and  Krab   irons.] 

All  cars  must  be  equipped  with  secure  sill  steps  and  efficient 
hand  brakes;  all  cars  requiring  secure  ladders  and  secure  run- 
ning boards  shall  be  equipped  with  such  ladders  and  running 
boards,  and  all  cars  having  ladders  shall  also  be  equipped  with 
secure  hand  holds  or  grab  irons  on  their  roofs  at  the  tops  of  such 
ladders:  Provided,  That  in  the  loading  and  hauling  of  long  com- 
modities, requiring  more  than  one  car.  the  hand  brakes  may  be 
omitted  on  all  save  one  of  the  cars  while  they  are  thus  combined 
for  such  purpose. 

[Commission    to   designate   number,   dimensions,    location, 
and  manner  of  applieatiou  of  appliances.] 

Sec.  3.  That  within  six  months  from  the  passage  of  this  Act 
the  Interstate  Connneree  Conunission,  after  hearing,  sliall  desig- 
nate the  unmber,  dimensions,  location,  and  manner  of  application 
of  the  appliances  provided  for  by  section  two  of  this  Act  and  sec- 
tion four  of  the  Act  of  ]\Iarch  .second,  eighteen  hundred  and 
ninety-three,  and  shall  give  notice  of  such  designation  to  all 
common  carriers  subject  to  the  ])rovisions  of  this  Act  by  such 
39  [G09] 


610  SAFETY    ACT    OF    I'JIO.  [§    526 

means  as  the  Commission  ma}-  deem  proper,  and  thereafter  said 
number,  location,  dimensions,  and  manner  of  application  as 
designated  by  said  Commission  shall  remain  as  the  standards  of 
equipment  to  be  used  on  all  cars  subject  to  the  provisions  of  this 
Act,  unless  changed  by  an  order  of  said  Interstate  Commerce 
Commission,  to  be  made  after  full  hearing  and  for  good  cause 
shown;  and  failure  to  compl3^  with  any  such  requirement  of  the 
Interstate  Commerce  Commission  shall  be  subject  to  a  like  pen- 
alty as  failure  to  comply  with  any  requirement  of  this  Act:  Pro- 

[Period  of  compliance  may  be  extended,! 

vided.  That  the  Interstate  Commerce  Commission  may  upon  full 
heai'ing  and  for  good  cause,  extend  the  period  within  which  any 
common  carrier  sliall  comply  with  the  provisions  of  this  section 
with  respect  to  the  eriuipment  of  cars  actually  in  service  upon  the 

[Commission   may  modify  heisrht   of   drawbars.] 

date  of  the  passage  of  this  Act.  Said  commission  is  hereby  given 
authority,  after  hearing,"  to  modify  or  change,  and  to  prescribe 
the  standard  height  of  drawbars  and  to  fix  the  time  within  which 
such  modification  or  change  shall  become  effective  and  obligatory, 

[Present  standard  height  of  drawbars  legal.] 

and  prior  to  the  time  so  fixed  it  shall  be  unlawful  to  use  any  car 
or  vehicle  in  interstate  or  foreign  traffic  which  does  not  comply 
with  the  standard  now  fixed  or  the  standard  so  prescribed,  and 
after  the  time  so  fixed  it  shall  be  unlawful  to  use  any  car  or  ve- 
hicle in  interstate  or  foreign  traffic  which  doer;  not  comply  with 
the  standard  so  prescribed  by  the  Commission. 

[Penalty  for  violation  of  provisions  of  this  act.] 

Sec.  4.  That  any  common  carrier  subject  to  this  Act  using, 
hauling,  or  permitting  to  be  used  or  hauled  on  its  line  any  car 
subject  to  the  requirements  of  this  Act  not  equipped  as  provided 
in  this  Act  shall  be  liable  to  a  penalty  of  one  hundred  dollars 
for  each  and  every  such  violation,  to  be  recovered  as  provided  in 
section  six  of  the  Act  of  March  second,  eighteen  hundred  and 
ninety-three,  as  amended  April  first,  eighteen  hundred  and 
ninety-six:  Provided,  That  where  any  car  shall  have  been  prop- 
erly equipped,  as  provided  in  this  Act  and  the  other  Acts  men- 
tioned herein,  and  such  equipment  shall  have  become  defective 

[Defective  cars   miay  be   hauled  to   nearest  available   re- 
pair  point.] 

or  insecure  while  such  car  was  being  used  by  such  carrier  upon 
its  line  of  railroad,  such  car  may  be  hauled  from  the  place  where 
such  equipment  was  first  discovered  to  be  defective  or  insecure 
to  the  nearest  available  point  where  such  car  can  be  repaired, 
without  liability  for  the  penalties  imposed  by  section  four  of 
this  Act  or  section  six  of  the  Act  of  March  second,  eighteen  hun- 
dred and  ninety-three,  as  amended  by  the  Act  of  April  first, 
eighteen  himdred  and  ninety-six,  if  such  movement  is  necessary 
to  make  such  repairs  and  such  repairs  can  not  be  made  except  at 
such  repair  point;  and  such  movement  or  hauling  of  such  car 


§    526J  SAFETY    ACT    OF    1  !»!'•.  Gil 

[Carrlern  not  relieved  from  UnblUty  for  death  or  Injury.l 

shall  be  at  tlio  sole  risk  of  the  carrier,  and  nothiii'j^  in  this  sec- 
tion shall  be  constrned  to  relieve  such  carrier  from  liability  in 
any  remedial  action  for  the  death  or  injury  of  any  railroad  em- 
l)loyee  caused  to  siicli  employee  by  reason  of  or  in  connection  with 
the  movement  or  hauling  of  such  ear  with  equipment  which  is 
defective  or  insecure  or  which  Is  not  maintained  in  accordance 
with  the  requirements  of  this  Act  and  the  other  Acts  herein  re- 
ferred to ;  and  nothing  in  this  proviso  shall  be  construed  to  per- 

[llaiilini;  by  cliainH.] 

mit  the  hauling  of  defective  cars  by  means  of  chains  instead  of 
drawbars,  in  revenue  trains  or  in  association  with  others  cars 
that  are  commercially  used,  unless  such  defective  cars  contain 
live  stock  or  "perishable"  freight. 

[Enforcement.] 

Sec.  6.  That  it  shall  be  the  duty  of  the  Interstate  Commerce 
Commission  to  enforce  the  provisions  of  this  Act,  and  all  powers 
heretofore  granted  to  said  Commission  are  hereby  extended  to 
it  for  the  purpose  of  the  enforcement  of  this  Act. 

Public.  No.  ]83,  approved.  April  14,  1910. 

[Eniitloyment    of   Iuspector.s.] 

Sundry  civil  act  (appropriations)  of  June  28,  1902.  authorizes 
Commission  to  employ  "inspectors  to  execute  and  enforce  the  re- 
quirements of  the  safety-appliance  Act." 


THE  EaiPLOYERS'  LIABILITY  xVCT. 

§  527.  The  Employers'  Liability  Act  of  1906. 

528.  The  act  of  1906  invalid  as  to  interstate  carriers. 

529.  The  act  of  1906  valid  as  to  the  District  of  Columbia  and  the 

territories. 

530.  The  Employers'  Liability  Act  of  1908, 

531.  The  amendatory  act  of  April  5,  1910, 

532.  The  construction  of  the  act  of  1908. 

533.  The  abolition  of  contributory  negligence  in  connection  with  the 

Safety  Appliance  Act. 

534.  The  amendment  of  1910. 

535.  The  amendment  of  1910  not  retroactive. 

536.  What  is  employment  in  interstate  commerce. 

537.  Concurrent  jurisdiction  of  the  state  courts. 

538.  The  prohibition  of  contracting  out  of  the  act. 

539.  The  superseding  of  state  statutes. 

540.  Right  of  removal  under  the  act. 

§  527.  The  Employers'  Liability  Act  of  1906. 

AN  ACT  Relating  to  liability  of  common  carriers  in  the  District  of 
Columbia  and  Territories  and  common  carriers  engaged  in  commerce 
between  the  states  and  between  the  states  and  foreign  nations  to 
their  employees. 

Be  it  enacted  hjj  the  Senate  and  House  of  Representatives  of 
the  United  States  of  America  in  Congress  assemUed,  That  every 
common  carrier  engaged  in  trade  or  commerce  in  the  District  of 
Columbia,  or  in  any  Territory  of  the  United  States,  or  between 
the  several  States,  or  between  any  Territory  and  another  State,  or 
between  any  Territory  or  Territories  and  any  State  or  States,  or 
the  District  of  Columbia,  or  with  foreign  nations,  or  between  the 
District  of  Columbia  and  any  State  or  States  or  foreign  nations, 
shall  be  liable  to  any  of  its  employees,  or,  in  the  case  of  his  death,, 
to  his  personal  representative  for  the  benefit  of  his  widow  and 
children,  if  any,  if  none,  then  for  his  parents,  if  none,  then  for 
his  next  of  kin  dependent  upon  him,  for  all  damages  which  may 
result  from  the  negligence  of  any  of  its  officers,  agents,  or  em- 
ployees, or  by  reason  of  any  defect  or-  insufficiency  due  to  its 
negligence  in  its  cars,  engines,  appliances,  machinery,  track, 
roadbed,  ways  or  works. 

Sec.  2.  That  in  all  actions  hereafter  brought  against  any  com- 
mon carriers  to  recover  damages  for  personal  injuries  to  an  em- 
ployee, or  where  such  injuries  have  resulted  in  his  death,  the 
fact  that  the  employee  may  have  been  guilty  of  contributory 
negligence  shall  not  bar  a  recovery  where  his  contributory  negli- 

[612J 


§  528]  THE  employers'  LiABn.rrv  act.  G13 

gence  was  aUght  and  that  ol'  the  employer  was  gross  in  com- 
parison, but  the  damages  shall  bo  diminished  by  the  jury  in  pro- 
portion to  the  amount  of  nci^ligence  attributable  to  sucli  em- 
ployee. All  questions  of  negligence  and  contributory  negligence 
shall  be  for  tlie  .jury. 

Sec.  3.  That  no  contract  of  employment,  insurance,  relief 
benefit,  or  indemnity  for  injury  or  deatli  entered  into  by  or  on 
behalf  of  any  employee,  nor  the  acceptance  of  any  such  insur- 
ance, relief  benefit,  or  indemnity  by  the  person  entitled  thereto, 
shall  constitute  any  bar  or  defense  to  any  action  brought  to  re- 
cover damages  for  personal  injuries  to  or  death  of  such  em- 
ployee: Provided,  however.  That  upon  the  trial  of  sur-h  action 
against  any  common  carrier  the  defendant  may  set  off  therein 
any  sum  it  has  contributed  toward  any  such  insurance,  relief, 
benefit,  or  indemnity  tliat  may  have  been  paid  to  the  injured 
employee,  or,  in  case  of  his  death,  to  his  personal  representative. 

Sec.  4.  That  no  action  shall  be  maintained  under  this  Act, 
unless  commenced  within  one  year  from  the  time  the  cause  of 
action  accrued. 

Sec.  5.  That  nothing  in  this  Act  shall  be  held  to  limit  the 
duty  of  common  carriers  by  railroads  or  impair  the  riglits  of 
their  employees  under  the  safety-appliance  Act  of  ]\Iarch  sec- 
ond, eighteen  hundred  and  ninety-three,  as  amended  April  first, 
eighteen  hnndred  an  ninety-six,  and  March  second,  nineteen 
liundred  and  three. 

Approved  June  11.  1906. 

§  528.  The  act  of  1906  invalid  as  to  interstate  carriers. — In 
what  is  known  as  the  Employers'  Liability  Case,  Howard  v. 
Illinois  Central  R.  R.  Co.,  207  U.  S.  463,  52  L.  Ed.  297  (1907), 
the  supreme  court  held  this  act  of  1906  invalid  as  to  interstate 
carriers,  in  that  it  went  beyond  the  power  of  congress  under 
the  commerce  clause,  by  including  all  the  employes  of  said  car- 
riers and  in  not  limiting  the  act  to  the  employes  engaged  in  said 
commerce.  Five  justices  concurred  in  the  opinion  holding  that 
this  part  of  the  act.  thus  held  invalid,  could  not  be  separated 
from  the  provisions  of  the  act  as  to  interstate  emploj'es,  so  the 
entire  act  as  to  interstate  carriers  was  held  void. 

Four  justices  (']\Toody.  Harlan,  ^McKcHna  and  Holmes^  dis- 
sented, holding  not  only  that  the  act  in  its  main  features  was 
valid,  but  that  the  attempted  regulation  of  intrastate  employes 
could  and  shoidd  be  separated  from  the  other  provisions  of  the 
act.  Three  of  the  justices  concurring  in  the  conclusion  that  the 
act  was  invalid  did  not  concur  in  the  assumption  of  the  opinion 


614  THE  employers"  liability  act.  [§  529 

that  congress  could  regulate  the  relation  of  master  and  servant 
in  interstate  commerce. 

It  seems  therefore  that  six  of  the  justices  concurred  in  main- 
taining the  power  of  congress  to  regulate  the  liability  of  inter- 
state carriers  to  their  employes  engaged  in  interstate  commerce. 

§  529.  The  act  of  1906  valid  as  to  District  of  Columbia  and 
the  territories. — So  much  of  the  act  as  related  to  the  District  of 
Columbia  and  the  territories,  was  not  based  upon  the  power  of 
congress  to  regulate  commerce  among  the  states  but  upon  its 
power  as  a  single  sovereign  witli  full  legislative  authority,  and 
in  El  Paso  &  N.  K.  Co.  v.  Gutierrez,  215  U.  S.  87,  54  L.  Ed.  106 
(1909),  the  court  without  dissent  declared  that  the  invalidity 
of  the  act  as  to  interstate  commerce  as  declared  in  the  Howard 
Case,  supra,  did  not  invalidate  such  of  its  provisions  as  regulate 
commerce  within  the  district  of  Columbia  and  the  territories, 
affirming  the  supreme  court  of  Texas  in  117  S.  W.  426. 

In  this  opinion  the  court  approved  the  opinion  of  the  court  of 
appeals  of  the  district  of  Columbia  holding  the  act  valid  as  to 
the  district  of  Columbia  in  Hyde  v.  Southern  R.  R.  Co.,  31  App. 
D.  C.  466. 

§  530.  The  Employers'  Liability  Act  of  1908. 

AN  ACT  Relating  to  the  liability  of  common  carriers  by  railroad   to 
their  employees  in  certain  cases. 

Be  it  enacted  hy  the  Senate  and  House  of  Eeprescntaiives  of 
the  United  States  of  America  in  Congress  assembled.  That  every 
common  carrier  by  railroad  while  engaging  in  commerce  be- 
tween any  of  the  several  States  or  Territories,  or  between  any  of 
the  States  and  Territories,  or  between  the  District  of  Columbia 
and  any  of  the  States  or  Territories,  or  between  the  District  of 
Columbia  or  any  of  the  States  or  Territories,  and  any  foreign 
nation  or  nations,  shall  be  liable  in  damages  to  any  person  suf- 
fering injury  while  he  is  employed  by  such  carrier  in  such  com- 
merce, or,  in  case  of  the  death  of  such  employee,  tp  his  or  her 
personal  representative,  for  the  benefit  of  the  surviving  widow 
or  husband  and  children  of  such  employee ;  and,  if  none,  then  of 
such  employee's  parents;  and,  if  none,  then  of  the  next  of  kin 
dependent  upon  such  employee,  for  such  injury  or  death  result- 
ing in  whole  or  in  part  from  the  negligence  of  any  of  the  officers, 
agents,  or  employees  of  such  carrier,  or  by  reason  of  any  defect 
or  insufficiency,  due  to  its  negligence,  in  its  cars,  engines,  appli- 
ances, machinery,  track,  roadbed,  works,  boats,  wharves,  or  other 
equipment. 


§  530]  TiiK  employers'  liability  act.  G15 

• 

Sec.  2.  That  every  common  carrier  by  railroad  in  the  Terri- 
tories, the  District  of  Columl)ia,  the  Panama  Canal  Zone,  or 
other  possessions  of  the  United  States  shall  be  liable  in  damages 
to  any  person  suiferinj,'  injury  while  he  is  employed  by  such  car- 
rier in  any  of  said  jurisdictions,  or,  in  Ciise  of  the  death  of  such 
employee,  to  his  or  her  personal  representative,  for  the  benefit  of 
tlie  surviving  widow  or  husband  and  children  of  such  employee; 
and,  if  none,  then  of  such  cjuployee's  parents;  and,  if  none,  then 
of  the  next  of  kin  dependent  upon  such  employee,  for  such  injury 
or  death  resulting  in  whole  or  in  part  from  the  negligence  of 
any  of  the  officers,  agents,  or  employees  of  such  carrier,  or  by 
reason  of  any  defect  or  insufficiency,  due  to  its  negligence,  in  its 
cars,  engines,  appliances,  machinery,  track,  roadbed,  works, 
boats,  wharves,  or  .other  eqnipment. 

Sec.  3.  That  in  all  actions  hereafter  brought  against  any  snch 
common  carrier  by  railroad  under  or  by  virtue  of  any  of  the 
provisions  of  this  act  to  recover  damages  for  ])ersonal  injuries 
to  an  employee  or  where  said  injuries  have  resulted  in  his  death, 
the  fact  that  the  employee  may  have  been  guilty  of  contributory 
negligence  shall  not  bar  a  recovery,  but  the  damages  shall  be 
diminished  by  the  jury  in  proportion  to  the  amount  of  negligence 
attributable  to  such  employee:  Provided,  That  no  such  employee 
who  may  be  injured  or  killed  shall  be  held  to  have  been  guilty  of 
contributory  negligence  in  any  case  where  the  violation  by  such 
common  carrier  of  any  statute  enacted  for  the  safety  of  em- 
ployees contributed  to  the  injury  or  death  of  such  employee. 

Sec.  4.  That  in  any  action  brought  against  any  common  car- 
rier under  or  by  virtue  of  any  of  the  provisions  of  this  act  to  re- 
cover damages  for  injuries  to,  or  the  death  of,  any  of  its  em- 
ployee;?, such  employee  shall  not  be  held  to  have  assumed  the 
risks  of  his  employment  in  any  ease  where  the  violation  by  such 
common  carrier  of  any  statute  enacted  for  the  safety  of  employ- 
ees contributed  to  the  injury  or  death  of  such  employee. 

Sec.  5.  That  any  contract,  rule,  regulation,  or  device  whatso- 
ever, the  purpose  or  intent  of  which  shall  be  to  enable  any  com- 
mon carrier  to  exempt  itself  from  any  liability  created  by  this 
Act,  shall  to  that  extent  be  void :  Provided,  That  in  any  action 
brought  against  any  such  common  carrier  under  or  hy  virtue  of 
any  of  the  provisions  of  this  Act.  such  common  carrier  may  set 
off  therein  any  sum  it  has  contributed  or  paid  to  any  insurance, 
relief  benefit,  or  indenuiity  that  may  have  been  paid  to  the  in- 
jured employee  or  the  person  entitled  thereto  on  account  of  tie 
injury  or  death  for  which  said  action  was  brought. 

Sec.  6.  That  no  action  shall  be  maintained  under  this  Act  un- 
less commenced  within  two  years  from  the  day  the  cause  of  ac- 
tion accrued. 

Sec.  7.  That  the  term  "common  carrier"  as  used  in  this  act 
shall  include  the  receiver  or  receivers  or  other  persons  or  cor- 


(516  THE  employers'  liability  act.  [§  531 

porntious  charged  with  the  duty  of  the  management  and  opera- 
tion of  the  business  of  a  common  carrier. 

Sec.  S.  Tliat  nothing  in  this  Act  shall  be  held  to  limit  the  duty 
or  liability  of  common  carriers  or  to  impair  the  rights  of  their 
employees"  under  any  other  Act  or  Acts  of  Congress,  or  to  affect 
the  pi-osecution  of  anv  pending  proceeding  or  right  of  action 
under  the  Act  of  Congress  entitled,  '"An  Act  relating  to  liability 
of  common  carriers  in  the  District  of  Columbia  and  Territories, 
and  to  common  carriers  engaged  in  commerce  between  the  States 
and  between  the  States  and  foreign  nations  to  their  employees, ' 
approved  June  eleventh,  nineteen  hundred  and  six. 

Approved,  April  22.  1908. 

§  531.  The  amendatory  act  of  April  5,  1910. 

AN  ACT  To  amend  an  Act  entitled  "An  Art  relating  to  the  liability  of 
common  carriers  by  railroad  to  their  employees  in  certain  cases," 
approved  April  22,  1908. 

Be  it  enacted  ly  the  Senate  and  House  of  Representatives  of 
the  United  States  of  America  in  Congress  assembled,  That  an 
Act  entitled  ' '  An  Act  relating  to  the  liability  of  common  carriers 
by  railroad  to  their  employees  in  certain  cases, ' '  approved  April 
twenty-second,  nineteen  hundred  and  eight,  be  amended  m  sec- 
tion six  so  that  said  section  shall  read  : 

"Sec.  6.  That  no  action  shall  be  maintained  under  this  Act 
unless  commenced  within  two  years  from  the  day  the  cause  of 
action  accrued. 

' '  Under  this  Act  an  action  may  be  brought  m  a  circuit  court 
of  the  United  States,  in  the  district  of  the  residence  of  the  de- 
fendant, or  in  which  the  cause  of  action  arose,  or  in  which  the 
defendant  shall  be  doing  business  at  the  time  of  commencing 
such  action.  The  jurisdiction  of  the  courts  of  the  United  States 
under  this  Act  shall  be  concurrent  with  that  of  the  courts  of  the 
several  States,  and  no  case  arising  under  this  Act  and  brought  m 
any  state  court  of  competent  jurisdiction  shall  be  removed  to 
any  court  of  the  United  States."  ,,     .  . 

' '  Sec.  2.  That  said  Act  be  further  amended  by  adding  the  tol- 
jowing  section  as  section  nine  of  said  Act: 

' '  Sec  9  That  any  risht  of  action  given  by  this  Act  to  a  per- 
son suffering  injurv  shall  survive  to  his  or  her  personal  repre- 
'-entative  for  the  benefit  of  the  surviving  widow  or  husband  and 
children  of  such  emplovee,  and,  if  none,  then  of  such  employee's 
parents  •  and,  if  none,  then  of  the  next  of  kin  dependent  upon 
such  employee,  but  in  such  cases  there  shall  be  only  one  recovery 
for  the  same  injury." 

Approved  April  5,  1910. 

§  532.  Construction  of  act  of  1908.— The  act  of  1908  differs 
from  that  of  1906,  in  that  it  sets  out  in  separate  sections  the  ex- 


§  533]  THE  employers'  liabiijtv  act.  G17 

ercise  of  the  power  of  conf,n-css  under  the  commerce  clause  in 
re^ilating  interstate  railroad  carriers  (sec.  1),  and  its  plenary 
powers  over  railroad  carriers  in  the  territories,  the  district  of 
Columbia  and  other  possessions  of  the  United  States,  wliere  con- 
gress exorcises  sovereign  authority  (sec.  2). 

The  act  has  been  sustained  in  Zikos  v.  Oregon  R.  &  N.  Co.,  179 
Fed.  893,  E.  D.  Wash.  (1010),  and  in  Watson  v.  I.  M.  &  S.  R. 
Co.,  169  Fed.  942  (1909),  where  it  was  held  to  be  valid  and 
within  the  lawful  power  of  congress  and  free  from  the  infirmi- 
ties of  the  act  of  1906.  The  act  has  not  (Oct,  1911)  been  di- 
rectly passed  upon  by  the  supreme  court  but  was  referred  to  in 
the  decision  in  the  Sclilemnier  Case,  supro,  §  52;J,  and  in  the  Deik 
Case,  supra,  as  amending  the  Safety  Appliance  Act,  see  supra, 
^  507. 

It  was  held  in  these  cases  that  the  abolition  of  the  fellow  serv- 
ant rule  in  the  case  of  carriers  by  rail  was  not  an  arbitrary  or 
unreasonable  classification,  and  under  the  commerce  clause  con- 
gress had  the  power  to  regulate  the  relation  of  master  and  serv- 
ant of  carriers  by  rail  engaged  in  interstate  transportation,  if 
limited  to  employees  when  engaged  in  interstate  ser\ice.  The 
validity  of  the  act  has  also  been  assumed  in  other  cases  of  the 
circuit  and  in  tlie  circuit  court  of  apjieals  of  the  eighth  circuit. 
Johnson  v.  Great  Northern  Ry.  Co.,  178  Fed.  643  (1910). 

§  533.  The  abolition  of  contributory  negligence  in  connection 
with  the  Safety  Appliance  Act. — Under  the  proviso  of  section  3 
of  the  act  of  1908  no  (.'mployee  who  may  b6  injured  or  killed 
shall  be  held  to  have  been  guilty  of  contributory  negligence  in 
any  case  where  the  violation  of  such  common  carrier  of  any  stat- 
ute enacted  for  the  safety  of  employes  contributed  to  the  injury 
or  death  of  such  employe. 

This  provision  wns  applied  and  enforced  in  Johnson  v.  Great 
Northern  Railwaj^  Co.,  supra,  as  amending  the  Safetj'  Appliance 
Act  and  making  the  question  of  assumption  of  risk  and  contribu- 
tory negligence  immaterinl  in  an  action  under  the  Safety  Appli 
ance  Act.  The  court  said  that  tlie  plaintiff  whose  duty  it  was  to 
see  to  the  coupling  of  the  cars  and  tlie  air  hose  upon  the  cars 
•which  were  upon  the  transfer  track — some  of  the  cars,  among 
them  the  one  in  question,  engaged  in  interstate  commerce — was 
«,n  emploj^e  engaged  in  interstate   commerce.     The   supreme 


618  TPIE    employers'    LI-VBILITY    ACT.  [§    534 

eoiii't  also  in  two  cases, — in  the  Sehlemmer  Case,  supra,  and  tlie 
Deik  Case,  supra, — recognized  the  act  of  1908  as  amending  the 
Safety  Appliance  Act.  It  follows,  therefore,  that  under  this 
proviso  the  defense  of  contributory  negligence  as  well  as  that 
of  the  assumption  of  risk  is  taken  away  where  the  failure  of 
the  carrier  to  provide  the  safety  appliances  required  by  law 
contributes  to  the  injury  or  death  of  the  employe. 

§  534.  The  amendment  of  1910. — The  purpose  of  the  amend- 
ment of  1910  is  illustr;!ted  in  the  case  of  Newell  v.  B.  &  0.  R.  R. 
Co.,  181  Fed.  698,  W.  D.  of  Pa.  In  this  ease  a  citizen  of  Penn- 
sylvania sued  a  jMaryland  corporation  in  the  federal  circuit  court 
of  Pennsylvania  to  recover  damages  for  injuries  wherein  the 
federal  jurisdiction  under  the  compliant  rested  exclusively  on 
diverse  citizenship,  the  plaintiff  thereafter  amending  his  com- 
plaint to  show  cause  for  injury  while  engaged  in  interstate  com- 
merce under  this  act.  The  court  held  that  it  was  thereby  de- 
prived of  jurisdiction,  as  the  suit  was  brought  in  the  district 
of  defendant's  residence,  and,  under  the  law,  where  jurisdiction 
is  founded  not  only  on  diverse  citizenship  within  the  meaning  of 
the  judiciary  act  as  amended,  the  suit  can  be  brought  only  in  the 
district  of  which  the  defendant  is  an  inhabitant.  The  same  rul- 
ing was  made  in  other  circuits.  See  Cound  v.  A.  T.  &  S.  F.  Ry. 
Co.,  173  Fed.  527  (1909),  W.  D.  Tex.;  Whittaker  v.  I.  C.  Ry., 
176  Fed.  130,  C.  C.  La.  Prior  to  this  amendment  of  1910,  the 
act  made  no  provision  of  the  survival  of  the  action  so  given  for 
an  injury  sustained  in  the  event  of  the  death  of  the  injured 
party.     See  Fulgham  v.  Midland  Valley  (1909),  167  Fed.  660. 

§  535.  The  amendment  of  1910  not  retroactive. — In  this 
Newell  Case,  the  matter  of  jurisdiction  came  before  the  •  court 
after  the  amendment  of  1910  had  been  adopted.  The  court 
said  that  the  amendment  of  1910  did  not  confer  jurisdiction 
upon  pending  suits,  and  the  very  fact  that  such  an  enactment 
was  deemed  necessary  by  congress,  was  persuasive  that  prior 
thereto  such  action  could  only  be  brought  in  accordance  with 
the  acts  conferring  jurisdiction  upon  the  circuit  court;  and  as 
the  jurisdiction  sought  was  not  founded  only  upon  diverse  citi- 
zenship, but  upon  a  federal  right,  the  suit  could  be  brought  only 
in  the  district  of  defendant's  residence. 

The  Act  of  1910  removes  this  difticulty  as  to  actions  thereafter 


§    536]   .  THE   EMPLOVEKS"    LlAl'.ll.n  \     ACT.  619 

brought,  so  that  suits  can  now  be  filed  in  the  district  of  the  resi- 
dence of  the  defendant,  or  in  which  the  cause  of  action  arises,  or 
in  which  the  defendant  is  doing  business  during  the  time  of  com- 
mencing the  action. 

§  536.  What  is  employment  in  interstate  commerce? — The 
most  difficult  (luestion  in  the  application  of  the  act  is  the  deter- 
mination of  what  is  employment  in  interstate  commerce  within 
the  meaning  of  the  act.  The  act  of  1006  was  declared  invalid,  for 
the  reason  that  it  applied  to  employes  of  interstate  carriers, 
whether  those  employes  were  employed  in  interstate  or  intrastate 
commerce;  so  it  must  be  proven  that  the  employes  are  engaged  in 
intrastate  commerce  in  order  to  sustain  a  recovery  under  the  act. 
Thus  the  same  employes  may  be  employed  at  times  in  interstate 
and  at  times  in  intrastate  service,  as  to  the  same  track,  and  the 
same  equipment  and  in  the  same  stations  are  used  for  both  kinds 
of  traffic. 

In  Taylor  v.  S.  Ry.  Co.,- 178  Fed.  380,  1910.  it  was  held  that  a 
member  of  a  railroad  bridge  gang,  injured  while  engaged  within 
the  scope  of  his  employment  in  repairing  bridges  by  an  alleged  de- 
fective scaffold,  though  his  duty  required  worlc  in  the  repair  of 
bridges  in  different  states,  was  not  engaged  in  interstate  com- 
merce. On  the  other  hand,  it  was  held  in  Zil^os  v.  Ore.  R.  &  N.  Co., 
supra,  that  a  section  hand  working  on  the  track  of  the  railroad 
over  which  both  interstate  and  intrastate  trains  moved  was 
employed  in  interstate  commerce  within  the  meaning  of  the  act. 
In  that  case,  the  court  said  that  where  the  employment  necessarily 
and  directly  contributes  to  the  more  extended  use,  and  without 
which  interstate  traffic  could  not  be  carried  on  at  all,  no  reason 
appears  for  denying  the  power  over  the  one.  although  it  may  in- 
directly contribute  to  the  other. 

The  particular  question  is  an  apt  illustration  of  the  intricacy 
to  which  our  dual  system  of  government  often  leads ;  but  the  in- 
tricacy is  but  an  incident,  and  it  can  ncitlier  defeat  nor  impair  the 
power  of  congress  over  interstate  commerce. 

In  Colasurdo  v.  C.  R.  R.  of  N.  J..  ISO  Fed.  832,  the  court  held 
that  a  track  walker  injured  while  assisliiig  in  repairing  a  switch  in 
a  railroad  yard,  and  injur*  d  throus.;li  flie  negligence  of  his  fellow 
employes,  was  engaged  in  inferstato  eonnnerce.  and  was  entitled 
to  the  right  secured  by  the  act ;  and  that  the  statute  did  not  say 


620  THE  employers'  ll^ility  act.  [§  537 

that  the  injury  must  arise  from  an  act  done  in  interstate  com- 
merce, and  that  it  was  immaterial  whether  the  train  was  engaged 
-in  interstate  commerce  or  not. 

§  537.  Concurrent  jurisdiction  of  the  state  courts. — There  is 
no  exclusive  jurisdiction  in  the  federal  courts  declared  in  this 
act ;  but,  on  the  contrary,  in  the  amendment  of  1910  it  specifically 
provided  in  section  6,  as  amended,  that  the  jurisdiction  of  the 
courts  of  the  United  States  under  this  act  shall  be  concurrent 
with  the  courts  of  the  several  states,  and  no  case  arising  under 
this  act  and  brought  in  any  court  of  competent  jurisdiction  shall 
be  removed  to  any  court  of  the  United  States.  This  amendment 
was  enacted  after  the  opinion  in  Hoxie  v.  N.  Y.,  N.  H.  &  H.  R.  R., 
82  Conn.  352,  wherein  the  court  declined  jurisdiction  of  a  suit 
asserting  rights  under  this  act,  upon  the  ground  among  other 
things  that  congress  did  not  intend  that  jurisdiction  arising 
under  this  act  should  be  exercised  by  the  state  courts. 

It  has  also  been  held  (see  Whittaker  v.  I.  C.  Ry.,  supra)  that 
where  the  petition  states  facts  which  bring  the  case  within  the 
Employers  Liability  Act,  it  is  covered  by  the  act,  whether  speci- 
fically declared  so  or  not. 

In  the  Colasurdo  Case,  supra,  also  prior  to  the  amendment  of 
1010,  the  court  held  in  an  action  removed  from  the  state  court, 
that  it  was  not  subject  to  remand,  though  it  appeared  in  the  trial 
that  the  parties  were  citizens  of  the  same  state,  if  it  appeared 
from  the  complaint  that  plaintiff  sought  to  recover  under  the 
Employers  Liability  Act,  and  where  such  an  averment  was  made, 
the  federal  jurisdiction  existed,  even  though  the  complaint  was 
dismissed  because  the  plaintiff  was  not  a  person  so  employed. 

It  has  also  been  held  prior  to  the  amendment  of  1910  in  Miller 
V.  I.  C.  R.  R.,  168  Fed.  982,  that,  where  it  did  not  appear  from 
plaintiff's  declaration  that  the  construction  of  this  act  was  in- 
volved, the  cause  was  not  removable  as  arising  under  the  laws  of 
tlie  United  States.  Under  this  amendment  declaring  concurrent 
jurisdiction  in  the  state  and  federal  courts  plaintiff  in  suing  in 
the  latter  must  show  in  his  petition  either  diverse  citizenship,  or 
as  assertion  of  his  right  of  recovery  under  this  statute,  and  in 
either  case,  he  must  also  show  the  jurisdictional  amount  of 
$2,000.00  (after  January  1,  1912,  $3,000.00)  in  controversy. 
§  48. 


§    539]  TllK    KMPLOYEKS'    I.IAHII.ITV    ACT.  621 

§  538.  Prohibition  of  contracting-  out  of  the  act. — It  was  .said 
by  Justice  Moody  in  liis  (.lissciitin^  (jpinion  in  llic  Iloward  case 
that  this  prohibition  of  contracting  out  ol'  the  ai-t  wliich  was  con- 
tained also  in  the  act  of  190G,  that  this  elause  was  open  to  possi- 
ble objeetions,  but  without  intimating  any  opinion  he  said  that 
part  of  the  act  was  separable  and  independent  of  the  remainder. 
This  was  also  commented  on  in  the  Zikos  case,  that  it  was  not  in- 
volved in  tliat  ease,  and  the  eouit  said  that  in  any  event  it  was. 
clearly  separable.  The  purpose  of  this  enactment  was  obviously 
to  make  legislation  effective  by  prohibiting  contracts  of  exemption 
against  the  liability  created  by  the  act.  Such  contracts  against 
liability  under  statutory  requirements  have  been  held  violative- 
of  ])ublic  policy,  irrespective  of  statutory'  prohibition.  The  pro- 
liibition  of  contracting  out  of  a  remedial  statute  would  seem  dis- 
tinguishable from  a  contract  of  exemption  made  l)y  v.n  express 
agent  of  ll!c  railroad  company,  entered  into  as  a  condition  of  his 
employment,  such  as  was  held  valid  in  B.  &  0.  Ry.  v.  Voiglit, 
176  U.  S.  497,  44  Fed.  560. 

§  539.  The  superseding-  of  state  statutes. — It  was  held  in 
Fulgham  v.  :\Jidland  Valley  Ky.  AV.  D.  of  Ark..  167  Fed.  660, 
1909,  that  the  act  of  1908  supersedes  all  state  statutes  regulating 
the  relations  of  interstate  employers  and  employes  engaged  in 
interstate  commerce.  The  court  said  that  the  whole  act  clearly 
showed  that  congress  undertook  the  regulation  of  the  relation  of 
employers  and  employes,  that  it  covered  and  overlapped  the 
whole  -state  legislation,  and  was  therefore  conclusive.  This  was 
also  the  ruling  in  the  Cound  Case,  where  the  act  of  1908  was  held 
to  supersede  the  common  law  in  the  territories,  in  respect  to  such 
liability.  The  supreme  courts  of  Wisconsin  and  ^Missouri  held 
that  this  was  in  accordance  with  the  rule  of  the  state  courts  of 
those  states  in  relation  to  tiie  nine  hour  law  of  congress,  supra. 

§  540.  Right  of  removal  under  the  act. — The  provision  of  the 
amendment  of  1910,  providing  that  no  case  arising  under  the  act 
and  brought  in  the  state  court  of  competent  jurisdiction  should 
be  removed  to  any  court  of  the  United  States,  was  construed  in 
Van  Brimmer  v.  Texas,  etc.,  R..Co.,  190  Fed.  394,  Oct.  1911,  by 
C.  C.  E.  D.  Tex.,  Avhere  it  was  held  that  this  amendment  did  not 
deprive  a  litigant  of  his  right  to  remove  his  case  to  the  federal 
court,  if  he  had  that  riulit.  by  reason  of  diverse  citizenship  or  on 
account  ol:  in-ejudiee  or  local  inilnence,  but  only  that  when  a 
cause  arose  under  the  act  the  suit  should  not  for  that  reason  be 
removed  to  the  federal  court. 


TPIE  HOURS  OF  SERVICE  ACT  OF  1907. 

§  541.  The  act  of  1907. 

542.  The  constitutionality  of  the  act  sustained. 

543.  The  statute  not  void  for  uncertainty. 

544.  The  Interstate  Commerce  Commission  had  authority  to  require 

reports. 

545.  No   privilege   to   a  corporation   or   corporation   officers   against 

self-incrimination. 

§  541.   The  act  of  1907. 

AN  ACT  To  promote  the  safety  of  employees  and  travelers  upon  rail- 
roads by  limiting  the  hours  of  service  of  employees  thereon. 

Be  it  enacted  hy  the  Senate  and  House  of  Representatives  of 
the  United  States  of  America  in  Congress  assemhled,  That  the 
provisions  of  this  Act  shall  apply  to  any  common  carrier  or  car- 

[Common  carrier  and  employees   subject  to  act.] 

riers,  their  officers,  agents,  and  employees,  engaged  in  the  trans- 
portation of  passengers  or  property  by  railroad  in  the  District  of 
Columbia  or  any  Territory  of  the  United  States,  or  from  one  State 
or  Territory  of  theUnited  States  or  the  District  of  Columbia  to 
any  other  State  or  Territory  of  the  United  States  or  the  District 
of  Columbia,  or  from  any  place,  in  the  United  States  to  an 
adjacent  foreign  country,  or  from  any  place  in  the  United  States 
through  a  foreign  country  to  any  other  place  in  the  United  States. 

[Cleaning  of  term  "railroad."] 

The  term  ''railroad"  as  used  in  this  Act  shall  include  all  bridges 
and  ferries  used  or  operated  in  connection  with  any  railroad,  and 
also  all  the  road  in  use  by  any  common  carrier  operating  a  rail- 
road, whether  owned  or  operated  under  a  contract,  agreement,  or 

[Meaning   o£  term  "employees."] 

lease;  and  the  term  ''employees"  as  used  in  this  Act  shall  be* held 
to  mean  persons  actually  engaged  in  or  connected  with  the  move- 
ment of  any  train. 

[Sixteen  hours  the  maximum  continuous  service  of  train- 
men.] 

Sec.  2.  That  it  shall  be  unlawful  for  any  common  carrier,  its 
officers  or  aeents.  subject  to  this  Act  to  require  or  permit  any 
employee  subject  to  this  Act  to  be  or  remain  on  duty  for  a  longer 
period  than  sixteen  consecutive  hours,  and  whenever  any  such 
employee  of  such  common  carrier  shall  have  been  continuously  on 
duty  for  sixteen  hours  he  shall  be  relieved  and  not  required  or 

[Ten   consecutive  hours   off  duty.] 

permitted  again  to  go  on  duty  until  he  has  had  at  least  ten  con- 

[G22J 


§    5-lOJ  TUE    HOURS    OF    SEUVKK     MT    <)K    llM)7.  023 

secutivo  lioiirs  off  duty;  and  no  siieli  ciiiployec  who  iuis  been  on 
dutj^  .sixteen  hours  in  the  agj^rcfrate  in  wny  twenty-four-hour 
period  sh;dl  be  i-equii'ed  or  permitted  to  continue  or  atrain  go  on 
duty. without  liavinj,'  had  at   least  ei^rht  eonsecutive   hours  oil' 

[Service  hoiiri*  of  telCKruph  and  telephone  overatorm.] 

duty:  Vrovidcd,  That  no  operator,  train  dispatelier,  or  other  em- 
ployee who  by  tlie  use  of  the  telegraph  or  telephone  dispatches,  re- 
ports, transmits,  receives,  or  delivers  orders  pertaining  to  or 
affecting  train  movements  shall  be  required  or  permitted  to  be  or 
remain  on  duty  for  a  longer  period  than  nine  hours  in  any 
twenty-four-hour  period  in  all  towers,  offices,  places,  and  stations 
continuously  operated  night  and  day,  nor  for  a  longer  period 
than  thirteen  hours  in  all  towers,  offices,  places,  and  stations  op- 
erated only  during  the  daytime,  except  in  case  of  emergency, 
when  the  employees  named  in  this  proviso  may  be  permitted  to  be 
and  remain  on  duty  for  four  additional  hours  in  a  twenty-four- 
hour  pei'iod  on  not  exceeding  three  days  in  any  week:  Provided 

[Commission    may  extenil    iKrioil.l 

farther,  The  Interstate  Commerce  Commission  may  after  full 
hearing  in  a  particular  case  and  for  good  cause  shown  extend  the 
period  within  which  a  common  carrier  shall  comply  with  the  pro- 
visions of  this  proviso  as  to  such  case. 

[Penalty  for  violation.] 

Sec.  3.  That  any  such  common  carrier,  or  any  officer  or  agent 
thereof,  requiring  or  permitting  any  employee  to  go,  be,  or  re- 
main on  duty  in  violation  of  the  second  section  hereof,  shall  be 
liable  to  a  penalty  of  not  to  exceed  five  hundred  dollars  for  each 
and  every  violation,  to  be  recovered  in  a  suit  or  suits  to  be 
brought  by  the  United  States  district  attorney  in  the  district 

[Pro.secutlons.l 

court  of  the  United  States  having  jurisdiction  in  the  locality 
where  such  violation  shall  have  been  committed;  and  it  shall  be 
the  duty  of  such  district  attorney  to  bi'ing  such  suits  upon  satis- 
factory information  being  lodged  with  him ;  but  no  such  suit  shall 
be  brought  after  the  expiration  of  one  year  from  the  date  of  such 
violation;  and  it  shall  also  be  the  duty  of  the  Interstate  Com- 
merce Commission  to  lodge  with  the  proper  district  attorneys  in- 
formation of  any  siTch  violations  as  may  come  to  its  knowledge. 
In  all  prosecutions  under  this  Act  the  common  carrier  shall  be 
deemed  to  have  had  knowledge  of  all  acts  of  all  its  officers  and 
agents:  Provided,  That  the  provisions  of  this  Act  shall  not  apply 

[Unavoidable,  accidents,  etcl 

in  any  case  of  casualty  or  unavoidable  accident  or  the  act  of  God ; 
nor  where  the  delay  was  the  result  of  a  cause  not  known  to  the 
carrier  or  its  officer  or  agents  in  charge  of  such  employee  at  the 
time  said  employee  left  a  terminal,  and  which  could  not  have  been 

[^V^ock^nfc,   etc.,   crews.] 

foreseen  :  Prondcd  further.  That  the  provisions  of  this  Act  shall 
not  apply  to  the  crews  of  wrecking  or  relief  trains. 


624  THE   HOURS   OF   SERVICE   ACT    OP    1907.  [§    541 

[enforcement.] 

Sec.  4.  It  shall  be  the  duty  of  the  Interstate  Commerce  Com- 
mission to  execute  and  enforce  the  provisions  of  this  Act,  and  all 
powers  granted  to  the  Interstate  Commerce  Commission  are  here- 
by extended  to  it  in  the  execution  of  this  Act. 

[Eflfectlve.] 

Sec.  5.  That  this  Act  shall  take  effect  and  be  in  force  one  year 
after  its  passage. 

Approved  JMarch  4,  1907. 

§  542.  The  constitutionality  of  the  act  sustained. — In  B.  &  0. 

R.  Co.  V.  Interstate  Conunerce  Commission,  221  U.  S.  — ,  55  L. 
Ed.  878,  the  supreme  court  in  May,  1911,  affirmed  the  circuit 
court  of  Maryland  in  sustaining  a  demurrer  to  a  bill  of  the  B.  & 
0.  Railroad  seeking  to  enjoin  the  enforcement  of  an  order  of  th(; 
Interstate  Commerce  Commission  requiring  monthly  reports 
from  railroads  subject  to  this  act.  It  was  claimed  that  penalties 
were  not  limited  to  interstate  commerce,  but  applied  to  intrastate 
railroads  and  to  employes  engaged  in  local  l)usiness.  The  court 
said  that  the  statute  in  its  scope  was  materially  different  from  the 
employers  liability  act  of  1906,  as  there  the  act  applied  to  any 
employes  of  the  carrier,  while  in  this  statute  the  limiting  words 
governed  employes  as  well  as  the  carriers.  The  court  said,  even 
if  it  were  true  that  the  interstate  and  the  intrastate  operations 
of  its  carriers  w^ere  so  interwoven,  that  it  was  impracticable  for 
them  to  divide  their  employes  in  such  manner  that  the  duties  of 
those  who  are  engaged  in  connection  with  interstate  commerce 
could  not  be  confined  to  that  commerce  exclusively ;  the  constitu- 
tional authority  of  congress  could  not  be  thus  denied  its  effective 
exercise  in  its  powers  to  provide  for  the  safety  of  employes  and 
travelers.  Congress  was  not  limited  to  laws  relating  to  mechan- 
ical appliances,  but  could  recognize  that  the  length  of  hours  of 
service  had  a  direct  relation  to  the  efficiency  of  human  agencies 
upon  which  protection  to  life  and  property  necessarily  depends. 
The  power  of  congress  therefore  to  limit  the  hours  of  labor  of 
those  employes  engaged  in  interstate  transportation  could  not  be 
defeated  either  by  prolonging  the  period  of  service  through  other 
requirements  of  the  carriers,  or  by  the  commanding  of  duties  re- 
lating to  interstate  and  intrastate  operations. 

§  543.  The  statute  not  void  for  uncertainty. — The  court  said 
that  the  words  "excent  in  case  of  emergency"  in  section  two  did 
not  make  the  application  of  the  act  so  uncertain  as  to  destroy  its 


§    544]  THE    HOURS   OP   SERVICE    ACT    OF    lilOT.  625 

validity.  Congress  haJ  the  power  to  use  the  general  description, 
and  in  the  legal  sense  there  was  no  uncertainty.  Congress  hy  an 
appropriate  description  of  an  exceptional  class  had  established  a 
standard  with  respect  to  which  cases  that  arise  must  be  adjudged. 
The  court  said  the  broad  scope  of  the  proviso  in  section  three 
even  if  it  was  construed  to  include  everything  that  could  be  in 
eluded  in  the  emergency  clause  in  section  two  would  not  be 
merely  a  duplication  which  would  not  invalidate  the  act. 

§  544.  The  Interstate  Commerce  Commission  had  authority 
to  require  reports.— In  the  same  case  the  court  said  that  the 
authority  to  i-equire  the  secretary  or  other  officers  of  the  carriers 
subject  to  this  act  to  make  monthly  reports  under  oath  showing 
the  instances  where  employes  subject  to  the  act  had  rendered  ex- 
cess services,  and  giving  the  cause  and  explanatory  facts,  if  any, 
or  where  there  had  been  no  excess  service  to  make  the  separate 
oath  to  that  effect,  was  conferred  upon  the  Interstate  Commerce 
Commission    by    the    provision    of    section    four    of    the    act; 
in   connection    ^^ath    the    amendments   of   the    Interstate    Com- 
merce  Act  of  June   18,   1910,    authorizing  the   commission   to 
require  the  carriers  to  file  periodical  or  special  reports  under 
oath  concerning  any  matter  upon  which  it  is  by  law  authorized 
or  required  to  keep  itself  informed  or  which  it  is  required  to  en- 
force. 

§  545.  No  privileg-e  to  a  corporation  or  corporation  officers 
against  self-incrimination.— In  the  same  ease  it  was  ruled  tiiat 
there  was  no  violation  of  the  constitutional  provision  against  un- 
reasonable searches  and  seizures  in  the  requirements  of  the  re- 
ports under  this  act,  and  neither  the  corporation  subject  to  the 
act  nor  the  officers  of  the  corporation  could  claim  a  privilege 
against  self-incrimination  to  justify  refusal  to  make  such  reports. 
The  transactions  to  which  the  required  reports  related  were  cor- 
porate transactions  subject  to  the  regulating  power  of  congress 
and  the  officers  of  the  corporation  are  liouud  by  the  corporate 
obligation,  nnd  could  not  claim  a  personal  privilege  in  hostility 
to  the  requirement. 


40 


THE  TWENTY-EIGHT  HOUR  LIVE  STOCK  TRANSPOR- 
TATION LAW. 

§  546.  The  twenty-eight  hour  act. 

547.  Delivery  to  connecting  carrier. 

548.  Accidental  or  unavoidable  causes  defined. 

549.  Violation  of  rules  and  regulations  of  company  no  defense. 

550.  Press  of  business. 

551.  Requested  confinement — Question  for  jury. 

552.  Burden  of  proof. 

553.  The  government  is  entitled  to  writ  of  error. 

554.  Pleadings. 

555.  "Wilfully"  construed. 

556.  Who  subject  to  the  act. 

557.  Place  of  bringing  suits. 

558.  Procedure— Unit  of  offense. 

AN  ACT  To  prevent  cruelty  to  animals  while  in  transit  by  railroad 
or  other  means  of  transportation  from  one  state  or  territory  or  the 
District  of  Columbia  into  or  through  another  state  or  territory  or  the 
District  of  Columbia,  and  repealing  sections  forty-three  hundred  and 
eighty-six,  forty-three  hundred  and  eighty-seven,  forty-three  hundred 
and  eighty-eight,  forty-three  hundred  and  eighty-nine,  and  forty- 
three  hundred  and  ninety  of  the  United  States  revised  statutes. 

§  546.  The  twenty-eight  hour  live  stock  transportation  law. 

Be  it  enacted  by  the  Senate  and  House  of  Kepyesentatives  of 
the  United,  States  of  America  in  Congress  assembled.  That  no 
railroad,  express  company,  car  company,  common  carrier  other 
than  by  water,  or  the  receiver,  trustee,  or  lessee  of  any  of  them, 
whose  road  forms  any  part  of  a  line  of  road  over  which  cattle, 
sheep,  swine,  or  other  animals  shall  be  conveyed  from  one  State 
or  Territory  or  the  District  of  Columbia  into  or  through  another 
State  or  Territory  or  the  District  of  Columbia,  or  the  ownei's  or 
masters  of  steam,  sailing,  or  other  vessels  carrying  or  transport- 
ing cattle,  sheep,  swine,  or  other  animals  from  one  State  or  Terri- 
tory or  the  District  of  Columbia  into  or  through  another  State  or 
Territory  or  the  District  of  Columbia,  shall  confine  the  same  in 
cars,  boats,  or  vessels  of  any  description  for  a  period  longer  than 
twenty-eiglit  consecutive  hours  without  unloading  the  same  in  a 
humane  manner,  into  properly  equipped  pens  for  rest,  water 
and  feeding,  for  a  period  of  at  least  five  consecutive  hours,  .un- 
less prevented  by  storm  or  by  other  accidental  or  unavoidable 
causes  which  cannot  be  anticipated  or  avoided  by  the  exercise  of 
due  diligence  and  foresight:  Provided,  That  upon  the  written 
request  of  the  owner  or  person  in  custody  of  that  particular 

[626] 


§    545]  TIIK    TWENTY-EIGHT    HOIK    LAW.  G27 

shipment,  wliicii  wiilicji  r('(|ucst  shall  be  separate  and  apart 
from  any  pjintcd  hill  of  l.idinjj,  or  other  railroad  form,  the  time 
of  confineiiicnl  ni.iy  he  (  xli'iidcd  lo  thii'ty-six  liours.  In  estimat- 
ing such  confinement,  the  time  consumed  in  loadinf?  and  iinload- 
inji  shall  not  he  consicicied.  I)iit  the  time  during'  wliicli  the  ani- 
mals have  been  eonfiuetl  will. out  such  rest  or  food  or  water  on 
connecting  roads  shall  l)e  included,  it  l)einjj:  the  intent  of  this 
Act  to  prohibit  Hicir  continuous  confinement. beyond  the  period 
of  twenty-eight  houis,  except  upon  the  contingencies  hereinbe- 
fore stated-.  Provided,  That  it  shall  not  be  required  that  sheep 
be  unloaded  in  the  nighttime,  but  where  the  time  expires  in  the 
nighttime  in  case  of  shcej)  the  same  may  continue  in  transit  to  a 
suitable  place  for  unloading,  subject  to  the  aforesaid  lindtation 
of  thirty-six  hours. 

Sec.  2.  That  animals  so  unloaded  shall  be  properly  fed  and 
watered  during  such  rest  either  by  the  owner  or  person  having 
the  custody  thereof,  or  in  case  of  his  default  in  so  doing,  then  by 
the  railroad,  expi-ess  company,  car  company,  common  carrier 
other  than  by  water,  or  the  receiver,  trustee,  or  lessee  or  any  of 
them,  or  by  the  owners  or  niasters  of  boats  or  vessels  trans[)ort- 
ing  the  same,  at  the  reasonable  expense  of  the  owner  or  person 
in  custody  thereof,  and  such  railroad,  express  company,  ear  com- 
pany, eonnnon  carrier  other  than  by  water,  receiver,  trustee,  or 
lessee  of  any  of  them,  owners  or  masters,  shall  in  such  ease  have 
a  lien  upon  such  animals  for  food  care  and  custody  furnished, 
collectible  at  their  destination  in  the  same  manner  as  the  trans- 
portation charges  are  collected,  and  shall  not  be  liable  for  any 
detention  of  such  animals,  when  such  detention  is  of  reasonable 
duration,  to  enal)le  compliance  with  section  one  of  this  Act;  but 
nothing  in  this  section  shall  ])e  construed  to  prevent  the  owner 
or  shipper  of  animals  from  furnishing  food  therefor,  if  he  so 
desires. 

Sec.  '•\.  That  any  railroad,  exjiress  company,  car  eomjiany, 
common  carrier  other  than  by  water,  or  the  receiver,  trustee,  or 
lessee,  of  any  of  them,  or  the  master  or  owner  of  any  steam,  sail- 
ing, or  other  vessel  who  knowingly  and  willfully  fails  to  comply 
with  the  provisions  of  the  two  i)rcctVling  sections  shall  for  every 
such  failure  be  liable  for  and  forfeit  and  pay  a  penalty  of  not 
less  than  hundred  nor  more  than  five  hundred  dollars :  Pro- 
vidcd:  That  when  animals  are  carried  in  cars,  boats,  or  other 
vessels  in  which  they  can  and  do  liave  proper  food,,  water,  space, 
and  opportunity  to  rest  the  provisions  in  regard  to  their  lieiug 
unloaded  shall  not  ai)ply. 

Skc.  4.  That  the  penalty  created  by  the  i)receding  section 
shall  l)e  recovered  by  civil  action  in  the  name  of  the  United  States 
in  the  circuit  oi-  district  court  holden  within  the  district  where 
the  violation  niny  have  been  committed  or  the  jierson  or  corpora- 
tion resides  or  carriers  on  business;  and  it  shall  be  the  duty  of 


62S  THE   TWENTY-EIGHT    HOUR   LAW.  [§    546 

the  United  States  attorneys  to  prosecute  all  violations  of  this  Act 
reported  by  the  Secretary  of  Agriculture,  or  which  come  to 
their  notice  or  knowledge  by  other  means. 

Sec.  5.  That  sections  forty-three  hundred  and  eighty-six,  forty- 
three  hundred  and  eighty-seven,  forty-three  hundred  and  eighty- 
eight,  forty-three  hundred  and  eighty-nine,  and  forty-three  hun- 
dred and  ninety  of  the  Eevised  Statutes  of  the  United  States  be, 
and  the  same  are  hereby,  repealed. 

Approved,  June  29,  ^906. 

§  547.  Delivery  to  connecting  carrier. — It  was  held  in  the  dis- 
trict court,  northern  district  California  in  U.  S.  v.  Southern 
Pac.  R.  Co.,  157  Fed.  459  (1907),  that  a  railroad  company  which 
delivers  its  cars  containing  such  stock  to  a  connecting  carrier 
without  keeping  the  same  confined  longer  than  a  period  of 
twenty-eight  hours  is  relieved  from  responsibility.  See  also 
M.  K.  &  T.  R.  Co.  V.  U.  S.,  178  Fed.  15  (1910). 

§  548.  Accidental  or  unavoidable  causes  defined. — "An  acci- 
dental or  unavoidable  cause  wliieh  cannot  be  anticipated  or 
avoided  by  the  exercise  of  due  diligence  and  foresight"  is  one 
which  cannot  be  avoided  by  that  degree  of  prudence,  foresight, 
care  and  caution  which  the  law  requires  of  every  one  under  the 
circumstances  of  the  particular  case,  and  which  would  have  been 
exercised  by  a  man  of  ordinary  prudence  under  such  circum- 
stances. United  States  v.  Southern  Pacific  R.  Co.,  178  Fed.  15. 
On  the  other  hand  in  Montana  Cent.  R.  Co.  v.  U.  S.,  164  Fed.  400 
(1908),  it  -was  held  that  the  twenty-eight  hour  law  is  not  a 
criminal  statute  and  the  violation  was  not  excused  by  over- 
sight or  unintentional  neglect. 

As  to  the  accidental  and  unavoidable  that  come  within  the 
section  of  the  statute,  see  U.  S.  v.  A.,  T.  &  S.  F.  R.  Co.,  166  Fed. 
160  (1908),  that  a  company  must  know  how  long  a  connecting 
carrier  had  kept  the  animals  without  food  or  water  and  must 
learn  such  fact  at  its  peril.  U.  S.  v.  St.  Joe  Stock  Yds.  Co., 
181  Fed.  625  (1911). 

§  549.  Violation  of  rules  and  regulation  of  company  no  de- 
fense.—In  U.  S.  V.  Atlantic  Coast  Line,  173  Fed.  764,  C.  C.  A. 
4th  Cir.  1909,  the  fact  that  the  company  had  made  rules  and 
regulations  requiring  the  employes  to  comply  with  the  act  and 


§    553]  THE    TWENTY-EIGHT    HOUR    LAW.  U29 

that  its  violation  was  the  act  of  the  eiuploye  in  disobeying  the 
rules  was  no  defense. 

§  550.  Press  of  business. — Nor  does  press  of  business  excuse 
a  violation  of  tlie  Act.  U.  S.  v.  Union  Pacific  K.  Co.,  IG'J  Fed. 
€5,  1909. 

§  551.  Requested  confinement : — Question  for  jury. — In  U.  S. 
V.  Terminal  Stock  Yards  Co.,  172  Fed.  452  (1909),  it  was  held 
that  the  fii-st  thirty-six  hour  conlinement  could  not  be  counted 
against  the  carrier  if  requested  by  the  owner.  And  the  period 
beyond  the  twenty-eight  hours  (or  thirty-six  hours  if  requested). 
See  U.  S.  V.  Sioux  Cily.  etc.,  Co..  102  Fed.  556.  In  :\r.  K.  &  T. 
R.  Co.  V.  U.  S.,  178  Fed.  15,  8th  Cir.  1910,  it  was  held  that  the 
question  of  conformity  to  the  request  of  extension  was  for  the 
court  and  not  the  jury  because  a  w^ritten  instrument  was  in- 
volved. 

§  552.  Burden  of  proof. — The  government  is  required  to  es- 
tablish its  case  only  by  a  preponderance  of  evidence  and  each  in- 
dependent shipment  is  a  basis  for  a  separate  charge.  U.  S.  v. 
Southern  Pacific,  157  Fed.  459;  M.  K.  &  T.  R.  Co.  v.  U.  S..  178 
Fed.  15,  eighth  circuit;  U.  S.  v.  N.  Y.  &  C.  R.  Co.,  168  Fed.  699. 
C.  C.  A.  second  circuit;  U.  S.  v.  B.  &  O.  S.  W.  R.  Co.,  159  Fed. 
33,  C.  C.  A.  sixth  circuit;  U.  S.  v.  Oregon  &  R.  N.  Co.,  163  Fed. 
642.  On  the  other  hand  it  was  lield  in  the  district  court  of  Ken- 
tucky (U.  S.  V.  L.  &  N.  R.  Co.,  165  Fed.  936),  that  the  twenty- 
eight  hour  law  is  a  criminal  statute  and  although  the  action  is 
civil  in  form  the  defendant  is  presumed  innocent  until  proven 
guilty  beyond  a  reasonable  doubt.  As  to  burden  of  proof,  see  U. 
S.  V.  Oregon  Short  Line,  160  Fed.  526. 

§  553.  The  government  is  entitled  to  writ  of  error, — And  the 
government  is  entitled  to  a  Avrit  of  error,  l'.  S.  v.  X.  Y.  C,  etc., 
Co.,  168  Fed.  699,  second  circuit;  U.  S.  v.  B.  &  0.  S.  W.  R.  Co., 
159  Fed.  38,  CCA.  sixth  circuit. 

§  554.  Pleadings. — As  to  the  necessity  of  pleading  the  excep- 
tions of  the  statute  see  N.  Y.  &  C.  H.  R.  Co.  v.  U.  S.,  165  Fed. 
833. 


630  THE    TWEXTY-EIGIIT    HOrR    LAW.  [§    554 

§  555.  "Wilfuly"  construed. — For  case  construing  the  word 
"wilfully"  as  used  in  the  statute,  see  U.  S.  v.  A.,  T.  &  S.  F.  R. 
Co.,  166  Fed.  160;  X.  Y.  Cent.  &  H.  R.  Co.  v.  U.  S.,  165  Fed.  833. 
first  circuit;  Houston,  etc.,  Co.  v.  U.  S.,  168  Fed.  895;  U.  S.  v. 
Sioux  City,  etc.,  Co.,  162  Fed.  556;  U.  S.  v.  Union  Pacific  R.  Co., 
169  Fed.  65;  M.  K.  &  T.  R.  Co.  v.  U.  S.,  178  Fed.  15. 

§  556.  Who  subject  to  the  act.— In  U.  S.  v.  St.  Joseph  Stock 
Yards  Co.,  168  Fed.  625,  it  is  held  that  a  stock  yard  company 
doing  what  is  known  as  the  terminal  business  was  held  subject 
to  the  provisions  of  the  act ;  to  the  same  effect  is  U.  S.  v.  Sioux 
City  Stock  Yards  Co.,  162  Fed.  556. 

§  557.  Place  of  brining-  suits. — As  to  the  place  of  bringing 
suit,  see  Southern  Paeitic  R.  (^o.  v.  U.  S.,  171  Fed.  364;  St.  L.  & 
St.  F.  R.  Co.  V.  U.  S.,  169  Fed.  69,  eighth  circuit. 

§  558.  Procedure— Unit  of  offense.— In  B.  &  0.  S.  W.  R.  Co. 

V.  IT.  S.,  220  U.  S.  94,  55  L.  Ed.  384  (1911),  the  act  was  con- 
strued by  the  supreme  court  modifying  the  decision  of  the  United 
States  Circuit  Court  of  Appeals  of  the  6th  Circuit,  159  Fed.  33, 
and  it  was  held  that  but  one  penalty  could  be  recovered  against 
a  carrier  for  the  loading,  and  that  other  separate  and  distinct 
penalties  accrued,  as  the  time  for  the  lawful  confinement  of  the 
cattle  loaded  at  later  periods  successively  expired.  The  court 
said  that  the  statute  was  not  primarily  intended  for  the  benefit 
of  the  owners  but  to  prevent  cruelty  to  animals  in  transit.  The 
court  also  held  that  the  aggregate  sum  of  the  possible  penalties 
is  the  amount  in  dispute  for  the  purpose  of  sustaining  the  ap- 
pellate .jurisdiction  of  the  supreme  court;  and  that  the  circuit 
court  may  properly  consolidate  under  U.  S.  R.  S.  921  several  ac- 
tions by  the  ITnited  States  against  a  carrier  to  recover  the  penal- 
ties prescribed  by  this  act. 


APPENDIX 


1.  The  Commerce  Court  Act. 

2.  National  Trade  Union  lucorijoration  Act. 

3.  Arbitration  Act. 

4.  Interlocking  Act. 

5.  Ash  Pan  Act. 

6.  Report  of  Accidents'  Act. 

7.  Rules  of  Practice  before  the  commission. 

8.  Forms  of  procedure  of  commission. 

9.  Rules  of  practice  of  the  commerce  court. 

10.  The  Report  of  National  Securities  Commission   (1911). 

THE  COMMERCE  COURT  ACT  OF  1910. 

(Commerce  Court  and  other  additional  pronsi'ins  in  the  Act  of 
June  18,  1910.)      (Sec.  1.)      That  a  court  of  the  I  nited  States  is 

[Creatiou  and  jiirlMilietion   of  eomnierer  court. 1 

hereby  ereated  which  .^liall  be  known  as  tlie  Coninieree  Court  and 
slinll  liave  the  jurisdiction  now  possessed  by  circuit  courts  of  the 
United  -States  and  the  judges  thereof  over  all  cases  of  the  fol- 
lowing kinds : 

[Cases   to   enforce   coninil!4.sion'N   orilers.] 

•First.  All  cases  for  Die  enforcement,  otherwise  than  l)y  adjudi- 
cation and  collection  of  a  forfeiture  or  penalty  or  by  inlliction  or 
criminal  ])unishment,  of  any  order  of  the  Interstate  Commen-; 
Commission  other  than  foi-  the  j)a\ment  of  money. 

[Cases   to   annul   «'«»niniission's   <»rders.l 

Second.  Cases  brought  to  enjoin,  set  aside,  annul,  or  suspend 
in  whole  or  in  part  any  order  of  the  Interstate  Commerce  Com- 
mission. 

[Certain  cases   under  Elklns  Act.] 

Third.  Such  cases  as  by  section  three  of  the  Act  entitled  "An 
Act  to  further  regulate  commerce  with  foreign  nations  and 
among  the  States,"  approved  February  nineteenth,  nineteen 
hundred  and  three,  are  authorized  to  be  maintained  in  a  circuit 
court  of  the  United  States. 

[Mandamus  iiroceediuKs.l 

Fourth.  All  such  mandannis  proceedings  as  under  tlie  pro- 
visions of  section  twenty  or  section  twenty-three  of  the  Act 
entitled  "An  Act  to  regulate  commerce,"  approved  February 
fourth,  eighteen  hundred  and  eighty-seven,  as  amended,  are  au- 
thorized to  be  maintainc  d  in  a  circuit  court  of  the  United  States. 

[Circuit  court  jurisdiction  jjiven  to  commerce  court.] 

Nothing  contained  in  this  Act  shall  be  construed  as  enlarging 
the  jurisdiction  now  possessed  by  the  circuit  courts  of  the  United 
States  01-  the  judges  thereof,  that  is  hereby  transferred  to  and 
vested  in  the  Commerce  Court. 

[631] 


632  APPENDIX. 

[Exclnsive  jurlscHotion.l 

The  jurisdiction  of  the  Commerce  Court  over  cases  of  the  fore- 
going- classes  shall  be  exclusive ;  but  this  Act  shall  not  affect  the 
jurisdiction  now  possessed  by  any  circuit  court  or  district  court 
of  the  United  States  over  cases  or  proceedings  of  a  kind  not 
within  the  above-enumerated  classes. 

[Composition  of  commerce  court.] 

The  Commerce  Court  shall  be  a  court  of  record,  and  shall  have 
a  seal  of  such  form  and  st3de  as  the  court  may  prescribe.  The 
said  Court  shall  be  composed  of  five  judges,  to  be  from  time  to 

[Term.] 

time  designated  and  assigned  thereto  by  the  Chief  Justice  of  the 
United  States,  from  among  the  circuit  judges  of  the  United 
States,  for  the  period  of  five  years,  except  that  in  the  first  in- 
stance the  Court  shall  be  comi)osed  of  the  five  additional  circuit 
judges  to  be  appointed  as  hereinafter  provided,  who  shall  be 
designated  by  the  I'resident  to  serve  for  one,  two,  three,  four, 
and  five  years,  respectively,  in  order  that  the  period  of  designa- 
tion of  one  of  the  said  judges  shall  expire  in  each  year  thereafter. 

[Vacancies.] 

In  case  of  the  death,  resignation,  or  termination  of  assignment  of 
any  judge  so  designated,  the  Chief  Justice  shall  designate  a  cir- 
cuit judge  to  fill  the  vacancy  so  caused  and  to  serve  during  the 
unexpired  period  for  which  the  original  designation  was  made. 
After  the  year  nineteen  hundred  and  fourteen  no  circuit  judge 
shall  be  redesignated  to  serve  in  the  Commerce  Court  until  the 
expiration  of  at  least  one  year  after  the  expiration  of  the  period 
of  his  last  previous  designation.  The  judge  first  designated  for 
the  five-year  period  shall  be  the  presiding  judge  of  said  court, 
and  thereafter  the  judge  senior  in  designation  shall  be  the  pre- 
siding judge. 

[Salary.] 

Each  of  the  judges  during  the  period  of  his  service  in  the  com- 
merce court  shall,  on  account  of  the  regular  sessions  of  the  court 
being  held  in  the  city  of  Washington,  receive  in  addition  to  his 
salary  as  circuit  judge  an  expense  allowance  at  the  rate  of  one 
thousand  five  hundred  dollars  per  annum. 

[Five  additional  circuit  judges.] 

The  President,  shall,  by  and  with  the  advice  and  consent  of  the 
Senate,  appoint  five  additional  circuit  judges  no  two  of  whom 
shall  be  from  the  same  judicial  circuit,  who  shall  hold  office  dur- 
ing good  behavior  and  who  shall  be  from  time  to  time  designated 
and  assigned  by  the  Chief  Justice  of  the  United  States  for  serv- 
ice in  the  circuit  court  for  any  district,  or  the  circuit  court  of  ap- 
peals for  any  circuit,  or  in  the  commerce  court. 

Tlie  associate  judges  shall  have  precedence  and  shall  succeed 
to  the  place  and  powers  of  the  presiding  judge  whenever  he  may 
be  absent  or  incapable  of  acting  in  the  order  of  the  date  of  their 


THE  co3.:merce  colkt  act.  G33 

[(Quorum.] 

designations.  Four  of  said  jiKlgcs  shall  constitute  a  qnonim, 
and  at  least  a  majoi-i^^y  of  the  Coui-t  sliall  concur  in  all  decisions. 

[Clerk  anil  inurMhal.] 

The  Court  shall  also  have  a  clerk  and  a  marshal,  with  the  same 
duties  and  powers,  so  far  as  they  may  be  appropriate  and  are  not 
alt(M-cd  by  rule  of  the  Court,  as  arc  now  possessed  by  the  clerk 
and  marshal,  respoctively,  of  the  Supreme  Court  of  the  United 
States.  The  offices  of  the  clerk  and  marshal  of  the  Court  shall 
be  in  the  city  of  AVashington,  in  the  District  of  Columliia.  The 
judges  of  the  Court  shall  appoint  the  clerk  and  marshal,  and  may 
also  appoint,  if  they  find  it  necessary,  a  deputy  clerk  and  deputy 
marshal ;  and  such  clerk,  marshal,  deputy  clerk,  and  deputy  mar- 
shall  shall  hold  office  during  the  pleasure  of  the  Court.  The  sal- 
ary of  the  clei'k  shall  be  four  thousand  dollars  per  annum;  the 
salary  of  the  marshal  three  thousand  dollars  per  annum;  the  sal- 
ary of  the  deputy  clerk  two  thousand  five  hundred  dollars  per 
annum;  and  the  salary  of  the  deputy  marshal  two  thousand  five 
hundred  dollars  per  annum.  The  said  clerk  and  marshal  may, 
with  the  approval  of  the  Court,  employ  all  requisite  assistance. 

[Costs  and  fees.] 

The  costs  and  fees  in  said  Court  shall  be  established  by  the  Court 
in  a  table  thereof,  approved  by  the  Supreme  Court  of  the  United 
States,  within  four  months  after  the  organization  of  the  Court; 
but  such  costs  and  fees  shall  in  no  case  exceed  those  charged  in 
the  Supreme  Court  of  the  United  States,  and  shall  be  accounted 
for  and  paid  into  the  Treasury  of  the  United  States. 

[Regular  sessions  In  AVashincton.] 

The  Conunerce  Court  shall  always  be  open  for  the  transaction 
of  business.  Its  regular  sessions  shall  be  held  in  the  city  of  Wash- 
ington, in  the  District  of  Cohunbia ;  but  the  powers  of  the  Court 
or  of  any  judge  thereof,  or  of  the  clerk,  marshal,  deputy  clerk, 
or  deputy  marshal  may  be  exercised  anywhere  in  the  United 
States;  and  for  expedition  of  the  work  of  the  Court  and  the 
avoidance  of  undue  expense  or  inconvenience  to  suitors  the  Court 
shall  hold  sessions  in  different  parts  of  the  United  States  as 

[Expenses   of  court.] 

may  be  found  desirable.  The  actual  and  necessary  expenses  of 
judges,  clerk,  marshal,  deputy  clerk,  and  deputy  marshal  of  the 
Court  incurred  for  travel  and  attendance  elsewhere  than  in  the 
city  of  Washington  shall  be  paid  upon  the  written  and  itemized 
certificate  of  such  judge,  clerk,  marshal,  deputy  clerk,  or  deputy 
marshal  by  the  marshal  of  the  Court,  and  shall  be  allowed  to  him 
in  the  statement  of  his  accounts  with  the  United  Strifes. 

[Sessions  may  be  held  In  other  places.] 

The  United  States  marshals  of  the  several  districts  outside  of 
the  city  of  Washington  in  which  the  Commerce  Court  may  hold 
its  sessions  shall  provide,  under  the  direction  and  with  the  ap- 
proval of  the  Attorney-General  of  the  United  States,  such  rooms 
in  the  public  buiUliugs  of  the  I'nited  States  as  may  be  necessary 


634  APPENDIX. 

for  the  Court's  use;  but  in  case  proper  rooms  can  not  be  pro- 
vided in  such  public  buildings,  said  marshals,  with  the  approval 
of  the  Attorney-Ceueral  of  the  United  States,  may  then  lease 
from  time  to  time  other  necessary  rooms  for  the  Court. 

[Aiisigruinent  of  Jiidgesi.] 

If,  at  any  time,  the  business  of  the  Commerce  Court  does  not 
require  the  services  of  all  the  judges,  the  Chief  Justice  of  the 
United  States  may,  by  writing,  signed  by  him  and  tiled  in  the 
Department  of  Justice,  terminate  the  assignment  of  any  of  the 
judges  or  temporarily  assign  him  for  service  in  any  circuit  court 
or  circuit  court  of  appeals.  In  case  of  illness  or  other  disability 
of  any  judge  assigned  to  the  Commerce  Court  the  Chief  Justice 
of  the  United  States  may  assign  any  other  circuit  judge  of  the 
United  States  to  act  in  his  place,  and  may  terminate  such  assign- 
ment when  the  exigence  therefor  shall  cease;  and  any  circuit 
judge  so  assigned  to  act  in  place  of  such  judge  shall,  during  his 
assignment,  exercise  all  the  powers  and  perform  all  the  functions 
of  such  judge. 

[Other  powers  of  the  commerce  court.] 

In  all  eases  within  its  jurisdiction  the  Commerce  Court,  and 
each  of  the  judges  assigned  thereto,  shall,  respectively,  have  and 
may  exercise  any  and  all  of  the  powers  of  a  circuit  court  of  the 
United  States  and  of  the  judges  of  said  Court,  respectively,  so 
far  as  the  same  may  be  appropriate  to  the  effective  exercise  of  the 
jurisdiction  hereby  conferrecl.  The  Commerce  Court  may  issue 
all  writs  and  process  appropriate  to  the  full  exercise  of  its  juris- 
diction and  powers  and  may  prescribe  the  form  thereof.  It  may 
also,  from  time  to  time,  establish  such  rules  and  regulations,  con- 
cerning pleading,  practice,  or  procedure  in  cases  of  matters 
within  its  jurisdiction  as  to  the  court  shall  seem  wise  and  proper. 
Its  orders,  writs,  and  process  may  run,  be  served',  and  be  re- 
turnable anywhere  in  the  United  States;  and  the  marshal 
and  deputy  marshal  of  said  Court  and  also  the  United  States 
marshals  and  deputy  marshals  in  the  several  districts  of  the 
United  States  shall  have  like  powers  and  be  under  like  duties  to 
act  for  and  in  behalf  of  said  court  as  pertain  to  United  States 
marshals  and  deputy  marshals  generally  when  acting  under  like 
conditions  concerning  suits  or  matters  in  the  circuits  of  the 
United  States. 

[How  jurlsdictiou  invokeil.]. 

The  jurisdiction  of  the  Commerce  Court  shall  be  invoked  by 
filing  in  the  office  of  the  clerk  of  the  Court  a  written  petition  set- 
ting forth  briefly  and  succinctly  the  facts  constituting  the  peti- 

[Petltion.l 

tioner's  cause  of  action,  and  specifying  the  relief  sought.  A  copy 
of  such  petition  shall  be  forthwith  served  by  the  marshal  or  a  dep- 
uty marsiial  of  the  Commerce  Court  or  by  the  proper  United 
States  marshal  or  deputy  marshal  upon  every  defendant  therein 
named,  and  Avhen  the  United  States  is  a  party  defendant,  the 


THE    COMMERCE    COIRT    ACT.  635 

service  sliali  be  riiiule  In'  liliii<,r  ?i  copy  of  sjiid  petition  in  tin-  oifiee 
of  the  secretary  of  the  Interstate  C'oninierce  Conniiission  and  in 
the  Department  of  Justice.  Within  thirty  days  after  the  peti- 
tion is  served,  unless  that  time  is  extended  hy  orfh-r  of  the  court 

[.\nmv»T.] 

or  a  judge  thereof,  an  answer  to  the  petition  sliall  he  (ik'd  in  the 
clerk's  onice,  and  a  copy  thereof  maih'd  to  the  petitioner's  at- 
torney, wliich  answer  shall  briefly  and  catefrorically  respond  to 

I  ltr|tllou(loii.| 

the  alle'i.itions  of  the  petition.  Xo  rei)lication  need  be  filed  to  th.' 
answer,  nud  objections  to  the  siiffi<-iency  of  the  petition  or  answer 
as  not  settint!;  forth  a  cause  of  action  or  defense  must  be  taken 
at  the  final  heaj-ing  or  by  motion  to  dismiss  the  i)etition  based  on 
said  grounds,  which  motion  may  be  made  at  any  time  before 
answer  is  filed.  In  case  no  answer  shall  be  filed  as  provided 
herein  the  petitioner  may  apply  to  the  Court  on  notice  for  such 
relief  as  may  be  proper  upon  the  facts  alleged  in  the  petition. 

[Practice  and  procedure.] 

The  Court  may,  by  rule,  prescribe  the  method  of  taking  evidenc*.' 
in  cases  pending  in  said  court;  and  may  prescribe  that  the  evi- 
dence be  taken  before  a  single  judge  of  the  court,  with  power  to 
rule  upon  the  admission  of  evidence.  Except  as  may  be  other- 
wise provided  in  this  Act,  or  by  rule  of  the  Court,  the  practice 
aHd  procedure  in  the  Commerce  Court  shall  conform  as  nearly 
as  may  be  to  that  in  like  cases  in  a  circuit  court  of  the  United 
States'! 

[\Vheu  o|ieu  for  l>UMiiie»t!>i.l 

The  Commere  Court  shall  be  opened  for  the  transaction  of 
business  at  a  date  to  be  fixed  by  order  of  the  said  Court,  which 
shall  be  not  later  than  thirty  days  after  the  judges  thereof  shall 
have  been  designated. 

[Appeals  to  supreme  court.] 

(Sec.  2.)  That  a  iinal  judgment  or  decree  of  the  Commerce 
Court  may  be  reviewed  by  the  Supreme  Court  of  the  United 
States  if  appeal  to  the  Supreme  Court  be  taken  by  an  aggrieved 
party  within  sixty  days  after  the  entry  of  said  final  judgment  or 
decree.  Such  appeal  may  be  taken  in  like  manner  as  appeals 
from  a  circuit  court  of  the  United  States  to  the  Supreme  Court, 
and  the  Commerce  Court  may  direct  the  original  record  to  be 
transmitted  on  appeal  instead  of  a  transcript  thereof.  The  Su- 
preme Court  may  affirm,  reverse,  or  modify  the  final  judgment 
or  decree  of  the  C'onmierce  Court  as  the  case  may  require. 

[Supersedeas.] 

Appeal  to  the  Supreme  Court,  however,  shall  in  no  case  super- 
sede or  stay  the  judgment  or  decree  of  the  Commerce  Court  ap- 
pealed from,  unless  the  Supreme  Court  or  a  justice  thereof 
shall  so  direct,  and  appellant  shall  give  bond  in  such  form  and 
of  sucli  amount  as  the  Supreme  Court,  or  the  justice  of  that  court 
allowing  the  stay,  may  require. 


636  APPENDIX. 

[Appeals  from  interlocutory  orders.! 

An  appeal  may  also  be  taken  to  the  Supreme  Court  of  the 
ITnited  States  from  an  interlocutory  order  or  decree  of  the  Com- 
merce Court  granting  or  continuing  an  injunction  restraining 
the  enforcement  of  an  order  of  tlie  Interstate  Commerce  Com- 
mission, provided  such  appeal  be  taken  within  thirty  days  from 
the  entry  of  such  order  or  decree. 

[Priority  In  supreme  court.] 

Appeals  to  the  Supreme  Court  under  this  section  shall  have 
priority  in  hearing  and  determination  over  all  other  causes  ex- 
cept criminal  causes  in  that  court. 

[Suits  to  enjoin  orders  of  commission.] 

(Sec.  3.)  That  suits  to  enjoin,  set  aside,  annul,  or  suspend  any 
order  of  the  Interstate  Commerce  Commission  shall  be  brought 
in  the  Commerce  Court  against  the  United  States.  The  pendency 
of  such  suit  shall  not  of  itself  stay  or  suspend  the  operation  of 
the  order  of  the  Interstate  Commerce  Commission ;  but  the  Com- 
merce Court,  in  its  discretion,  may  restrain  or  suspend,  in  whole 
or  in  part,  the  operation  of  the  Commission's  order  pending  the 

[Xotice.] 

final  hearing  and  determination  of  the  suit.  No  order  or  injunc- 
tion so  restraining  or  suspending  an  order  of  the  Interstate  Com- 
merce Commission  shall  be  made  by  the  Commerce  Court  other- 
wise than  upon  notice  and  after  hearing,  except  that  in  cases 
where  irreparable  damage  would  otherwise  ensue  to  the  peti- 
tioner, said  Court,  or  a  judge  thereof,  may,  on  hearing,  after  not 
less  than  three  days'  notice  to  the  Interstate  Commerce  Commis- 

[Temporary  stay.] 

sion  and  the  Attorney-General,  allow  a  temporary  stay  or  sus- 
pension in  whole  or  in  part  of  the  operation  of  the  order  of  the 
Interstate  Commerce  Commission  for  not  more  than  sixty  days 
from  the  date  of  the  order  of  such  Court  or  judge,  pending  appli- 
cation to  the  Court  for  its  order  or  injunction,  in  which  case  the 
said  order  shall  contain  a  specific  finding,  based  upon  evidence 
submitted  to  the  judge  making  the  order  and  identified  by  ref- 
erence thereto,  that  such  irreparable  damage  would  result  to  the 
l)etitioner  and  specifying  the  nature  of  the  damage.  The  Court 
may,  at  the  time  of  hearing  such  application,  upon  a  like  finding, 
continue  the  temporary  stay  or  suspension  in  whole  or  in  part 
until  its  decision  upon  the  application. 

[Suit.s  to  be  brought  by  or  against  United  States.] 

(Sec.  4.)  Tliat  all  cases  and  proceedings  in  the  Commerce 
Court  which  but  for  this  Act  would  be  brought  by  or  againstthe 
Interstate  Commerce  Commission  shall  be  brought  by  or  against 
the  United  States,  and  the  United  States  may  intervene  in  any 
case  or  proceeding  in  the  Commerce  Court  whenever,  though  it 
has  not  been  made  a  party,  public  interests  are  involved. 

(Sec.  5.)   That  the  Attorney-General  shall  have  charge  and 


THE    COMMERCE   COLRT    ACT.  637 

[Attoriiej-K«?neral  to  have  control  of  Niiita.] 

control  of  the  iiitci'csls  oL"  tlu'  fJoxci'iiment  in  all  nnsos  nnrl  pro- 
ceedings in  tiie  Coniiiiercc  Court,  and  in  the  .Suprciue  Coiu't  of 
the  United  States  upon  appeal  from  the  Coininerce  Court;  and 
if  in  his  opinion  the  public  interest  re(iuires  it,  lie  may  retain 
and  emi)loy  in  the  name  of  the  United  States,  within  the  appro- 
priations from  time  to  time  made  by  the  Congress  for  such  pur- 

[Special  nttoriieyH.] 

poses,  sucli  special  attorneys  and  counselors  at  law  as  he  may 
think  necessary  to  assist  in  the  diselmrge  of  any  of  the  duties  in- 
cumbent upon  him  and  his  subordinate  attorneys;  and  the  x\t- 
torney-Ceneral  shall  stipulate  with  such  sj)ecial  attoi-neys  and 
counsel  the  amount  of  their  compensation,  which  shall  not  be  in 
excess  of  the  sums  appropriated  therefor  by  Congress  for  such 

[Commtsslon  and  others  niny  be  repreMented.] 

purposes,  and  shall  have  sui)ervision  of  their  action:  Provided, 
That  tile  Interstate  Commerce  Commission  and  any  party  or 
parties  in  interest  to  the  proceeding  before  the  Commission,  in 
which  an  order  or  requirement  is  made,  may  appear  as  parties 
thereto  of  their  own  motion  and  as  of  right,  and  be  represented 
by  their  counsel,  in  any  suit  wherein  is  involved  the  validity  of 
such  order  or  requirement  or  any  part  thereof,  and  tlie  interest 
of  such  party ;  and  the  Court  wherein  is  pending  such  suit  may 
make  all  such  rules  and  orders  as  to  such  appearances 
and  representations,  the  number  of  counsel,  and  all  matters 
of  procedure,  and  otherwise,  as  to  subserve  the  ends  of  justice 
and  speed  the  determination  of  such  suits:  rroikhd  further. 
That   communities,   associations,   corporations,    firms,   and  indi- 

[Parties  ivho  may  intervene.] 

viduals  who  are  interested  in  the  controversy  or  question  before 
the  Interstate  Commerce  Commission,  or  in  ;,iiy  suit  which  may 
be  brought  by  anyone  under  the  terms  of  this  Act.  or  the  Acts 
of  wliieli  it  is  amendatory  or  which  are  amendatory  of  it,  relat- 
ing to  action  of  the  Interstate  Commerce  Commission,  may  in- 
tervene in  said  suit  or  proceedings  at  any  time  after  the  institu- 
tion thereof,  and  the  Attorney-General  shall  not  dispose  of  or 
discontinue  said  suit  or  proceeding  over  the  objection  of  such 
party  or  intervenor  aforesaid,  but  said  iutervenor  or  intervenors 
may  prosecute,  defend,  or  continue  said  suit  or  in-oceeding  unaf- 
fected by  the  action  or  nonaction  of  the  Attorney-(ieneral  of  the 
United  States  therein. 

[Cttmiilaiiiauts  before  commission  may  intervene.] 

Complainants  before  the  Interstate  Commerce  Commi-ssion  in- 
terested in  a  case  shall  have  the  right  to  appear  and  be  made 
l)arties  to  the  case  and  be  represented  before  the  courts  by  coun- 
sel under  such  regulations  as  are  now  permitted  in  similar  cir- 
cumstances under  the  rules  and  practice  of  etiuity  courts  of  the 
United  States. 


638  APPENDIX. 

[Pending  and  other  proceedings.] 

(Sec.  6.)  That  until  the  opening  of  the  Commerce  Court  as  in 
section  one  hereof  provided,  all  cases  and  proceedings  of  which 
from  that  time  the  Commerce  Court  is  hereby  given  exclusive 
jiirisdietion  may  be  brought  in  the  same  courts  and  conducted  in 
like  manner  and  with  like  effeft  as  is  now  provided  by  law ;  and 
if  any  sncli  case  or  proceeding  shall  have  gone  to  final  judgment 
or  decree  before  the  opening  of  the  Commerce  Court,  appeal  may 
be  taken  from  such  final  judgment  or  decree  in  like  manner  and 
with  like  effect  as  is  now  provided  by  law.  Any  such  case  or 
proceeding  within  the  jurisdiction  of  the  Commerce  Court  which 
may  have  l)een  liegun  in  any  other  court  as  hereby  allowed  before 

[Tran.sferenee    of   cases   to    coninierce    court.] 

the  said  date  shall  be  forthwith  transferred  to  the  Commerce 
Court,  if  it  has  not  yet  proceeded  to  final  judgment  or  decree  in 
such  other  court  unless  it  has  been  finally  submitted  for  the  de- 
cision of  such  Court,  in  which  case  the  cause  shall  proceed  in  such 
Court  to  final  judgment  or  decree  and  further  proceeding  there- 
after, and  appeal  may  be  taken  direct  to  the  Supreme  Court,  and 
if  remanded  such  cause  may  be  sent  back  to  the  court  from  which 
the  appeal  was  taken  or  to  the  Commerce  Court  for  further  pro- 
ceeding as  the  Supreme  Court  shall  direct ;  and  all  previous  pro- 
ceedings in  such  transferred  case  shall  stand  and  operate  not- 
withstanding the  transfer,  subject  to  the  same  control  over  them 
by  the  Commerce  Court  and  to  the  same  right  of  subsequent  ac- 
tion in  the  case  or  proceeding  as  if  the  transferred  case  or  pro- 
ceeding had  been  originally  begun  in  the  Commerce  Court.  The 
clerk  of  the  Court  from  which  any  case  or  proceeding  is  so  trans- 
ferred to  the  Commerce  Court  shall  transmit  to  and  file  in  the 
Commerce  Court  the  originals  of  all  papers  filed  in  such  case  or 
proceeding  and  a  certified  transcript  of  all  record  entries  in  the 
case  or  proceeding  up  to  the  time  of  transfer. 

[Carriers  mnst  designate  agents  in  AA'a.sbington  for  pur- 
poses  of  service,] 

It  shall  be  the  duty  of  every  common  carrier  subject  to  the 
provisions  of  this  Act,  within  sixty  days  after  the  taking  effect 
of  this  Act,  to  designate  in  writing  an  agent  in  the  city  of  Wash- 
ington, District  of  Columbia,  upon  whom  service  of  all  notices 
and  processes  may  be  made  for  and  on  behalf  of  said  common 
carrier  in  any  proceeding  or  suit  pending  before  the  Interstate 
Commerce  Commission  or  before  said  Commerce  Court,  and  to 
file  such  designation  in  the  office  of  the  secretary  of  the  Interstate 
Commerce  Commission,  which  designation  may  from  time  to  time 

[Service   on   such  agents.] 

be  changed  by  like  writing  similarly  filed;  and  thereupon  service 
of  all  notices  and  processes  may  be  made  upon  such  common 
carrier  by  leaving  a  copy  thereof  with  such  designated  agent  at 
his  office  or  usual  place  of  residence  in  the  city  of  Washington, 
with  like  effect  as  if  made  personally  upon  such  common  carrier, 


THE    COMMERCE    COI  KT    ACT.  (]'^'^ 

and  in  default  of  sueli  dosij^nation  of  siu-h  ai?ent,  service  of  any 
notice  or  other  proeess  in  any  i)i'oce(Mlin<^  before  said  Interstate 
Comiiieree  Coniniission  or  Comniei'cc  Court  may  be  made  by  post- 
ing sueh  notiee  or  proeess  in  tlie  office  of  tlie  secretary  of  the  In- 
terstate Commerce  (,'oiinnission. 

[I'endln);  oiiNfN.] 

(Sec  15.)  That  nothing  in  this  Act  contained  shall  undo  or  im- 
pair any  proceedings  heretofore  taken  ])y  or  before  the  Interstate 
Commerce  Commission  or  any  of  the  Acts  of  said  Commission ; 
and  in  any  cases,  proceedings,  or  matters  now  pending  before  it. 
the  Commission  may  exei-cise  any  of  tlie  powers  hereby  conferred 
upon  it.  as  would  be  proper  in  cases,  proceedings,  or  matters  here- 
after initiated;  and  nothing  in  this  Act  contained  shall  operate 

[RxiNduK  llaltilities.l 

to  release  or  atl'ect  any  obligation,  liability,  penalty,  or  forfeiture 
heretofore  existing  against  or  incurred  by  any  person,  corpora- 
tion, or  association. 

[SlK'cinl    oomniiNHioii    to    iiivosliKate    issue    of   stocks    aud 
bonds   t-reated.] 

(Sec  l(i.)  That  the  President  is  hereby  authorized  to  appoint 
a  commission  to  investigate  (piestions  pertaining  to  the  issuance 
of  stocks  and  bonds  by  railroad  corporations,  subject  to  the  pro- 
visions of  the  Act  to  regulate  commerce,  and  the  power  of  Con- 
gress to  regulate  or  ati'cet  the  same,  and  to  fix  the  compensation 
of  the  members  of  such  commission.  Said  commission  shall  be 
i'.nd  is  hei-eby  authorized  to  employ  experts  to  aid  in  the  work  of 

[Clerks  and  employes. 1 

inquiry  and  examination,  and  such  clerks,  stenographers,  and 
other  assistants  as  may  be  necessary,  which  employees  shall  be 
paid  such  compensation  as  the  commission  may  deem  just  and 
reasonable,  upon  a  certificate  to  be  issued  by  the  chairman  of  the 
commission.  The  several  departments  and  bureaus  of  the  Gov- 
ernment shall  detail  from  time  to  time  such  officials  and  em- 
ployees and  furnish  such  information  to  the  commission  as  may 
be  directed  l)v  the  President.  For  the  ])urposes  of  its  investiga- 
tions the  counnission  shall  be  authoi'ized  to  incur  and  have  paid 

[E>.v|>eiiHes.l 

upon  the  certificate  of  its  chairman  such  expenses  as  the  commis- 
sion shall  deem  necessary:  Provided,  however.  That  the  total  ex- 
j lenses  authorized  oi-  incurred  under  the  provisions  of  this  section 
for  compensation.  einjiJoyees.  or  otiierwise.  shall  not  exceed  the 
sum  of  twenty-live  thousand  dollars. 

[Iiiterl«»ciitory     iiijiiiietion.s     restrainliiR-     eiiforeenient     of 
state  statutes   limited.  I 

(Sec  17.)  That  no  interlocutory  injunrtion  suspending  or 
restraining  the  enforcement,  operation,  or  execution  of  any  stat- 
ute of  a  State  by  restraining  the  action  of  any  officer  of  sueh 
State  in  the  enforcement  or  execution  of  such  statute  shall  be 
issued  or  granted  by  any  justice  of  the  supreme  court,  or  by  any 


640  APPENDIX. 

circmt  court  of  the  United  States,  or  by  any  judge  thereof,  or  by 
any  district  judge  acting  as  circuit  judge,  upon  the  ground  of 
the  unconstitutionality  of  such  statute,  unless  the  application  for 
the  same  shall  be  presented  to  a  justice  of  the  Supreme  Court  of 
the  United  States,  or  to  a  circuit  judge,  or  to  a  district  judge 
acting  as  circuit  judge,  and  shall  be  heard  and  determined  by 
three  judges,  of  whom  at  least  one  shall  be  a  justice  of  the  Su- 
preme Court  of  the  [Fnited  States  or  a  circuit  judge,  and  the 
other  two  may  be  either  circuit  or  district  judges,  and  unless  a 
majority  of  said  three  judges  shall  concur  in  granting  such  ap- 
plication. Whenever  such  application  as  aforesaid  is  presented 
to  a  justice  of  the  Supreme  Court  of  the  United  States,  or  to  a 
judge,  he  shall  immediately  call  to  his  assistance  to  hear  and  de- 
termine the  application  two  other  judges :  Provided,  however, 
That  one  of  such  three  judges  shall  be  a  justice  of  the  Supreme 
Court  of  the  United  States  or  a  circuit  judge.    Said  application 

[jVotice.] 

shall  not  be  heard  or  determined  before  at  least  five  days'  notice 
of  the  hearing  has  been  given  to  the  governor  and  to  the  attorney- 
genernl  of  the  State,  and  to  such  other  persons  as  may  be  defend- 
ants in  the  suit:  Provided,  That  if  of  opinion  that  irreparable 
loss  or  damage  would  result  to  the  complainant  unless  a  tempo- 
ary  restraining  order  is  granted,  any  justice  of  the  Supreme 
Court  of  the  United  States,  or  any  circuit  or  district  judge,  may 
grant  such  temporary  restraining  order  at  any  time  before  such 
hearing  and  determinat]on  of  the  application  for  an  interlocutory 
injunction,  but  such  temporary  restraining  order  shall  only  re- 
main in  force  until  the  hearing  and  determination  of  the  appli- 

[Expedition.] 

cation  for  an  interlocutory  injunction  upon  notice  as  aforesaid. 
The  hearing  upon  such  application  for  an  interlocutory  injunc- 
tion shall  be  given  precedence  and  shall  be  in  every  way  expedited 
and  be  assigned  for  a  hearing  at  the  earliest  practicable  day  after 

[Appeals.] 

the  expiration  of  the  notice  hereinbefore  provided  for.  An  ap- 
peal may  be  taken  directly  to  the  Supreme  Court  of  the  United 
States  from  the  order  granting  or  denying,  after  notice  and  hear- 
ing, an  interlocutory  injunction  in  such  case. 


THE  NATIONAL  TRADE  UNION  INCORPORATION  ACT. 

The  National  Trade  Union  Incorporation  Act. — The  Act  of 
June  2!),  issii.  Iconlizcs  tlic  iiu-orixji-aticni  oL'  Xational  Trades 
I'nions,  :?  ('miipilcd  Statutes  .'{20-1-: 

"National  Trade  Unions"  defined. — Be  it  enacted,  etc.:  Sec. 
].  That  the  term  "National  Trade  Union,"  in  the  meaning  of 
this  act,  shall  sitrnify  an  association  of  working  people  having 
two  or  more  branches  in  the  States  or  Territories  of  the  United 
States  for  the  jiurpose  of  aiding  its  members  to  become  more 
skillfnl  and  efficient  workers,  the  promotion  of  their  general  in- 
telligence, the  elevation  of  their  character,  the  regulation  of  their 
wages  and  their  hours  and  conditions  of  labor,  the  protection  of 
their  individual  rights  in  the  prosecution  of  their  trade  or  trades, 
the  raising  of  funds  for  the  benefit  of  sick,  disabled,  or  unem- 
ployed members,  or  the  families  of  deceased  members,  or  for  such 
other  object  or  objects  for  which  working  people  may  lawfully 
eoml)ino.  having  in  view  their  mutual  protection  or  benefit. 

Incorporation. — Sec.  2.  That  National  Trade  Unions  shall 
upon  liliug  tlieir  articles  of  incorporation  in  the  office  of  the 
recorder  of  the  District  of  Columbia,  become  a  corporation  under 
the  technical  name  by  which  said  National  Trade  Union  desires 
to  be  known  to  the  trade;  and  shall  have  the  right  to  sue  and  be 
sued,  to  implead  and  bo  impleaded,  to  grant  and  receive,  in  its 
corporate  or  technical  name,  property,  real,  personal,  and  mixed, 
and  to  use  said  property  and  the  proceeds  and  income  thereof, 
for  the  objects  of  said  corporation  as  in  its  charter  defined :  Pro- 
vided, That  each  Union  shall  hold  only  so  much  real  estate  as  may 
be  re(|uirod  for  tlie  immediate  purposes  of  its  corporation. 

Constitution,  rules,  and  by-laws.— Sec.  3.  That  an  incorpo- 
rated National  Trade  l^nion  shall  have  power  to  make  and  estab- 
lish such  constitution,  rules,  and  by-laws  as  it  may  deem  proper 
to  carry  out  its  lawful  objects,  and  the  same  to  alter,  amend,  add 
to.  or  repeal  at  ]ileasure. 

Duties  of  officers. — Sec.  4.  That  an  incori)orated  National 
Trade  Inion  shall  have  power  to  define  the  duties  and  powers  of 
all  its  officers,  and  prescribe  their  mode  of  election  and  term  of 
office,  to  establish  branches  and  sub-unions  in  any  territory  of 
the  United  States. 

Headquarters.— Sec.  5.  That  the  headquarters  of  an  incor- 
porated National  Trade  Union  shall  be  located  in  the  District  of 
Columbia.     See  supra,  §  67. 

[641] 

41 


NATIONAL  ARBITRATION  ACT. 

AN   ACT    Concerning   carriers   engaged    in   interstate    commerce   and 

their  employees. 

Be  it  enacted  by  the  Senate  and  House  of  Representatives  of 
the  United  States  of  America  in  Congress  assembled,  That  the 
provisions  of  this  Act  shall  apply  to  any  common  carrier  or  car- 

[Adjustment     of     controversies     between     railroads     and 

their  employes.] 
[Scope  of  act.] 

riers  and  their  officers,  agents,  and  employees,  except  masters  of 
vessels  and  seamen,  as  defined  in  section  forty-six  hundred  and 
twelve,  Revised  Statutes  of  the  United  States,  engaged  in  the 
transportation  of  passengers  or  property  wholly  by  railroad,  or 
partly  by  railroad  and  partly  by  water,  for  a  continuous  carriage 
or  shiprnent,  from  one  State  or  Territory  of  the  United  States, 
or  the  District  of  Columbia,  to  any  other  State  or  Territory  of 
the  United  States,  or  the  District  of  Columbia,  or  from  any  place 
in  the  United  States  to  an  adjacent  foreign  country,  or  from  any 
place  in  the  United  States  through  a  foreign  country  to  any  other 
place  in  the  United  States. 

[Terms.] 

The  term  "railroad"  as  used  in  this  Act  shall  include  all 
bridges  and  ferries  used  or  operated  in  connection  with  any 

[ — "railroads."] 

railroad,  and  also  all  the  road  in  use  by  any  corporation  operat- 
ing a  railroad,  whether  owned  or  operated  under  a  contract, 

[ — "transportation."] 

agreement,  or  lease  ;  and  the  term  "transportation"  shall  include 
all  instrumentalities  of  shipment  or  carriage. 

[—"employees."] 

The  term  "employees"  as  used  in  this  Act  shall  include  all 
persons  actually  engaged  in  any  capacity  in  train  operation  or 
train  service  of  any  description,  and  notwithstanding  that  the 
cars  upon  or  in  which  they  are  employed  may  be  held  and  oper- 
ated by  the  carrier  under  lease  or  other  contract.  Provided,  hoiv- 

[Street  railroads  excepted.] 

ever,  That  this  Act  shall  not  be  held  to  apply  to  employees  of 
street  railroads  and  shall  apply  only  to  employees  engaged  in 
railroad  train  service.  In  every  such  case  the  carrier  shall  be 
responsible  for  the  acts  and  defaults  of  such  employees  in  the 
same  manner  and  to  the  same  extent  as  if  said  cars  were  owned 
by  it  and  said  employees  directly  employed  by  it,  and  any  pro- 
visions to  the  contrary  of  any  such  lease  or  other  contract  shall 

[642] 


NATIONAL  ARBITRATION   ACT.  648 

rRoN|ioiiNlltlli(y  of  carrier  on  IcnNOd  cam.l 

be  bindinj}:  only  as  bolween  the  parlies  thereto  and  sliall  not  af- 
fect the  oblio:ations  of  said  carrier  eitlier  to  the  public  or  to  tin- 
private  parties  concerned. 

Sec.  2,  That  wlienever  a  controversy  concerning  wages,  hours 
of  labor,  or  conditions  of  employment  shall  arise  between  a  car- 

[Chiiiniinn     of     IntcrN<nto     Coniiiicroc     Comml.sNion     and 
<*oinnilNsIoner  of  lalior  to  niriliute  diiTercnecH.] 

Her  subject  to  this  Act  and  the  employees  of  such  carrier,  seri- 
ously interrupting-  or  threatening  to  interrupt  the  business  of 
said  carrier,  the  chairman  of  the  Interstate  Commerce  Commis- 
sion and  the  Commissioner  of  Labor  shall,  upon  the  request  of 
either  party  to  the  controversy,  with  all  practicable  expedition, 
put  themselves  in  communication  with  the  parties  to  such  contro- 
versy, and  shall  use  their  best  efforts,  by  mediation  and  concilia- 
tion, to  amicably  settle  the  same;  and  if  such  efforts  shall  be  un- 
successful, shall  at  once  endeavor  to  bring  about  an  arbitration 
of  said  controversy  in  accordance  with  the  provisions  of  this  Act 

[I'^nilnrc  to  ndjiist.) 

Sec.  3.  That  whenever  a  controversy  shall  arise  between  a  car- 
rier subject  to  this  Act  and  the  emploj^ees  of  such  carrier  which 
can  not  be  settled  by  mediation  and  conciliation  in  the  manner 
provided  in  the  preceding  section,  said  controversy  may  be  sub- 
mitted to  the  arbitration  of  a  board  of  three  persons,  who  shall 

[Board  to  arbitrate.     How  .selooted.] 

be  chosen  in  the  manner  following:  One  shall  be  named  by  the 
carrier  or  employer  directly  interested ;  the  other  shall  be  named 
by  the  labor  organization  to  which  the  employees  directly  inter- 
ested belong,  or,  if  they  belong  to  more  than  one,  by  that  one  of 
them  which  specially  represents  employees  of  the  same  grade 
and  class  and  engaged  in  services  of  the  same  nature  as  said  em- 
ployees so  directly  interested:  Provided,  however.  That  when  a 

[Controversies  aflfectiufc  different  lal>or  orKanlzations.l 

controversy  involves  and  aiTects  the  interests  of  two  or  more 
classes  and  grades  of  employees  belonging  to  different  labor  or- 
ganizations, such  arbitrator  shall  be  agreed  upon  and  designated 
by  the  concurrent  action  of  all  such  labor  organizations;  and 
in  cases  where  the  majority  of  such  employees  are  not  members 
of  any  labor  organization,  said  employees  may  by  a  majority  vote 
select  a  committee  of  their  own  number,  which  committee  shall 

[Tliird  nrliitrator.] 

have  the  right  to  seleet  the  arbitrator  on  behalf  of  said  employees. 
The  two  thus  chosen  shall  select  the  third  Commissioner  of  arbi- 
tration ;  but.  in  the  event  of  their  failure  to  name  such  arbitrator 
within  tive  days  after  their  first  meeting,  the  third  arbitrator 
shall  be  named  by  the  Commissioners  named  in  the  preceding 
section.  A  majority  of  said  arbitrators  shall  be  competent  to 
make  a  valid  and  binding  award  under  the  provisions  hereof. 


644  APPENDIX. 

[Form  of  submission.] 

The  submission  shall  be  in  writing,  shall  be  signed  by  the  em- 
ployer and  by  tlie  labor  organization  representing  the  employees, 
shall  specify  the  time  and  place  of  meeting  of  said  board  of  arbi- 
tration, shall  state  the  questions  to  be  decided,  and  shall  contain 
appropriate  provisions  by  which  the  respective  parties  shall  stip- 
ulate, as  follows: 

[Stipulations  of  submission.] 
[Time  of  hearings.] 

First.  That  the  board  of  arbitration  shall  commence  their 
hearings  within  ten  days  from  the  date  of  the  appointment  of 
the  third  arbitrator,  and  shall  find  and  file  their  award,  as  pro- 
vided in  this  section,  within  thirty  days  from  the  date  of  the  ap- 

[Status   of  controver.sj'  peudiug'  arbitration.] 

l)ointment  of  the  third  arbitrator ;  and  that  pending  the  arbitra- 
tion the  status  existing  immediately  prior  to  the  dispute  shall 

[Involuntary  serA-ice.] 

not  be  changed:  Provided,  That  no  employee  shall  be  compelled 
tg  render  personal  service  without  his  consent. 

[Filing-  of  a-ward  in  the  United  States  eircuit  eourt.] 

Second.  That  the  award  and  the  papers  and  proceedings,  in- 
cluding the  testimony  relating  thereto  certified  under  the  hands 
of  the  arbitrators  and  which  shall  have  the  force  and  effect  of  a 
bill  of  exceptions,  shall  be  filed  in  the  clerk 's  office  of  the  circuit 
court  of  the  United  States  for  the  district  wherein  the  contro- 
versy arises  or  the  arbitration  is  entered  into  and  shall  be  final 
and  conclusive  upon  both  parties,  unless  set  aside  for  error  of 
law  apparent  on  the  j-ecord. 

[Enforcing  award.] 

Third.  That  the  respective  parties  to  the  award  will  each  faith- 
fully execute  the  same,  and  that  the  same  may  be  specifically  en- 
forced in  equity  so  far  as  the  powers  of  a  court  of  equity  permit : 

[Involuntary  service.] 

Provided,  That  no  injunction  or  other  legal  process  shall  be  issued 
which  shall  compel  the  performance  by  any  laborer  against  his 
will  of  a  contract  for  personal  labor  or  service. 

[Xotice   of  termination   of  service.] 

Fourth.  That  employees  dissatisfied  with  the  award  shall  not 
by  reason  of  such  dissatisfaction  quit  the  service  of  the  employer 
before  the  expiration  of  three  months  from  and  after  the  making 
of  such  award  without  giving  thirty  days'  notice  in  writing  of 
their  intention  so  to  quit.  Nor  shall  the  employer  dissatisfied 
with  such  award  dismiss  any  employee  or  employees  on  account 
of  such  dissatisfaction  before  the  expiration  of  three  months  from 
and  after  the  making  of  such  award  without  giving  thirty  days' 
notice  in  writing  of  his  intention  so  to  discharge. 

[Continuance  in  force  of  a>vard.] 

Fifth.  That  said  award  shall  continue  in  force  as  between  the 
parties  thereto  for  the  period  of  one  year  after  the  same  shall  go 


NATIONAL   AKHI'IKATION    ACT.  •>-!•■"> 

into  pra('ti(;iil  opofatiou,  and  no  new  arhil  ration  upon  the  same 
subject  between  tlie  same  employer  and  the  same  cbiss  of  em- 
ployees shall  be  had  until  the  expiration  of  said  one  year  if  the 
award  is  not  set  aside  as  provided  in  section  four.     That  as  to 

[InilivUIiinl  emiiloyees  not  pnrticH  not  Itoiinil  liy  a^vard.] 

individual  employees  not  belonuiuj?  to  the  labor  organization  or 
organi/ations  wliieh  sliall  enter  into  the  arbitration,  the  said  ar- 
bitration and  the  award  made  therein  shall  not  be  l)indin!?,  unles"? 
the  said  individual  employees  shall  give  assent  in  writing  to  be- 
come parties  to  said  arbitration. 

[Elxceptious  to  a^vard.] 

Sec.  4.  That  the  award  being  filed  in  the  clerk's  office  of  a  cir- 
cuit court  of  the  United  States,  as  lierein])efore  provided,  shall 
go  into  practical  operation,  and  judgment  shall  be  entered 
thereon  accordingly  at  the  expiration  of  ten  days  from  such  fil 
ing,  unless  within  such  ten  days  either  party  shall  file  exceptions 
thereto  for  matter  of  law  apparent  upon  the  i-eeord,  in  which 
case  said  award  shall  go  into  practical  operation  and  judgment 
be  entered  accordingly  when  such  exceptions  shall  have  been  fin- 
ally disposed  of  either  by  said  circuit  court  or  on  appeal  there- 
from. 

[Appeal  to  circuit  court  of  appeals.] 

At  the  expiration  of  ten  daj^s  from  the  decision  of  the  circuit 
court  upon  exceptions  taken  to  said  award,  as  aforesaid,  judg- 
ment sliall  be  entered  in  accordance  with  snid  decision  unless  dur- 
ing said  ten  days  either  party  shall  appeal  therefrom  to  the  cir- 
cuit court  of  appeals.     In  such  case  only  such  portion  of  the 

[Record.] 

record  shall  be  transmitted  to  the  appellate  court  as  is  necessary 
to  the  proper  understanding  and  consideration  of  the  questions 
of  law  presented  by  said  exceptions  and  to  be  decided. 

[Judsnieut.J 

The  determination  of  said  circuit  court  court  of  appeals  upon 
said  questions  shall  be  final,  and  being  certified  by  the  clerk 
thereof  to  said  circuit  court,  judgment  pursuant  thereto  shall 
thereupon  be  entered  by  said  circuit  court. 

If  exceptions  to  an  award  are  finally  sustained,  judgment  shall 
be  entered  setting  aside  the  award.    lUit  in  such  case  the  parties 

[Judgment   by  aRreeuient.] 

may  agree  upon  a  judgment  to  be  entered  disposing  of  the  sub- 
ject-matter of  the  controversy,  which  judgment  when  entered 
shall  have  the  same  force  and  effect  as  judgment  entered  upon 
an  award. 

[I*o>ver.s    oC   nrhilratioii.l 

Sec.  5.  That  for  the  purposes  of  this  Act  the  arlntrators  herein 
provided  for,  or  either  of  them,  shall  have  power  to  administer 
oaths  and  affirmations,  sign  subp  enas,  require  the  attendance 
and  testimony  of  witnesses,  and  the  production  of  such  books, 


C)4:6  APPENDIX. 

l)apers,  contracts,  agreements,  and  documents  material  to  a  just 
determination  of  the  matters:  under  invcstig'ntion  as  may  be 
ordered  by  the  court ;  and  may  invoke  the  aid  of  the  United  States 
courts  to  compel  witnesses  to  attend  and  testify  and  to  produce 
such  books,  papers,  contracts,  agreements  and  documents  to  the 
same  extent  and  under  the  same  conditions  and  penalties  as  is 
provided  for  in  the  Act  to  regulate  commerce,  approved  February 
fourth,  eighteen  hundred  and  eighty-seven,  and  tlie  amendments 
thereto. 

[Agreement  to  arbitrate.] 

Sec.  6.  That  every  agreement  of  arbitration  under  this  Act 
shall  be  acknowledged  by  the  parties  before  a  notary  public  or 
clerk  of  a  district  or  circuit  court  of  the  United  States,  and  when 
so  acknowledged  a  copy  of  the  same  shall  be  transmitted  to  the 

[Filinff    of    agreemeut   iu    office    of    Interstate    Commerce 
Commission.] 

chairman  of  the  Interstate  Commerce  Commission,  who  shall  file 
the  same  in  the  office  of  said  Commission. 

[Agreement  of  individual    employees  to  arbitrate.] 

Any  agreement  of  arbitration  which  shall  be  entered  into  con- 
forming to  this  Act,  except  that  it  shall  be  executed  by  employees 
individually  instead  of  by  a  labor  organization  as  their  repre- 
sentative, shall,  when  duly  acknowledged  as  herein  provided,  be 
transmitted  to  the  chairman  of  the  Interstate  Commerce  Commis- 
sion, who  shall  cause  a  notice  in  writing  to  be  served  upon  the 

[Meeting  to  be  called.] 

arbitrators,  fixing  a  time  and  place  for  a  meeting  of  said  board, 
which  shall  be  -^athin  fifteen  days  from  the  execution  of  said 
agreement  of  arbitration :  Provided,  Jioivever,  That  the  said  chair- 
man of  the  Interstate  Commerce  Commission  shall  decline  to  call 

[Condition.] 

a  meeting  of  arbitrators  under  such  agreement  unless  it  be  shown 
to  his  satisfaction  that  the  employees  signing  the  submission  rep- 
resent or  include  a  majority  of  all  employees  in  the  service  of  the 
same  employer  and  of  the  same  grade  and  class,  and  that  an 
award  pursuant  to  said  submission  can  justly  be  regarded  as 
binding  upon  all  such  employees. 

[Restrictions  on  parties  during  pendency  of  arbitration.] 

Sec.  7.  That  during  the  pendency  of  arbitration  under  this  Act 
it  shall  not  be  law^ful  for  the  employer,  party  to  such  arbitration, 
to  discharge  the  employees,  parties  thereto,  except  for  inefficiency, 
violation  of  law,  or  neglect  of  duty;  nor  for  the  organization  rep- 
resenting such  employees  to  order,  nor  for  the  employees  to  unite 
in,  aid,  or  abet,  strikes  against  said  employer;  nor,  during  a 

[After  award.] 

period  of  three  months  after  an  aAvard  under  such  an  arbitration, 
for  such  employer  to  discharge  any  such  employees,  except  for 
the  causes  aforesaid,  without  giving  thirty  days'  written  notice  of 
an  intent  so  to  discharge ;  nor  for  any  of  such  employees,  during 


NATIONAL  ARBITRATION  ACT.  647 

a  like  period,  to  quit  the  service  of  said  employer  without  just 
cause,  without  giving  to  said  employer  thirty  days'  written  notice 
of  an  intent  so  to  do;  nor  for  such  organization  representing 
such  employees  to  order,  counsel,  or  advise  otherwise.    Any  viola- 

[I'ennlty.] 

tion  of  this  section  shall  suhjcct  the  offending  party  to  liability 
for  damages:  Provided,  That  nothifig  herein  obtained  shall  be 

[Itediiction    n(   foroA    for   hiiNinoxM   rofiHonH.l 

construed  to  prevent  any  employer,  party  to  such  arbitration, 
from  reducing  the  number  of  its  or  his  employees  whenever  in 
its  or  his  judgment  business  necessities  require  such  reduction. 

[Natioual   trade  unions.] 

Sec.  8.  That  in  every  incorporation  under  the  provisions  of 
chapter  five  hundred  and  sixty-seven  of  the  United  States  Stat- 
utes of  eighteen  hundred  and  eighty-five  and  eighteen  hundred 

[Forfeiture  of  nieniltership  for  violence.! 

and  eighty-six  it  must  be  provided  in  the  article  of  incorporation 
and  in  the  constitution,  rules~  and  by-laws  that  a  member  shall 
cease  to  be  such  by  participating  in  or  by  instigating  force  or  vio- 
lence, against  persons  or  property  during  strikes,  lockouts,  or 
boycotts,  or  by  seeking  to  prevent  others  from  working  through 
violence,  threats  or  intimidations.     Members  of  such  incorpora- 

[Liabilities.l 

tions  shall  not  be  personally  liable  for  the  acts,  debts,  or  obliga- 
tions of  the  corjiorations.  nor  shall  such  corporations  be  liable  for 

[Appearance  of  corporations  in  arbitration  proceedinjErs.l 

the  acts  of  members  or  others  in  violation  of  law:  and  such  cor- 
fiorations  may  appear  by  designated  representatives  before  the 
board  created  by  this  Act,  or  in  nay  suits  or  proceedings  for  or 
against  such  corporations  or  their  menibers  in  any  of  the  federal 
courts. 

[Railroads    in    liands    of    federal    receiver.      I<:mployees  to 
be   heard.] 

Sec.  0.  That  whenever  receivers  appointed  by  federal  courts 
are  in  the  possession  and  control  of  railroads,  the  employees  upon 
such  railroads  shall  have  the  right  to  be  heard  in  such  courts  upon 
all  questions  affecting  the  terms  and  conditions  of  their  employ- 
ment, thi'ough  the  officers  and  representatives  of  their  associa- 
tions, whether  incorporated  or  unincorporated,  and  no  reduction 
of  wages  shall  be  made  by  such  receivers  without  the  authority 
of  the  court  therefor  ujion  notice  to  such  employees,  said  notice  to 

[Xotlce   of  reduction   of  wages.] 

be  not  les-s  than  twenty  days  before  the  hearing  upon  the  receiv- 
ers' petition  or  application,  and  to  be  posted  upon  all  customary 
bulletin  boards  along  or  upon  the  railway  operated  by  such  re- 
ceiver or  receivers. 

[Rrohibitiou    of    unjust    requirements    as    conditions    to 
employment.] 

Sec.  10.  That  any  employer  subject  to  the  provisions  of  this 
Act  and  aiiv  officer,  agent,  or  receiver  of  such  employer  who  shall 


648  APPENDIX. 

require  any  employee,  or  any  person  seeking  employment,  as  a 
condition  of  such  employment,  to  enter  into  an  agreement,  either 
written  or  verbal,  not  to  become  or  remain  a  member  of  any  labor 
corporation,  association,  or  organization  -,  or  shall  threaten  any 
employee  witli  loss  of  employment,  or  shall  unjustly  discriminate 
against  any  employee  because  of  his  membership  in  such  a  labor 
corporation,  association,  or  organization ;  or  who  shall  require 
any  employee  or  any  person  seeking  employment,  as  a  condition 
of  such  employment,  to  enter  into  a  contract  whereby  such  em- 
ployee or  applicant  for  employment  shall  agree  to  contribute  to 

[Attempts     to    prevent     further    employment    after    dis- 
oharge.] 

any  fund  for  charitable,  social,  or  beneficial  purposes;  to  release 
such  employer  from  legal  liability  for  any  personal  injury  by 
reason  of  any  benefit  received  from  such  fund  beyond  the  propor- 
tion of  the  benefit  arising  from  the  employer's  contribution  to 
such  fund;  or  who  shall,  after  having  discharged  an  employed, 
attempt  or  conspire  to  prevent  such  employee  from  obtaining  em- 
ployment, or  who  shall,  after  the  quitting  of  an  employee,  at- 
tempt or  conspire  to  jTcvent  such  employee  from  obtaining  em- 
ployment, is  hereby  declared  to  be  guilty  of  a  misdemeanor,  and 

IPenalty.] 

upon  conviction  thereof  in  any  court  of  the  United  States  of  com- 
petent jurisdiction  in  the  district  in  which  such  offense  was  com- 
mitted, shall  be  punished  for  each  offense  by  a  fine  of  not  less 
than  one  hundred  dollars  and  not  more  than  one  thousand  dol- 
lars. 

[Appropriation   for   expenses   of   arbitration.] 

Sec.  11.  That  each  member  of  said  board  of  arbitration  shall 
receive  a  compensation  of  ten  dollars  per  day  for  the  time  he  is 
actually  employed,  and  his  traveling  and  other  necessary  ex- 
penses ;  and  a  sum  of  money  sufficient  to  pay  the  same,  together 
with  the  traveling  and  other  necessary  and  proper  expenses  of 
any  conciliation  or  arbitration  had  hereunder,  not  to  exceed  ten 
thousand  dollars  in  any  one  year,  to  be  approved  by  the  chair- 
man of  the  Interstate  Commerce  Commission  and  audited  by  the 
proper  accounting  officers  of  the  Treasury,  is  hereby  appropriated 
for  the  fiscal  years  ending  June  thirtieth,  eighteen  hundred  and 
ninety-eight,  and  June  thirtieth,  eighteen  hundred^  and  ninety- 
nine,  out  of  any  money  in  the  Treasury  not  otherwise  appropri- 
ated. 

[Repeal.] 

Sec.  12.  That  the  Act  to  create  boards  of  arbitration  or  com- 
mission for  settling  controversies  and  differences  between  rail- 
road corporations  and  other  common  carriers  engaged  in  inter- 
state or  territorial  transportation  of  property  or  persons  and 
their  employees,  approved  October  first,  eighteen  hundred  and 
eighty-eight,  is  hereby  repealed. 

Public,  No.  115,  approved  June  1,  1898. 


INTERLOCKING  ACT. 

AN  ACT  To  grant  the  right  of  way  through  the  Oklahoma  Territory 
and  the  Indian  Territory  to  the  Enid  and  Anadarko  Railway  Com- 
pany, and  for  other  purposes. 

Sec,  18.  That  when  in  any  case  two  or  more  railroads  crossing 
oaeh  other  at  a  common  grade  shall,  by  a  S3'stem  of  interlocking 
01'  automatic  sisnals,  or  by  any  works  or  fixtures  to  be  erected  by 
tliem,  render  it  safe  for  engines  and  trains  to  pass  over  such  cross- 
ing without  stopping,  and  such  interlocking  or  automatic  .signals 

[Approval    by   coiiiiniNNioii    of    iiiterlocklDg   or    automatic 
HlKiialN   at   vrONMiiin^.s. I 

or  worlvs  or  iixturcs  sliall  be  approved  by  the  Interstate  Com- 
merce Commissioners,  then,  in  that  case,  it  is  hereby  made  lawful 
for  the  engines  and  trains  of  such  railroad  or  railroads  to  pass 
over  sucli  crossing  without  stopping,  any  law^  or  the  provisions  of 
any  law  to  the  contrary'-  notwithstanding;  and  when  two  or  more 
railroads  cross  each  other  at  a  common  grade,  either  of  such  roads 
may  apply  to  the  Interstate  Commerce  Commissioners  for  per- 
mission to  introduce  upon  both  of  said  railroads  some  system  of 
interlocking  or  automatic  signals  or  works  or  fixtures  rendering 
it  safe  for  engines  and  trains  to  pass  over  such  crossings  without 

[Common    grade   crossing.] 

stopping,  and  it  shall  be  the  duty  of  said  Interstate  Commerce 
Commissioners,  if  the  system  of  works  and  fixtures  which  it  is 
proposed  to  erect  by  said  company,  are,  in  the  opinion  of  the 
Commission,  sufficient  and  pro]ier,  to  grant  such  permission, 

[Xotice  of  intent  to  use  signals  at  rroMsings,1 

Sec,  19,  That  any  railroad  company  which  has  obtained  per- 
mission to  introdur-e  a  system  of  interlocking  or  automatic  sig- 
nals at  its  crossing  at  a  conunon  grade  with  any  other  railroad. 

[Division   of  cost,] 

as  provided  in  the  last  section,  may,  after  thirty  days'  notice,  in 
writing,  to  such  other  railroad  company,  introduce  and  erect  such 
interlocking  or  autoimitic  signal  or  fixtures;  and  if  such  railroad 
company,  after  such  notification,  refuse  to  join  with  the  rail- 
road company  giving  notice  in  the  construction  of  such  works 
or  fixtures,  it  shall  be  lawful  for  said  company  to  enter  upon  the 
right  of  way  and  tracks  of  such  second  coiin)auy.  in  such  manner 
as  to  not  unnecessarily  impede  the  operation  of  such  road,  and 
erect  such  works  and  fixtures,  and  may  recover  in  any  action  at 
law  from  such  second  company  one-half  of  the  total  cost  of  erect- 
ing and  maintaining  such  interlocking  or  automatic  signals  or 

works  or  fixtures  on  both  of  said  roads. 

*  #  *  *  • 

Public,  No.  26.  approved  February  28.  1902. 

[0491 


ASH  PAN  ACT. 
AN  ACT  To  promote  the  safety  of  employees  on  railroads. 

Be  it  enacted  hy  the  Senate  and  House  of  Representatives  of 
ths  United  States  of  America  in  Congress  assembled,  That  on  and 

[Ash-pan  equipment  in  interstate  commerce.] 

after  the  first  day  of  January,  nineteen  hundred  and  ten,  it  shall 
be  unlawful  for  any  common  carrier  engaged  in  interstate  or  for- 
eign commerce  by  railroad  to  use  any  locomotive  in  moving  inter- . 
state  or  foreign  traffic,  not  equipped  Avith  an  ash  pan.  which  can 
be  dumped  or  emptied  and  cleaned  without  the  necessity  of.  any 
employee  going  under  such  locomotive. 

[Ash-pan  equipment  in    territories    and    district    of    Co- 
lumbia.] 

Sec.  2.  That  on  and  after  the  first  day  of  January,  nineteen 
hundred  and  ten,  it  shall  be  unlawful  for  any  common  carrier  by 
railroad  in  any  Territory  of  the  United  States  or  the  District  of 
Columbia  to  use  any  locomotive  not  equipped  with  an  ash  pan 
which  can  be  dumped  or  emptied  and  cleaned  without  the  neces- 
sity of  any  employee  going  under  such  locomotive. 

[Penalties.] 

Sec.  3.  That  any  such  common  carrier  using  any  locomotive  in 
violation  of  any  of  the  provisions  of  this  Act  shall  be  liable  to  a 
penalty  of  two  hundred  dollars  for  each  and  every  such  violation, 
to  be  recovered  in  a  suit  or  suits  to  be  brought  by  the  United 
States  district  attorney  in  the  district  court  of  the  United  States 
having  jurisdiction  in  the  locality  where  such  violation  ^hall  have 

[Enforcement.] 

been  committed ;  and  it  shall  be  the  duty  of  such  district  attorney 
to  bring  such  suits  upon  duly  verified  information  being  lodged 

[Commission  to  lodge  information.] 

with  him  of  such  violation  having  occurred;  and  it  shall  also  be 
the  duty  of  the  Interstate  Commerce  Commission  to  lodge  with 
the  proper  district  attorneys  information  of  any  such  violations 
as  may  come  to  its  knowledge. 

[Powers  granted  to  commission.] 

Sec.  4.  That  it  shall  be  the  duty  of  the  Interstate  Commerce 
Commission  to  enforce  the  provisions  of  this  Act,  and  all  powers 
heretofore  granted  to  said  Commissions  are  hereby  extended  to 
it  for  the  purpose  of  the  enforcement  of  this  Act. 

[Receivers    included.] 

Sec.  5.  That  the  term  ''common  carrier"  as  used  in  this  Act 
shall  include  the  receiver  or  receivers  or  other  persons  or  cor- 
porations charged  with  the  duty  of  the  management  and  opera- 
tion of  the  business  of  a  common  carrier. 

[When  ash-pan  Is  not  necessary.] 

Sec.  6.  That  nothing  in  this  Act  contained  shall  apply  to  any 
locomotive  upon  which,  by  reason  of  the  use  of  oil,  electricity,  or 
other  such  agency,  an  ash  pan  is  not  necessary. 

Public,  No.  165,  approved  May  30,  1908. 

[650] 


REPORTS  OF  ACCIDENTS  ACT. 

AN  ACT  Requiring  common  carriers  engaged  in  interstate  and  foreign 
commerce  to  make  full  reports  of  all  accidents  to  the  Interstate  Com- 
merce Commission,  and  autliorizing  investigations  thereof  by  said 
Commission. 

Jie  it  enacted  by  the  Senate  and  Ilouse  of  Eepresentatives  of 
the  United  States  of  America  in  Congress  assembled,  That  it 

[3IouthIr  reports   of  railway   accidents.] 

shall  be  the  duty  of  the  general  manager,  superintendent,  or 
other  proper  officer  of  every  common  carrier  engaged  in  interstate 
or  foreign  commerce  by  railroad  to  make  to  the  Interstate  Com- 
merce Commission,  at  its  office  in  Washington,  District  of  Colum- 
bia, a  monthly  report,  under  oath,  of  all  collisions,  derailments, 
or  other  accidents  resulting  in  injury  to  persons,  equipment,  or 
roadbed  arising  from  the  operation  of  such  railroad  under  such 
rules  and  regulations  as  may  be  prescribed  bj^  the  said  Commis- 
sion, which  report  shall  state  the  nature  and  causes  thereof  and 
the  circumstances  connected  therewith:  Provided,  That  hereafter 
all  said  carriers  shall  be  relieved  from  the  dutj^  of  reporting  ac- 
cidents in  their  annual  financial  and  operating  reports  made  to 
the  Commission. 

[Failure  to  make  report  within  thirty  days  after  end  of 
any  month  a  misdemeanor.] 

Sec.  2.  That  any  common  carrier  failing  to  make  such  report 
within  thirty  days  after  the  end  of  any  month  shall  be  deemed 
guilty  of  a  misdemeanor,  and  upon  conviction  thereof  by  a  court 

[Penalty.] 

of  competent  jurisdiction  shall  be  punished  by  a  fine  of  not  more 
than  one  hundred  dollars  for  each  and  every  offense  and  for 
every  day  during  which  it  shall  fail  to  make  such  report  after  the 
time  herein  specified  for  making  the  same. 

[Power  of  the  commission  to  investigate  accidents.] 

Sec.  3.  That  the  Interstate  Commerce  Commission  shall  have 
authority  to  investigate  all  collisions,  derailments,  or  other  acci- 
dents resulting  in  serious  injury  to  person  or  to  the  property  of 
a  railroad  occurring  on  the  line  of  any  common  carrier  engaged 
in  interstate  or  foreign  commerce  by  railroad.  The  Commission. 
or  any  impartial  investigator  thereunto  authorized  by  said  Com- 
mission, shall  have  authority  to  investigate  such  collisions,  derail- 
ments, or  other  accidents  aforesaid,  and  all  the  attending  facts, 

[Talcing:  of  testimony.] 

conditions,  and  circumstances,  and  for  that  purpose  may  sub- 
poena witnesses,  administer  oaths,  take  testimony,  and  require  the 
production  of  books,  papers,  orders,  memoranda,  exhibits,  and 

[651] 


G52  APPENDIX. 

other  evidence,  and  shall  be  pro\dded  by  said  carriers  with  all 

[State  com  missions.] 

reasonable  facilities:  Frovided,  That  when  such  accident  is  in- 
vestiprated  by  a  commission  of  the  State  in  which  it  occurred,  the 
Interstate  Commerce  Commission  shall,  if  convenient,  make  any 
investigation  it  ma,v  have  previously  determined  upon,  at  the 

[Reports    of   investigations.] 

same  time  as.  and  in  connection  with  the  state  commission  inves- 
ti.eation.  Said  Commission  shall,  when  it  deems  it  to  the  public 
interest,  make  reports  of  such  investigations,  stating  the  cause  of 
accident,  together  with  such  recommendations  as  it  deems  proper. 
Such  reports  shall  be  made  public  in  such  manner  as  the  Commis- 
sion deems  proper. 

[Reports  not  to  be  used  in  evidence  against  carrier.] 

Sec.  4.  That  neither  said  report  nor  any  report  of  said  investi- 
gation nor  any  part  thereof  shall  be  admitted  as  evidence  or  used 
for  any  purpose  in  any  suit  or  action  for  damages  growing  out 
of  any  matter  mentioned  in  said  report  or  investigation. 

[Form  of  report.] 

Sec.  5.  That  the  Interstate  Commerce  Commission  is  author- 
ized to  prescribe  for  such  common  carriers  a  method  and  form 
for  making  the  reports  hereinbefore  provided. 

[Repeal  of  prior  act.] 

Sec.  6.  That  the  Act  entitled  ' '  An  Act  requiring  common  car- 
riers engaged  in  interstate  commerce  to  make  full  reports  of  all 
accident^  to  the  Interstate  Commerce  Commission,"  approved 
March  third,  nineteen  hundred  and  one.  is  hereby  repealed. 

["Interstate     commerce"     and     "foreign     commerce"     de- 
fined.] 

Sec.  7.  That  the  term  "interstate  commerce,"  as  used  in  this 
Act,  shall  include  transportation  from  any  State  or  Territory  or 
the  District  of  Coliunbia  to  any  other  State  or  Territory  or  the 
District  of  Columbia,  and  the  term  "foreign  commerce,"  as  used 
in  this  Act,  shall  include  transportation  from  any  State  or  Terri- 
tory or  the  District  of  Columbia  to  any  foreign  country  and  from 
any  foreign  country  to  any  State  or  Territory  or  the  District  of 
Columbia. 

["When   act   effective.] 

Sec.  8.  That  this  Act  shall  take  effect  sixty  days  after  its  pas- 
sage. 

Public,  No.  165,  approved,  May  6,  1910. 


INTERSTATE  COMMERCE  COMMISSION. 


RULES 


OF 


PllACTlCE  BEFOr.E  THE  COMMISSION 


CASES  AM)  I'ROCEEDINGS 


DNDKR 


THE  ACT  TO  TvEGULATE  COMMERCE. 


REVISED     AMMEXDF.D    AND    ADOPTED 

January    14,   1911. 


RULES  OP  PRACTICE.  655 


RULES  OF  PRACTICE  BEFORE  THE  COMMISSION  IN 

CASES  AND  PROCEEDINGS  UNDER  THE  ACT 

TO  REGULATE  COMMEKCE. 


PUBLIC  SESSIONS. 

The  general  sessions  of  the  Commission  for  hearing  contested 
cases,  including  oral  argument,  will  be  held  at  its  office  in  the 
American  Bank  Building,  No.  1317  F  street  NW.,  Washington, 
D.  C,  and  the  two  weeks  beginning  with  the  first  Monday  in 
each  month  are  set  aside  for  that  purpose. 

Special  sessions  may  be  held  at  other  places  as  ordered  by  the 
commission. 

11. 

PARTIES  TO  CASES. 

Any  person,  firm,  compan}^,  corporation,  or  association,  mer- 
cantile, agricultural,  or  manufacturing  society,  body  politic  or 
municipal  organization,  or  any  common  carrier,  or  the  railroad 
commissioner  or  commission  of  any  State  or  Territorj^  may  com- 
plain to  the  commission  by  petition,  of  anything  done,  or  omitted 
to  be  done,  in  violation  of  the  provisions  of  the  act  to  regulate 
commerce  by  any  common  carrier  or  carriers  or  other  parties 
subject  to  the  provisions  of  said  act.  Where  a  complaint  relates 
to  the  rates,  regulations,  or  practices  of  a  single  carrier,  no  other 
carrier  need  be  made  a  party,  but  if  it  relates  to  matters  in  which 
two  or  more  carriers,  engaged  in  transportation  by  continuous 
carriage  or  shipment,  are  interested,  the  several  carriers  partici- 
pating in  such  carriage  or  shipment  are  proper  parties  defend- 
ant. 

"Where  a  complaint  relates  to  rates,  regulations,  or  practices 
of  carriers  operating  different  lines,  and  the  object  of  the  pro- 
ceeding is  to  secure  correction  of  such  rates,  regulations  or  prac- 
tices on  each  of  said  lines,  all  the  carriers  operating  such  lines 
must  be  made  defendants. 

AYhen  the  line  of  a  carrier  is  operated  by  a  receiver  or  trustee, 
both  the  carrier  and  its  receiver  or  trustee  should  be  made  de- 
fendants in  cases  involving  transportation  over  such  line. 


656  APPENDIX. 

Persons  or  carriers  not  parties  may  petition  in  any  proceeding- 
for  leave  to  intervene  and  be  heard  therein.  Such  petition  shall 
set  forth  the  petitioner's  interest  in  the  proceeding.  Leave 
granted  on  such  application  shall  entitle  the  intervener  to  appear 
and  be  treated  as  a  party  to  the  proceeding,  but  no  person  not  a 
carrier  Avh.o  intervenes  in  behalf  of  the  defense  shall  have  the 
right  to  file  an  answer  or  otherwise  become  a  party,  except  to 
have  notice  of  and  appear  at  the  taking  of  testimony,  produce 
and  cross-examine  witnesses,  ^and  be  heard,  in  person  or  by  coun- 
sel, on  the  argument  of  the  case. 

III. 

COMPLAINTS. 

Complaints  must  be  by  petition  setting  forth  briefly  the  facts 
claimed  to  constitute  a  violation  of  therlaw.  The  corporate  name 
of  the  carrier  or  carriers  complained  against  must  be  stated  in 
full,  and  the  address  of  the  petitioner,  with  the  name  and  address 
of  his  attorney  or  counsel,  if  any,  must  appear  upon  the  petition. 
The  petition  need  not  be  verified.  The  complainant  must  furnish 
as  many  copies  of  the  petition  as  there  may  be  parties  complained 
against  to  be  served  and  three  additional  copies  for  the  use  of 
the  commission. 

The  commission  Avill  cause  a  copy  of  the  petition,  with  notice 
to  satisfy  or  answer  the  same  within  a  specified  time,  to  be  served 
personally  upon  the  properly  designated  agent  of  each  defend- 
ant, or,  in  the  absence  of  such  designated  agent,  by  posting  in  the 
office  of  the  secretary  of  the  commission. 

Complaints  which  involve  the  same  or  substantially  the  same 
principle,  subject,  or  state  of  facts,  even  though  two  or  more  rates 
or  regulations  are  alleged  to  be  unreasonable  or  discriminatory 
and  numerous  shipments  are  affected  thereby  should  be  included 
in  one  complaint;  in  which  the  several  rates,  regulations,  dis- 
criminations, and  shipments  are  set  out  in  items,  exhibits,  or 
paragraphs.  Two  or  more  complainants  may  join  in  one  com- 
plaint against  one  or  more  carriers,  and  one  complainant's  com- 
plaints against  two  or  more  carriers  may  be  included  in  one  com 
plaint,  when  the  subject  of  complaint,  the  principle  involved,  or 
the  state  of  facts  is  substantially  the  same.  In  other  words,  two 
or  more  complaints  should  not  be  filed  when  one  complaint  can 
be  made  fairly  to  cover  the  subject,  the  principle,  or  the  facts. 


BULES   OF   PRACTICE.  60 


IV. 


ANSWERS, 

A  defendant  mnst  answer  within  twenty  days  from  the  date  of 
the  notice  above  provided  for,  but  the  commission  may,  in  a  par- 
ticular case,  recjuire  the  answer  to  be  filed  within  a  sliorter  time. 
The  time  prescribed  in  any  ease  may  be  extended,  upon  gootl 
cause  shown,  by  the  commission.  The  original  answer  must  be 
filed  with  the  secretary  of  the  commission  at  its  office  in  Wash- 
ington, and  a  copy  thereof  at  the  same  time  served  by  the  de- 
fendant, personally  or  by  mail,  upon  tlie  complainant,  who  must 
forthwith  notify  the  secretary  of  its  receipt.  The  answer  must 
specifically  admit  or  deny  the  material  allegations  of  the  petition. 
and  also  set  forth  the  facts  which  will  be  relied  upon  to  support 
any  such  denial.  If  a  defendant  shall  make  satisfaction  before 
answering,  a  written  acknowledgement  thereof,  showing  the 
character  and  extent  of  the  satisfaction  given,  must  ])e  filed  by 
the  complainant,  and  in  that  case  the  fact  and  manner  of  satis- 
faction, without  other  matter,  may  be  set  forth  in  the  answer.  If 
satisfaction  be  made  after  the  filing  and  service  of  an  answer, 
such  written  acknowledgement  must  also  be  filed  by  the  com-, 
plainant,  and  a  supplemental  answer  setting  forth  the  fact  and 
manner  of  satisfaction  must  be  filed  by  the  defendant. 

V. 

NOTICE  IN  NATURE  OF  DEMURRER. 

A  defendant  who  deems  the  petition  insufficient  to  show  a 
breach  of  legal  duty  may.  instead  of  answering  or  formally  de- 
murring, serve  on  the  complainant  notice  of  hearing  on  the  pe- 
tition; and  in  such  case  the  facts  stated  in  the  petition  will  be 
deemed  admitted.  A  copy  of  the  notice  uuist  at  the  same  time 
be  filed  with  the  secretary  of  the  commission.  The  filing  of  an 
answer,  however,  will  not  be  deemed  an  admission  of  the  suffici- 
ency of  the  petition,  but  a  motion  to  dismiss  for  insufficiency  may 
be  made  at  the  hearing. 

YI. 

SERVICE  OF  PAPERS. 

Copies  of  notices  or  other  papers  must  be  served  upon  the  ad- 
verse party  or  parties,  personally  or  by  mail,   and  when  any 
42 


G58  APPENDIX. 

party  has  appeared  by  attorney  service  upon  such  attorney  shall 
be  deemed  proper  service  upon  the  party. 

VII. 

AMEISTDMENTS. 

Upon  application  of  any  party,  amendments  to  any  petition  or 
answer,  in  any  proceeding  or  investigation,  may  be  allowed  by 
the  commission,  in  its  discretion. 

VIII. 

ADJOURNMENTS  AND  EXTENSIONS  OP  TIME. 

Adjournments  and  extensions  of  time  may  be  granted  upon 
the  application  of  any  party,  in  the  discretion  of  the  commission. 

IX. 

STIPULATION. 

The  parties  to  any  proceeding  or  investigation  before  the 
"commission  may,  by  stipulation  in  writing  filed  with  the  secre- 
tary, agree  upon  the  facts,  or  any  portion  thereof,  involved  in 
the  controversy,  which  stipulation  shall  be  regarded  and  used  as 
evidence  on  the  hearing.  It  is  desired  that  the  facts  be  thus 
agreed  upon  whenever  practicable. 

X. 

HEARINGS. 

Upon  issue  being  joined  by  the  service  of  an  answer  or  notice 
of  hearing  on  the  petition,  the  commission  will  assign  a  time  and 
place  for  hearing  the  case,  which  will  be  at  its  office  in  Washing- 
ton, unless  otherwise  ordered.  Witnesses  will  be  examined  orally 
before  the  commission  or  one  of  its  examiners,  unless  their  testi- 
mony be  taken  or  the  facts  be  agreed  upon  as  provided  for  in 
these  rules.  The  complainant  must  in  all  cases  establish  the  facts 
alleged  to  constitute  a  violation  of  the  law,  unless  the  defendant 
admits  the  same  or  fails  to  answer  the  petition.  The  defendant 
must  also  prove  facts  alleged  in  the  answer,  unless  admitted  by 
the  petitioner,  and  fully  disclose  its  defense  at  the  hearing. 


RULES   OF   PRACTICE.       •  659 

In  case  of  failure  to  answer,  the  commission  will  take  such 
proof  of  the  facts  as  may  be  deemed  proper  and  reasonable,  and 
make  such  order  thereon  as  the  circumstances  of  the  case  appear 
to  require._ 

Cases  may  be  heard  by  one  or  more  members  of  the  commis- 
sion, or  by  a  special  agent  or  examiner,  as  ordered  by  the  com- 
mission. When  testimony  is  directed  to  be  taken  by  a  special 
agent  or  examiner,  such  officer  shall  have  power  to  administer 
oaths,  examine  w'itnesscs,  and  receive  evidence,  and  shall  make 
report  thereof  to  the  commission. 

All  cases  shall  be  orally  argued  in  Washington,  D.  C,  or  sub- 
mitted upon  briefs,  unless  otherwise  ordered  by  the  commission. 

XL 

DEPOSITIONS. 

The  testimony  of  any  witness  may  be  taken  by  deposition,  at 
the  instance  of  a  party,  in  any  case  before  the  commission,  and 
at  any  time  after  the  same  is  at  issue.  The  commission  may  also 
order  testimony  to  be  taken  by  deposition,  in  any  proceeding  or 
investigation  pending  before  it,  at  any  stage  of  such  proceeding 
or  investigation.  Such  depositions  may  be  taken  before  any  au- 
thorized special  agent  or  examiner  of  the  commission,  .judge  of 
any  court  of  tlio  United  States,  or  any  commissioner  of  a  circuit 
or  an}^  clerk  of  a  district  or  circuit  court,  or  any  chancellor,  just- 
ice or  judge  of  a  supreme  or  superior  court,  mayor  or  chief  magis- 
trate of  a  city,  judge  of  a  county  court,  or  court  of  common  pleas 
of  any  of  the  United  States,  or  any  notary  public,  not  being  of 
counsel  or  attornej'  to  either  of  the  parties  or  otherwise  inter- 
ested in  the  proceeding  or  investigation.  Eeasonable  notice  must 
be  given  in  writing  by  the  party  or  his  attorney  proposing  to 
take  such  deposition  to  the  opposite  party  or  his  attorney  of 
record,  W'hich  notice  shall  state  the  name  of  the  witness  and  the 
time  and  place  of  the  taking  of  his  deposition,  and  a  copy  of  such 
notice  shall  be  filed  with  the  secretary  of  the  commission. 

When  testimony  is  to  be  taken  on  behalf  of  a  common  carrier 
in  any  proceeding  instituted  by  the  commission  on  its  own  mo- 
tion, reasonable  notice  thereof  in  writing  must  be  given  by  such 
carrier  to  the  secretary  of  the  commission. 

Every  person  whose  deposition  is  taken  shall  be  cautioned  and 


660  APPENDIX. 

sworn  (or  may  affirm,  if  he  so  request)  to  testify  the  whole  truth, 
and  shall  be  carefully  examined.  His  testimony  shall  be  reduced 
to  writing,  which  may  be  typewriting,  by  the  magistrate  taking 
the  deposition,  or  under  his  direction,  and  shall,  after  it  has 
been  reduced  to  writing,  be  subscribed  by  the  witness. 

If  a  witness  whose  testimony  may  be  desired  to  be  taken  by 
deposition  be  in  a  foreign  country,  the  deposition  may  be  taken 
before  an  officer  or  person  designated  by  the  commission,  or 
agreed  upon  by  the  parties  by  stipulation  in  writing  to  be  filed 
mth  the  secretary.  All  depositions  must  be  promptly  filed  with 
the  secretary. 

XII. 

"WITXESSES  AND  SUBPOENAS. 

Subpoenas  requiring  the  attendance  of  "witnesses  from  any 
place  in  the  United  States  to  any  designated  place  of  hearing,  for 
the  purpose  of  taking  the  testimony  of  such  witnesses  orally  be- 
fore one  or  more  members  of  the  commission,  or  an  authorized 
special  agent  or  examiner  of  the  commission,  or  by  deposition, 
will,  upon  the  application  of  either  party,  or  upon  the  order  of 
the  commission  directing  the  taking  of  such  testimony,  be  issued 
by  any  member  of  the  commission. 

Subpoenas  for  the  production  of  books,  papers,  or  documents 
(unless  directed  to  issue  by  the  commission  upon  its  own  motion) 
will  only  be  issued  upon  application  in  writing;  and  when  it  is 
sought  to  compel  witnesses,  not  parties  to  the  proceeding,  to 
produce  such  documentary  evidence,  the  application  must  be 
sworn  to  and  must  specify,  as  nearly  as  may  be,  the  books,  pa- 
pers, or  documents  desired;  that  the  same  are  in  the  possession 
of  the  witness  or  under  his  control;  and  also,  by  facts  stated, 
show  that  they  contain  material  evidence  necessary  to  the  ap- 
plicant. Applications  to  compel  a  party  to  the  proceeding  to 
produce  books,  papers,  or  documents  need  only  set  forth  in  a 
general  way  the  books,  papers,  or  documents  desired  to  be  pro- 
duced, and  that  the  applicant  believes  they  will  be  of  service  in 
the  determination  of  the  case. 

Witnesses  whose  testimony  is  taken  orally  or  by  deposition, 
and  the  magistrate  or  other  officer  taking  such  depositions,  are 
severally  entitled  to  the  same  fees  as  are  paid  for  like  services 


RULES   OF   PRACTICE.  GGl 

in  tile  courts  of  the  United  States,  such  fees  to  be  paid  by  the 
party  at  whose  instance  the  testimony  is  takeiL* 

XIII. 

DOCUMENTARY  EVIDENCE. 

"Where  relevant  and  material  matter  offered  in  evidence  is  em- 
braced in  a  report,  tariff,  rate  sheet,  classification,  book,  pam- 
phlet, written  or  printed  statement,  or  document  of  any  kind 
containing  other  matter  not  material  or  relevant  and  not  in- 
tended to  be  put  in  evidence,  such  report,  etc.,  in  whole,  shall  not 
be  received  or  allowed  to  be  filed  in  a  cause  on  hearing  before 
this  commission  or  at  any  time  during  the  pendency  thereof,  but 
counsel  or  other  party  offering  the  same  shall  also  present  in 
convenient  and  proper  form  for  filing  a  .copy  of  such  material 
and  relevant  matter,  and  that  only  shall  be  received  and  allowed 
to  be  filed  as  evidence  and  made  part  of  the  record  in  such  cause  •. 
provided,  however,  that,  if  practicable,  such  matter  may  be  read 
and  taken  down  by  the  reporter  and  thus  made  part  of  the  rec- 
ord. 

XIV. 

BRIEFS. 

Unless  otherwise  specially  ordered,  printed  briefs  shall  be 
filed  on  behalf  of  the  parties  in  each  case.  The  brief  for  com- 
plainant and  the  brief  or  briefs  for  the  defendants,  or  interven- 
ers, shall  contain  an  abstract  of  the  evidence  relied  upon  by  the 
parties  filing  the  same;  and  in  such  abstract  reference  shall  be 
made  to  the  pages  of  the  record  wherein  the  evidence  appears. 
The  abstract  of  e^^dence  should  follow  the  statement  of  the  case 
and  precede  the  argument.  Briefs  shall  be  printed  in  12-point 
type,  on  antique-finish  paper,  5%  inches  wide  by  9  inches  long, 
with  suitable  margins,  double-leaded  text  and  single-leaded  cita- 
tions. 

At  the  close  of  the  taking  of  the  testimony  in  each  case  the 
commissioner  or  examiner  before  whom  such  testimony  is  taken 


*  Fees  of  witnesses  are  fixed  by  law  at  $1.50  for  each  day's  attend- 
ance at  the  place  of  hearing  or  of  taking  depositions,  and  5  cents  per 
mile  for  going  to  said  place  from  his  place  of  residence  and  5  cents 
per  mile  for  returning  therefrom. 


662  APPENDIX. 

shall  fix  the  specific  dates  on  or  before  which  the  briefs  of  the  re- 
spective parties  naust  be  filed  with  the  commission  and  served 
on  the  adverse  parties.  The  date  so  fixed,  unless  otherwise  or- 
dered at  said  time,  shall  allow  to  the  respective  parties  the  fol- 
lowing periods  of  time  within  which  to  file  with  the  eonunission 
and  serve  their  respective  briefs  on  the  adverse  parties,  to  wit: 
To  the  complainant,  thirty  days  from  the  date  of  the  conclusion 
of  the  testimony ;  to  the  defendants  and  interveners,  fifteen  days 
after  the  specific  date  fixed  for  the  complainant,  and  to  com- 
plainant for  reply  brief,  ten  days  after  the  date  fixed  for  defend- 
ants or  interveners.  If  the  briefs  of  the  respective  parties  are 
not  filed  and  served  on  the  date  fixed  for  each,  the  case  will  stand 
submitted  without  briefs  on  the  date  that  defendants  or  inter- 
veners' briefs  are  due.  Briefs  of  parties  not  filed  as  aforesaid 
and  served  on  the  respective  parties  on  or  before  the  specific 
dates  fixed  therefor  will  not  be  received  or  considered  by  the  com- 
mission. All  briefs  shall  be  filed  w^ith  the  secretary  and  shall  be 
accompanied  by  notice  showing  service  upon  the  adverse  parties, 
and  twenty-five  copies  of  each  brief  shall  be  filed  for  the  use  of 
the  commission.  The  parties  will  be  required  to  comply  strictly 
with  this  rule,  and  except  for  good  cause  shown,  no  extension  of 
time  will  be  allowed.  Applications  for  extension  of  time  in 
which  to  file  briefs  shall  be  by  petition,  in  writing,  stating  the 
facts  on  which  the  application  rests,  which  must  be  filed  with  the 
commission  at  least  five  days  before  the  time  for  filing  such  brief 
has  expired. 

Applications  for  oral  argument  may  be  made  by  any  party  at 
the  close  of  the  taking  of  the  testimony  or  at  the  time  of  the 
filing  of  his  brief.  Such  applications  can  be  granted  only  by 
the  commission. 

XV. 

EEHEARINGS. 

Applications  for  reopening  a  case  after  final  submission,  or 
for  rehearing  after  decision  made  by  the  commission,  must  be 
by  petition,  and  must  state  specifically  the  grounds  upon  which 
the  application  is  based.  If  such  application  be  to  reopen  the 
case  for  further  evidence,  the  nature  and  purpose  of  such  evi- 
dence must  be  briefly  state,  and  the  same  must  not  be  merely  cum- 
ulative.   If  the  application  be  for  a  rehearing,  the  petition  must 


ruIjES  of  practice,  663 

specify  the  findings  of  fact  and  conclusions  of  law  claimed  to  be 
erroneous,  with  a  brief  statement  of  the  grounds  of  error;  and 
when  any  decision,  order,  or  requirement  of  the  commission  is 
sought  to  be  reversed,  changed,  or  modified  on  account  of  facts 
and  circumstances  arirsing  subsequent  to  the  hearing,  or  of  conse- 
quences resulting  from  compliance  with  such  decision,  order,  or 
requirement  which  are  claimed  to  justify  a  reconsideration  of  the 
case,  the  matters  relied  upon  by  the  applicant  must  be  fully  set 
forth.  At  least  eight  copies  of  all  such  applications  must  be  filed 
with  the  commission. 

XVI. 

PRINTING  OF  PLEADINGS,  ETC. 

Pleadings,  depositions,  and  other  papers  of  importance  shall 
be  printed  or  in  typewriting,  and  when  not  printed  only  one  side 
of  the  paper  shall  be  used. 

XVII. 

COPIES  OF  PAPERS  OR  TESTIMONY. 

Copies  of  any  report,  decision,  order,  or  requirement  of  the 
commission  will  be  furnished  without  charge  upon  application 
to  the  secretary  by  any  person  or  carrier  party  to  the  proceed- 
ings. 

One  copy  of  the  testimony  will  be  furnished  by  the  commission 
for  the  use  of  the  complainant  and  one  copy  for  the  use  of  the 
defendant  without  charge ;  and  when  two  or  more  complainants 
or  defendants  have  appeared  at  the  hearing,  such  complainants 
or  defendants  must  designate  to  whom  the  copy  for  their  use 
shall  be  delivered. 

XVIII. 

COMPLIANCE  V7ITH  ORDERS. 

Upon  the  issuance  of  an  order  against  any  defendant  or  de- 
fendants, after  hearing,  investigation,  and  report  by  the  com- 
mission such,  defendant  or  defendants  must  promptly  notify  the 
secretary  of  the  commission,  upon  the  date  when  such  order  be- 
comes efi'ective,  as  to  whether  such  defendant  or  defendants  has 
complied  or  not  with  the  provisions  of  said  order;  and  when  a 
change  in  rates  is  required,  such  notice  must  be  given  in  addition 
to  the  filing  of  a  schedule  or  tariff  showing  such  change  in  rates. 


664  APPENDIX. 

XIX. 

APPLICATIONS    BY     CARRIERS    ITXDER    PROVISO     CLAUSE    OF    FOURTH 

SECTION, 

Am^  common  carrier  may  apply  to  the  commission,  under  the 
pro\dso  clause  of  the  fourth  section,  for  authority  to  charge  for 
the  transportation  of  like  kind  of  property  less  for  a  longer  than 
for  a  shorter  distance  over  the  same  line,  in  the  same  direction, 
the  shorter  being  included  within  the  longer  distance.  Such  ap- 
plication shall  be  by  petition,  which  shall  specify  the  places  and 
traffic  involved,  the  rates  charged  on  such  traffic  for  the  shorter 
and  longer  distances,  the  carriers  other  than  the  petitioner  which 
may  be  interested  in  the  traffic,  the  character  of  the  hardship 
claimed  to  exist,  and  the  extent  of  the  relief  sought  by  the  peti- 
tioner. Upon  the  tiling  of  such  a  petition,  the  commission  will 
take  such  action  as  the  circumstances  of  the  case  seem  to  require. 

XX. 

INFORMATION  TO  PARTIES, 

The  secretary  of  the  commission  will,  upon  request,  advise 
any  party  as  to  the  form  of  petition,  answer,  or  other  paper  nec- 
essary to  be  filed  in  any  case,  and  furnish  such  information  from 
the  files  of  the  commission  as  will  conduce  to  a  proper  presenta- 
tion of  facts  material  to  the  controversy. 

XXI. 

ADDRESS  OF  THE  COMMISSION. 

All  complaints  concerning  anything  done  or  omitted  to  be  done 
by  any  common  carrier,  and  all  petitions  or  answers  in  any  pro- 
ceeding, or  applications  in  relation  thereto,  and  all  letters  and 
telegrams  for  the  commission,  must  be  addressed  to  Washington, 
D.  C,  unless  otherwise  specially  directed. 


FORMS.  665 


FORMS  ADOPTED  BY   INTERSTATE  COMMERCE   COM- 
MISSION. 

No.  1. — Complaint  against  a  single  carrier. 

No.  2. — Complaint  against  two  or  more  carriers. 

No.  3. — Answer. 

No.  4. — Notice  by  carrier  mider  Rule  V. 

No.  5. — Subpoena. 

No.  6. — Notice  of  taking  depositions  under  Rule  XII. 

These  forms  may  6e  used  in  cases  to  which  they  are  applicable,  uith 
such  alterations  as  the  circumstances  may  render  necessary. 


666  APPENDIX. 


No.  1. 
Complaint  against  a  single  carrier. 

INTERSTATE  COMMERCE  COMMISSION. 


A.B. 

against 
The Railroad  Company. 


''(Full  title,  whether  of  cor- 
porate complainants  or  de- 
fendants, must  he  given  and 
not  ahhreviated.  Fidl  first 
names  of  individual  com- 
plainants must  also  be 
given.) 

The  petition  of  the  above-named  complainant  respectfully 
shows : 

I.  That  (here  let  complainant  state  Ms  occupation  and  place 
of  business) . 

II.  That  the  defendant  above  named  is  a  common  carrier 
engaged  in  the  transportation  of  passengers  and  property  by 

railroad  between  points  in  the  State  of  and  points  in 

the  State  of  ,  and  as  such  common  carrier  is  subject  to 

the  provisions  of  the  act  to  regulate  commerce,  approved  Feb- 
ruary 4,  1887,  and  acts  -amendatory  thereof  or  supplementary 
thereto. 

III.  That  (here  state  concisely  the  matters  intended  to  he  com- 
plained of.  Continue  numbering  each  succeeding  paragraph  as 
in  Nos.  I,  II,  and  III) . 

"Wherefore  the  petitioner  prays  that  the  defendant  may  be  re- 
quired to  answer  the  charges  herein,  and  that  after  due  hearing 
and  investigation  an  order  be  made  commanding  the  defendant 
to  cease  and  desist  from  said  violations  of  the  act  to  regulate 
commerce,  and  for  such  other  and  further  order  as  the  Commis- 
sion may  deem  necessary  in  the  premises.  (The  prayer  may  he 
varied  so  as  to  ask  also  for  the  ascertainment  of  laivfid  rates  or 
practices  and  an  order  requiring  the  carrier  to  conform  thereto. 
If  reparation  for  any  wrong  or  injury  be  desired,  the  petitioner 
.should  state  the  nature  and  extent  of  the  reparation  he  deems 
proper). 

Dated  at , ,  190—. 

A.  B. 
(Complainant's  signature.) 


A.  B. 

against 
The RAiLROiM)    Company.  -< 

AND 

The Railroad  Company. 


FORMS.  667 

No.  2. 
Complaint  against  two  or  more  carriers. 

INTERSTATE  COMMERCE  COMMISSION. 

^(Fiill  title,  whether  of  cor- 
porate complainants  or  de- 
fendants, must  he  given  and 
not  abbreviated.  Full  first 
names  of  individual  com- 
plainants must  also  be 
given.) 

The  petition  of  the  above-named  complainant  respectfully 
shows : 

I.  That  {here  let  complainant  state  his  occupation  and  place 
of  business). 

II.  That  the  defendants  above  named  are  common  carriers  en- 
gaged in  the  transportation  of  passengers  and  property  by  con- 
tinuous carriage  or  shipment,  wholly  by  railroad  (or  partly  by 
railroad  and  partly  by  water,  as  the  case  may  be),  between  points 

in  the  State  of and  points  in  the  State  of ,  and  as 

such  common  carriers  are  subject  to  the  provisions  of  the  act 
to  regulate  commerce,  approved  February  4,  1887,  and  acts 
amendatory  thereof  or  supplementary  thereto. 

(Then  proceed  as  in  Form  1.) 

No.  3. 
Answer. 

INTERSTATE  COMMERCE  COMMISSION, 

A.  B.  ^ 

against  > 

The Railroad  Company,  j 

The  above-named  defendant,  for  answer  to  the  complaint  in 
this  proceeding,  respectfully  states — 

I.  That  {here  follow  the  usual  admissions,  denials,  and  aver- 
ments.   Continuue  numbering  each  succeeding  paragraph). 

"Wherefore  the  defendant  prays  that  the  complaint  in  this  pro- 
ceeding be  dismissed. 

The Railroad  Company, 

By  E.  F. 

(Title  of  officer.) 


^68  APPENDIX. 


No.  4. 


Notice  by  carrier  under  Rule  V. 


INTERSTATE   COMMERCE  COMMISSION. 

A.  B. 

against 


The Railroad    Company.J 

Notice  is  hereby  given  under  Rule  Y  of  the  Rules  of  Practice 
in  proceedings  before  the  Commission  that  a  hearing  is  desired  in 
tliis  proceeding  upon  the  facts  as  stated  in  the  complaint. 

The Railroad  Company, 

By  E.  F. 

(Title  of  officer.) 


No.  5. 
Subpoena. 


To 


You  are  hereby  required  to  appear  before in  the  matter 

of  a  complaint  of against ,  as  a  witness  on  the  part 

of .  on  the day  of ,  190 — ,  at o'clock 

— .  m,  at ,  and  bring  with  you  then  and  there . 

Dated 

(Seal.)  , 

Commissioner, 


Attorney  for . 

(Notice. — Witness  fees  for  attendance  under  this  subpoena  are 
to  be  paid  by  the  party  at  whose  instance  the  witness  is  sum- 
moned, and  every  copy  of  this  summons  for  the  witness  must 
contain  a  copy  of  this  notice.) 


FORMS  66^ 


No.  6. 


Notice  of  taking  depositions  under  Rule  XII. 

INTERSTATE   COMMERCE  COMMISSION. 

The Railroad    CoMPANy."^ 

against  > 

A.  B.  J 

You  are  hereby  notified  that  G.  IT.  will  be  be  examined  before 

C.  D.,  a {title  of  officer  or  magistrate) ,  at ,  on  the 

day  of ,  190 — ,  at o'clock  in  the noon,  as 

a  witness  for  the  above-named  complainant  (or  defendant,  as  the 
case  may  he),  according  to  act  of  Congress  in  such  case  made  and 
provided,  and  the  Rules  of  Practice  of  the  Interstate  Commerce 
Commission,  at  which  time  and  place  you  are  notified  to  be  pres- 
ent and  take  part  in  the  examination  of  the  said  witness. 

Dated .  100—. 

I.J. 
(Signature  of  complainant  or  defendant,  or  of  counsel.) 

To  A.  B.,  the  above-named  complainant  (or  The EaU- 

road  Company,  the  ahove-named.  defendant;  or  to  K.  L.,  counsel 
for  the  ahove-named  complainant  or  defendant.) 


€tO  APPENDIX. 


UNITED  STATES  COMMERCE  COURT. 

The  folloAving  rules  have  been  adopted  by  the  United  States 
Commerce  Court  with  the  suggestion  that  additional  rules  will 
probably  be  adopted  during  the  next  session  of  the  Court  (1911). 

RULES. 

Admission  of  attorneys. 

Parties  shall  be  entitled  to  be  represented  in  court  by  counsel. 
Any  person  of  good  moral  character,  learned  in  the  law,  shall 
be  admitted  to  practice  as  an  attorney  and  counselor  of  this  court 
who  shall  have  been  previously  admitted  to  the  supreme  court 
or  any  other  court  of  the  United  States,  or  to  a  court  of  last  re- 
sort of  any  state,  or  territory,  and  who  shall  be  in  full  and  regu- 
lar standing  therein,  due  proof  of  which  shall  be  made  by  cer- 
tificate from  the  record  or  from  one  of  the  judges  of  such  court 
or  by  motion  of  an  attorney  of  this  court.  He  shall  subscribe 
to  the  roll  at  the  time  of  his  admission  and  take  the  following 
oath : 

I  do  swear  (or  affirm)  that  I  will  demean  myself,  as  an  at- 
torney and  counselor  of  this  court,  uprightly  and  according  to 
law;  and  that  I  will  support  the  Constitution  of  the  United 
States. 

Arguments. 

Two  hours  on  each  side  shall  be  allowed  for  argument,  and  no 
more  without  special  leave  of  court,  obtained  before  the  begin- 
ning of  the  argument.  The  time  so  allowed  may  be  apportioned 
among  the  counsel  on  the  same  side  at  their  discretion. 

Cost  and  fees. 

The  following  table  of  costs  and  fees  is  adopted. 
Clerk: 

For  docketing  a  case $5.00 

For  entering  any  final  decree  or  order  or  judgment 1.00 


UNITED    STATICS    COMMERCE    COURT.  671 

For  a  certified  copy  of  an  entry,  record  or  paper  on 
file  for  each  folio  of  100  words  (no  such  fee,  how- 
ever, to  be  less  than  50  cents) 10 

For  admission  to  the  bar,  including  certificate  under 

seal 2.00 

Mashall : 
For  service  of  any  writ,  subpoena,  or  order,  for  each 

party  upon  whom  service  is  made 1.00 

In  case  of  the  service  of  process  by  the  marshal  of  a  district 
outside  of  the  city  of  Washington,  in  addition  to  the  fees  just 
prescribed,  the  marshal  shall  receive  the  same  mileage  as  is  by 
law  allowed  to  marshals  for  serving  process  issued  by  the  District 
Court  of  the  United  States  in  the  district  where  such  service  is 
performed. 

No  fees  shall  be  taxed  against  the  United  States  or  the  Inter- 
state Commerce  Commission. 

Evidence. 

The  evidence  in  any  case  may  be  taken  before  one  of  the  .judges 
of  the  court  specially  designated  to  do  so,  who  shall  have  power 
to  rule  upon  the  admission  or  rejection  of  the  evidence  offered ;  or 
it  may  be  taken  before  an  examininer  duly  appointed  for  the  pur- 
pose, by  standing  or  special  order.  Where  neither  of  these  meth- 
ods is  practicable,  it  may  be  taken  by  depositions,  in  accordance 
mth  the  practice  prevailing  in  this  district  courts  of  the  United 
States  in  like  cases.  In  all. cases  it  shall  be  taken  stenographic- 
ally,  in  the  form  of  question  and  answer,  and  reduced  to  type- 
writing and  filed.  No  witnesses  shall  be  examined  in  open  court, 
except  by  leave  of  court  for  cause  shown.  The  examiners  shall 
be  entitled  to  their  expenses  for  each  day  actually  engaged  in 
the  performance  of  their  duties,  and  to  such  compensation  as  may 
be  fixed  by  the  court  in  each  case.  x 

Interstate  Commerce  Commission. 

The  Interstate  Commerce  Commission  may  cause  its  counsel  to 
enter  an  appearance  ou  its  behalf  in  tlie  office  of  the  clerk  of  the 
court  in  any  suit  instituted  in  the  court  wherein  is  involved,  in 
whole  or  in  part,  the  validity  of  any  order  or  requirement  of  the 
commission ;  and  from  and  after  such  appearance  the  commission 
shall  be  a  party  to  the  suit  and  entitle  to  notice  of  any  and  all 


672  APPENDIX. 

proceedings  therein,  and  may  participate  in  snch  suit  in  the  same 
manner  and  to  the  same  extent  as  though  named  as  a  party  at  the 
time  of  its  institution. 

Motions. 

All  motions  to  the  court  shall  be  reduced  to  writing,  and  shall 
contain  a  brief  statement  of  the  facts  and  objects  of  the  motion. 

The  court  may  for  good  cause  shown,  shorten  the  time  of  no- 
tice of  hearing  of  any  motion. 

Motions  to  dismiss. 

Motions  to  dismiss  a  petition  for  want  of  jurisdiction,  or  on 
the  ground  of  insufficiency,  as  not  setting  forth  a  good  caiLse  of 
action,  may  be  made  at  any  time  before  answer  filed,  the  objec- 
tions on  wliich  the  motion  is  made  being  specified  and  filed,  and 
may  thereupon  be  set  down  for  argument  on  two  weeks'  notice 
to  the  petitioner  or  his  counsel. 

Motions  to  dismiss  the  answer  on  the  ground  that  no  defense 
is  set  forth  may  also  be  similarly  made  at  any  time  within  10  days 
after  the  answer  has  been  filed,  and  shall  be  similarly  disposed  of. 

If  the  motion  to  dismiss  in  either  case  is  overruled,  and  the 
party  making  the  same  elects  to  stand  by  it,  it  may  be  treated  as 
a  demurrer,  and  judgment  thereon  be  rendered  accordingly. 

Objections  to  the  sufficiency  of  the  petition  or  of  the  answer,  as 
not  setting  forth  a  good  cause  of  action  or  defense,  may  also  be 
taken  at  the  final  hearing  by  way  of  argument  Avithout  written 
specification. 

Parties. 

The  party  who  invokes  the  jurisdiction  of  the  court  by  petition 
duly  filed  shall  be  called  the  petitioner,  and  the  party  who  an- 
swers or  demurs  or  moves  to  dismiss  shall  be  called  the  respond- 
ent, and  the  party  who  intervenes  shall  be  called  intervener. 

Process. 

Upon  the  filing  of  a  petition  for  relief,  a  writ  of  subpcena  in 
the  name  of  the  President  of  the  United  States  shall  issue,  di- 
rected to  the  respondent  or  respondents,  requiring  him  or  them 
to  answer  said  petition  within  thirty  days  after  service  thereof  by 
filing  in  the  clerk's  office  an  answer  which  shall  briefly  and  cate- 
gorically respond  to  the  allegations  of  the  petition  and  by  mail- 


UNITED    STATES    COMMERCE    COURT.  673 

ing  a  copy  of  said  answer  to  Ihe  attorney  of  the  petitioner.  Such 
subpa'na  shall  be  under  seal  of  the  court,  signed  by  the  clerk, 
and  bear  teste  of  the  presiding  judge.  A  copy  of  the  petition 
shall  be  served  with  the  subpa'ua. 

The  service  of  all  subpa-nas  shall  be  by  deliver}-  of  a  copy 
thereof  by  the  officer  serving  the  same  to  the  respondent  person- 
ally, or,  in  wise  the  respondent  is  a  railroad  or  other  carrier, 
then  to  the  designated  agent  of  such  carrier.  AVhere  the  United 
States  is  a  respondent,  a  copy  shall  be  delivered  to  the  chief  clerk 
of  the  De])artment  of  Justice,  and  where  the  respondent  is  the 
Interstate  Commerce  Commission,  a  copy  shall  be  delivered  to 
the  secretary  of  the  commission. 

Printing-  records. 

The  record,  including  the  pleadings  and  evidence,  shall  ho 
printed  prior  to  the  argument,  and  a  sufficient  number  of  copies, 
not  less  than  twenty-live,  shall  be  filed  with  the  clerk  for  the  ac- 
commodation of  the  court  and  counsel.  Each  party  in  the  first 
instance  shall  bear  the  expense  of  printing  his  or  its  part  of  the 
record,  which  shall  be  taxed  as  a  part  of  the  costs  against  the 
losing  party,  except  that  no  such  costs  shall  be  taxable  against 
the  Government  or  the  Interstate  Commerce  Comission. 

The  briefs  of  counsel  shall  also  be  printed,  and  a  like  number 
of  copies  filed  with  the  clerk ;  those  of  the  petitioners  at  least  two 
weeks  and  those  of  the  respondents  and  interveners  at  least  one 
week  before  the  time  when  the  case  is  set  for  argument. 

Each  counsel  appearing  in  a  case  shall  be  entitled  to  a  copy  of 
the  record  and  of  the  brief  of  the  opposing  counsel,  which  shall 
be  forwarded  to  him  by  the  clerk  at  once  upon  being  filed. 

In  size  of  books,,  sty'e  of  type,  and  quality  of  paper  the  print- 
ing sliall  be  as  required  by  the  rules  of  the  supreme  court. 

All  records,  arguments,  and  briefs,  printed  for  the  use  of  the 
court,  must  be  in  such  form  and  size  that  they  can  be  conveni- 
ently be  bound  together,  so  as  to  make  an  ordinary  octavo  vol- 
lune;  and,  as  well  as  all  quotations  contained  therein,  and  the 
covers  thereof,  must  be  printed  in  clear  type  (never  smaller  than 
small  pica)  and  on  unglazed  paper. 

The  court  or  any  judge  thereof  may,  for  good  cause  shown,  dis- 
pense with  the  requirement  of  printing  the  record  on  motion  for 
preliminary  injunction. 
43 


REPORT  OF  THE 


National  Securities  Commission 


Appointed  Under  Act  of  Congress 
June  16,   1911. 


REPORT     OF     NATIONAL     SECURITIES     COALMISSION 

(NOV.  1911),  APPOINTED  BY  THE  PRESIDENT 

UNDER  SECTION  10  OF  JUNE  18,  1910. 

November  1,  1911. 
The  President: 

The  undersigned  have  the  honor  to  make  to  the  President  the 
following  report  as  responsive  to  Section  16  of  the  Act  of  Con- 
gress approved  on  June  18,  1910,  the  material  portion  of  which 
reads  as  follows : 

' '  That  the  President  is  hereby  authorized  to  appoint  a  commis- 
sion to  investigate  questions  pertaining  to  the  issuance  of  stocks 
and  bonds  by  railroad  corporations,  subject  to  the  provisions  of 
the  Act  to  regulate  commerce,  and  the  power  of  Congress  to  regu- 
late or  affect  the  same     *     *     *     " 

1.  Railroad  Securities  and  Interstate  Commerce. 

The  railroad  eoinpanies  of  tlie  United  States,  with  only  one 
important  exception,  owe  their  present  corporate  existence  to 
state  charters  and  are  subject  to  state  laws  regarding  their  issue 
of  stocks  and  bonds.  But  a  large  and  growing  proportion  of  their 
business  is  interstate  commerce,  regulated  by  federal  authority. 
There  is  a  widespread  belief  that  the  rates  charged  on  this  busi- 
ness are  affected  by  the  amount  of  stocks  and  bonds  outstanding; 
that  much  stock  has  been  issued  without  being  fully  paid ;  and 
that  the  dividends  on  this  stock  represent  an  unnecessary  tax  on 
interstate  commerce.  The  railroad  men  as  a  rule  deny  that  the 
amount  of  capital  of  the  roads,  either  nominal  or  actual,  is  seri- 
ously considered  by  their  agents  in  making  rates.  But  it  is  fre- 
quently treated  by  counsel,  commissions  and  courts  as  a  thing  of 
impor^■mce  in  determining  whothcr  rates  are  reasonable.  If  cap- 
italization has  an  actual  effect  on  interstate  rates,  the  federal 
government  is  interested  in  its  control. 

There  is  still  another  way  in  which  the  issue  of  stock  for  less 
than  par  may  affect  the  conduct  of  interstate  commerce.  The 
bondholders  who  loan  money  to  the  corporation  may  be  led  to 
believe  that  there  is  a  real  security  beliind  the  bonds  equal  to 
the  face  value  of  iIk^  stock,  when  in  fact  a  portion  of  this  value 
represents  nothing  more  substantial  than  the  expectation  of  the 
promoters.  So  far  as  this  deception  afi'ects  only  the  individual 
bondliolder.  we  may  leave  it  to  state  law  to  protect  him.  But  if 
sucli  deceptions  become  prevalent  they  inevitably  affect  the  con- 
fidence of  investors  as  a  body,  and  our  American  railroad  systems 
fail  to  get  the  full  amount  of  capital  needed  for  their  develop- 
ment and  for  the  proper  conduct  of  their  interstate  business.    It 

[675] 


676  APPENDIX. 

is  a  matter  of  direct  concern  to  the  federal  government  that  the 
facilities  for  handling  commerce  between  tlie  states  slionld  not 
be  impaired. 

These  facilities  embrace  not  only  steam  railroads,  but  the 
other  agencies  of  communication  and  transportation  enumerated 
in  the  Act  to  regulate  commerce.  While,  for  brevity,  the  lan- 
guage of  this  report  is  largely  confined  to  railroads  the  discus- 
sion and  recommendations  apply  generally  to  these  other  agen- 
cies. 

2.  Present  Requirements  and  Future  Policy. 

Starting  from  different  points,  investors  and  shippers,  and 
through  them  the  general  public,  have  come  to  feel  that  state 
legislation  has  provided  inadequate  security  for  their  interests  in 
this  matter.  The  question  is  therefore  asked  with  increasing 
frequency  whether  the  United  States  Government  should  not  un- 
dertake to  regulate  the  issues  of  securities  by  the  roads  engaged 
in  interstate  commerce  as  a  necessary  means  to  its  effective  con- 
trol. This  question  naturally  divides  itself  into  two  parts: 
First,  what  immediate  action  by  Congress  will  best  meet  the  ex- 
isting situation;  and  second,  what  general  principles  should 
guide  the  federal  government  in  its  future  legislation  on  this 
subject. 

As  far  as  concerns  the  immediate  action  of  Congress,  we  believe 
that  stringent  provisions  regarding  publicity  of  stock  and  bond 
issues,  which  will  show  how  far  the  laws  are  obeyed,  and  will  en- 
able the  federal  government  to  hold  the  railroad  officials  responsi- 
ble for  the  consequences  of  not  obeying  them,  will  be  more  salu- 
tary and  more  effective  than  any  new  statutory  demands.  So 
long  as  the  railways  engaged  in  interstate  commerce  are  char- 
tered by  the  states  and  subject  to  state  laws  regarding  their  se- 
curities added  federal  restriction  will  tend  to  create  further 
confusion  in  a  situation  already  too  complex. 

But  we  also  believe  that  the  time  is  near  when  the  difficulties 
of  the  present  system  of  dual  control  and  the  conflict  of  state 
laws,  will  become  so  manifest  that  further  legislation  on  the  sub- 
ject will  be  imperative.  Unless  the  constitutional  power  of  Con- 
gress to  regulate  the  securities  of  railroads  engaged  in  interstate 
commerce  is  definitely  established  as  being  exclusive  of  State  con- 
trol, to  the  extent  that  Congress  acts  upon  the  subject  one  of  two 
things  seems  likely  to  happen:  Either  the  federal  government 
and  the  governments  of  the  several  states  will  come  to  a  common 
understanding  as  to  the  principles  to  be  adopted  in  the  control 
of  security  issues  or  the  railroad  systems  will  be  given  the  op- 
portunity to  exchange  their  State  charters  for  Federal  ones. 
We  have  therefore  discussed  in  some  detail  the  principles  which 
ought  to  govern  the  stock  and  bond  issues  of  railroads  in  the 
United  States.     Whichever  alternative  we  adopt,  we  ought  to 


NATIONAL   SECURITIES   COMMISSION    REPORT.  677 

have  such  a  scl  of  pi'iiK-iplrs  Ix^foro  us.  Tf  wl-  ar-c  to  brinp:  about 
a  common  uiulcrstandinfr,  wo  need  them  as  a  basis  of  negotiation. 
If  W(!  consider  federal  incoi'iioivition  cd"  i-ail roads  tlie  more  desir- 
able or  practicable  alternative,  we  need  them  as  the  ^ound  work 
of  u  federal  incorporation  law,  of  which  our  roads  may  avail 
themselves  when  their  interests  and  those  of  the  public  require  it. 
Under  the  tei'ms  of  the  Act  of  Congress  creating  this  Commis- 
eion,  it  has  not  considered  as  an  alternative  to  these  possibilities, 
the  direct  ownership  of  the  railroads  by  the  government  itself. 
In  that  case  the  government  woidd  issue  its  own  securities,  and 
none  of  the  questions  submitted  to  this  Commission  would  then 
arise. 

3.  Theory  of  Railroad  Stock  Issues. 

Every  one  knows  that  railroad  securities  are  di\4ded  into  two 
classes,  stocks  and  bonds;  very  few  people  appreliend  as  plainly 
as  they  should  the  distinction  between  the  two,  or  understand 
the  real  nature  of  a  share  of  railroad  stock.  As  to  the  real  nature 
of  a  railroad  bond,  there  is  no  doubt  at  all.  It  is  essentially  a 
note  made  by  the  company ;  a  promise  to  pay  a  certain  amount  of 
money,  say  one  thousand  dollars,  at  a  specific  date  of  maturity, 
and  to  pay  interest  at  specified  rates  in  the  mean  time.  The  ob- 
ligation is  definite.  The  valui?  is  limited  by  the  terms  of  the  in- 
strument. 

But  a  share  of  railroad  stock  is  of  a  different,  and  more  com- 
plex character.  It  represents  two  things  instead  of  one :  That  a 
certain  sum  has  been  paid  in,  and  that  the  holder  of  the  stock  has 
a  certain  sltarr  in  the  ownership  of  the  property,  whatever  that 
may  prove  to  be.  The  second  of  these  things  is  what  ultimately 
gives  it  its  value.  In  the  case  of  a  railroad  bond  the  fact  that  it 
calls  for  one  hundred  or  one  thousand  dollars  is  a  determining 
factor  in  what  it  is  worth.  But  in  the  case  of  stock,  the  fact  that 
the  certificate  represents  one  hundred  or  one  thousand  dollars  is 
far  from  being  the  determiiiing  factor.  It  is  but  one  incident 
among  many.  Even  in  theory  it  purports  merely  to  show  that 
this  was  the  amount  originally  paid  by  the  subscriber  when  the 
road  was  built.  It  does  not  create  an  obligation  to  pay  its  face 
value,  nor  does  that  face  repres;^nt  its  money  value  as  a  share. 
The  value  varies  with  the  development  of  the  property  as  a  whole. 
If  it  has  been  wisely  located  and  well  mana<a"ed  it  will  be  worth 
more  than  the  amount  it  represents.  If  it  has  been  unwisely  lo- 
cated or  badly  managed  it  will  be  worth  less  than  the  an\ount  it 
represeuts.  The  shareholder  chose  his  investment,  elected  his 
manao-ement  and  took  his  risks.  Tf  he  acted  unwiselv  and  fared 
badlv  he  lirs  no  claim  that  the  public  should  indemnify  him.  If 
he  did  well,  the  public  onn  not  either  rightly  or  Avisely  fail  to  rec- 
ognize and  reward  his  foresiixht.  so  long  as  his  road  is  manacred 
with  proper  recrard  to  the  interest  of  the  eonuuunity  and  for  the 
flevelopment  of  the  traffic  which  it  carries. 


678  APPENDIX. 

The  principal  of  a  bond  is  a  fixed  sum,  its  interest  a  fixed 
charge.  The  value  of  a  share  of  stock  is  essentially  variable,  its 
profit  essentially  indeterminate. 

There  is  a  persistent  tendency  to  ignore  this  distinction;  to 
emphasize  unduly  the  face  value  of  the  stock ;  to  treat  the  shares 
in  a  railroad  or  other  public  service  corporation  as  claims  against 
the  community  for  the  number  of  dollars  they  represent  rather 
than  as  fractional  interests  in  a  more  or  less  hazardous  enter- 
prise, in  which  the  investors  took  risks  of  loss  and  chances  of 
profit ;  to  allow  corporations  to  claim  immunity  from  public 
regulation  when  the  dividend  on  the  face  value  of  the  shares  is 
below  the  prevailing  rate  of  interest;  and  to  subject  them  to  vex- 
atious attacks  when  this  dividend  is  above  the  prevailing  rate 
of  interest,  even  when  such  profit  may  be  a  fair  compensation  for 
risks  actually  incurred  in  the  past  or  a  necessary  incentive  for 
the  investment  of  new  capital  and  the  taking  of  new  risks  in  the 
future. 

4.  State  Legislation  Regarding  Stock  Issues. 

Nowhere  has  this  tendency  been  more  marked  than  in  the  legis- 
lation of  the  several  states  regarding  stock  issues  of  railroad  cor- 
porations. It  has  led  our  law  makers  to  lay  too  much  stress  on 
keeping  down  the  nominal  amount  ci  stock  and  too  little  upon 
getting  the  actual  amount  of  capital  needed  and  having  it 
properly  used. 

Nearly  all  the  states  require  that  railroad  stock  issues  shall  be 
paid  in  full  at  their  face  or  par  value.  Eighteen  have  this  pro- 
vision in  their  constitutions;  a  majority  of  the  others  have  more 
or  less  definite  laws  to  the  same  effect.  Even  without  such  spe- 
cific statute  the  requirement  that  the  shareholder  may  be  called 
upon  to  meet  the  full  value  of  his  s'oek  subscription  is  operative 
in  the  absence  of  legislation  to  the  contrary.  Of  such  legislation 
there  has  been  relatively  little.  "West  Virginia  alone,  ,.  uong 
all  the  states  expressly  sanctions  the  issuance  of  stock  at  less  than 
par,  although  there  are  several  others  where  exceptions  to  the 
rule  of  full  payment  have  been  allowed,  either  by  general  statute 
or  by  special  act  of  the  legislature  in  particular  cases. 

5.  Evasion  of  State  Laws. 

"Where  the  strictness  of  the  law  regarding  capital  stock  "has 
interfered  with  the  building  of  railroads  in  new  communities, 
evasions  of  its  letter  or  spirit  by  railroad  companies  have  been 
frequent.  The  very  rigidity  of  the  statute  has  caused  the  public 
to  be  neerligent  in  its  enforcement.  In  some  cases  the  laws  have 
been  so  drawn  as  actually  to  invite  evasion,  by  specifically  leaving 
it  to  the  judgment  of  the  directors  to  decide  what  constituted  an 
adequate  consideration  for  the  shares.  The  companies  have 
thus  been  enabled  to  represent  that  their  stock  was  fully  paid,. 


NATIONAL   SECUEITIES    COMMISSION    REPORT.  679 

when  this  was  not  in  fact  the  case.  Some  times  stock  has  been  is- 
sued by  the  promoters  of  a  company  to  themselves  as  a  reward 
for  their  services  in  organization  and  mana<?ement.  Some  times 
it  has  been  issued  in  exchange  for  rights  of  way  and  other  forms 
of  assistance  to  the  construction  of  a  new  road,  without  much 
regard  to  the  cash  value  of  the  consideration  received.  Some 
times  it  has  been  issued  to  stockholders  to  represent  the  increased 
value  of  their  i)roperty,  actual  or  prospective,  on  the  theory  that 
such  value  rei)rc'sents  undivided  prolits  which  the  stockholders 
have  not  received  or  do  not  receive  in  cash,  and  are  therefore 
entitled  to  obtain  in  scrip.  Some  times  it  has  been  issued  in 
reorganizations,  consolidations,  or  in  exchange  for  the  stock  of 
other  companies,  on  terms  not  really  warranted  by  the  facts  in 
the  case.  Some  times  stock  so  issued  as  full  paid  has  been  given 
as  a  bonus  to  induce  people  to  subscribe  for  bonds. 

Besides  these  direct  methods  of  evasion,  there  have  been  more 
indirect  means  of  reaching  the  same  result.  Lines  have  been 
built  through  the  agency  of  construction  companies  and  paid  for 
by  the  issue  of  securities  whose  face  value  considerably  exceeded 
the  actual  cost  of  the  roads  themselves. 

All  these  pratices,  with  the  possible  exception  of  the  one  last 
named,  have  been  much  more  frequent  in  the  past — particularly 
during  the  great  periods  of  railroad  expansion  from  1853-57, 
1869-72.  1879-82 — than  they  have  been  in  recent  years.  This 
change  is  not  wholly  due  to  increased  stringency  in  the  laws.  It 
is  partly  due  to  wise  administrative  measures  for  their  enforce- 
ment, and  partly  to  the  increased  demands  of  investors  in  bonds 
for  the  real  data  as  to  the  security  underlying  them,  which  has 
compelled  managers  of  corporations  to  give  greater  publicity  as 
to  the  real  facts.  The  Chicago  &  Alton  reorganization  is  the  only 
instance  in  the  last  decade  which  has  been  brought  to  our  cogniz- 
ance where  the  public  has  been  offered  a  large  issue  of  rail- 
road stock  (as  distinct  from  the  stock  of  a  holding  company), 
based  merely  upon  an  estimated  increase  of  value.  Eecent  at- 
tempts to  capitalize  expected  profits  in  connection  with  other 
public  service  corporations  or  with  industrials,  do  not  come 
■uithin  the  scope  of  this  inquiry. 

6.  Danger  of  Evasion  of  Federal  Law. 

A  federal  law  requiring  full  payment  of  all  stock  issues,  with- 
out special  machinery  to  enforce  it,  could  be  evaded  as  state 
laws  have  been  evaded  in  the  past.  In  fact,  the  liability  to 
evasion  might  be  greater  because  in  some  parts  of  the  country  a 
statutory  requirement  of  this  kind,  imposed  by  the  federal  gov- 
ernment, would  be  regarded  as  an  interference  with  the  rights 
of  the  several  states;  and  local  companies  attempting  to  build 
new  lines  with  stock  not  fully  paid  might  have  the  support  of 
local  public  sentiment  in  so  doing.     It  is  possible  that  in  some 


680  APPENDIX. 

instances  the  federal  government  could  not  even  count  upon  the 
vigorous  assistance  of  the  state  authorities  themselves  in  trying 
to  enforce  such  an  act  at  all  rigidly.  Such  a  federal  require- 
ment superadded  to  the  state  refiuirement  might  simply  mean 
that  every  company  would  be  led  to  make  two  deceptive  returns 
instead  of  one.  A  federal  requirement  conflicting  with  a  state 
requirement  might  leave  us  in  an  even  worse  case ;  for  the  impos- 
sibility of  obeying  both  authorities  would  be  made  an  excuse  for 
obeying  neither.  This  would  clearly  be  true  until  the  para- 
mount authority  of  the  federal  government  was  established. 

7.  Enforced  Uniformity  not  yet  Attainable. 

To  make  legislation  of  this  kind  effective,  it  would  be  neces- 
sary to  provide  federal  agencies  for  carrying  out  its  requirements 
in  detail.  We  should  be  compelled  either  to  burden  the  Inter- 
state Commerce  Commission  with  a  large  amount  of  additional 
work,  or  to  create  a  new  commission  to  supervise  railroad  incor- 
poration and  construction  in  different  parts  of  the  country. 

If  we  were  ready  to  substitute  exclusive  federal  control 
for  the  jurisdiction  of  the  several  states  over  their  railroad  cor- 
porations, much  could  be  said  in  behalf  of  the  establishment  of 
a  national  authority  to  supervise  both  the  issuance  of  stocks  and 
bonds  and  the  actual  expenditure  of  their  proceeds.  But,  apart 
from  the  constitutional  difficulties  which  might  stand  in  the  way 
of  such  a  procedure,  your  Commission  is  of  opinion  that,  as  a 
mere  matter  of  expediency,  the  time  is  not  ripe  for  any  such 
immediate  or  forcible  transfer  of  jurisdiction.  The  local  needs  of 
different  parts  of  the  country  are  still  divergent.  INIany  railroad 
problems,  both  of  operation  and  of  control,  are  still  in  the  ex- 
perimental stage.  Enforced  uniformity  under  federal  law  would, 
in  the  opinion  of  many,  discriminate  against  the  development  of 
new  territory  and  the  formation  of  independent  companies,  for 
a  well  established  system  has  less  difficulty  in  securing  the  neces- 
sary capital  by  pledging  its  credit  than  an  independent  projector 
wishing  to  develop  a  new  district.  These  dangers  and  difficulties 
may  have  been  somewhat  exaggerated.  While  they  undoubtedly 
exist  in  certain  cases,  they  are  of  a  sporadic,  rather  than  a  gen- 
eral, character.  But  they  are  urged  with  much  force,  both  by 
state  railroad  commissioners  and  by  independent  builders;  and 
they  would  constitute  obstacles  to  the  effective  enforcement  of 
a  federal  statute.  Before  such  a  statute  is  enacted,  it  should  be 
clearer  than  it  now  is  that  public  opinion  would  support  it 
Under  such  circumstances  the  immediate  assertion  of  exclusive 
federal  jurisdiction  under  one  general  railroad  law  appears 
unwise. 

Until  such  exclusive  jurisdiction  can  be  established,  the  crea- 
tion of  a  separate  administrative  body  subjecting  the  railroads 
of  the  country  to  a  new  system  of  concurrent  supervision,  in  ad- 


NATIONAL   SECURITIES   COMMISSION    REl'OKT.  681 

dition  to  the  many  old  ones  whicli  now  exist,  does  not  seeiu  just, 
expedient  or  economical. 

8.  Enforced  Publicity  Immediately  Needed. 

in  place  ol'  any  added  federal  re'iiiireiaents  concerninj?  pay- 
ment for  capital  stock,  your  Commission  recommends  the  adop- 
tion of  provisions  regarding  publicity  which  will  show  the  act- 
ual facts  regarding  stock  and  bond  issues  in  the  several  states, 
and  the  consideration  received  there  For.  Any  railroad  doing 
interstate  business  which  issues  bonds  or  stocks  shouhl  be  re- 
quired by  statute  to  furnish  the  Interstate  Commerce  Commis- 
sion at  the  time  of  the  issue  with  a  full  statement  of  the  de- 
tails of  the  issue,  the  amount  of  the  proceeds,  and  tlie  purposes 
for  which  the  proceeds  are  to  be  used,  followed  in  due  time  by 
an  accounting  for  such  proceeds,  as  more  fully  hereinafter  set 
forth.  • 

An  Act  of  this  kind  does  not  limit  the  freedom  of  the  several 
states  to  make  any  kind  of  laws  which  they  please  regarding 
their  own  corporations.  If  they  want  them  stringent  they  may 
make  them  stringent.  If  they  think  they  can  encourage  the 
investment  of  capital  by  permitting  tlio  issue  of  stock  for  less 
than  par,  they  can  allow  such  issues.  If  the  result  of  enforcing 
existing  laws  interferes  with  local  needs,  they  may  change  the 
laws,  but  the  companies  must  indicate  precisely  what  they  are 
doing.  They  must  not  attract  the  bondliolders'  money  by  repre- 
senting that  there  has  been  a  payment  of  one  hundred  cents 
when  there  has  only  been  a  payment  of  fifty  cents.  They  may, 
if  they  please,  direct  the  treasurer  to  set  down  tlieir  partly  paid 
stock  in  the  balance  sheet  as  a  liability  in  full;  but  they  must 
make  it  plain  to  the  investor  today  and  to  the  public  tomorrow 
how  much  of  that  liability  was  represented  by  cash  assets  con- 
tributed and  how  mucli  consisted  of  what  is  called  in  English 
balance  sheets  nominal  additions  to  capital.  Such  liability  is  of 
the  corporation  to  its  stockholders  and  not  of  the  public  to 
either. 

9.  Mode  of  Procedure. 

Two  courses  lie  open  before  us  in  our  effort  to  secure  publicity 
regarding  railroad  securities:  Either  to  require  the  express  sanc- 
tion of  some  administrative  body  (presumably  the  Interstate 
Commerce  Conmiission")  before  such  securities  are  issued,  or  to 
rely  on  general  statutory  provisions  under  which  the  directors 
may  issue  such  securities  and  be  held  responsible  for  their  proper 
use.  In  the  case  of  either  of  these  alternatives  the  accounting 
required  must  be  full  and  adequate  in  ever^--  respect,  and  the 
Interstate  Commerce  Commission  or  other  administrative  author- 
ity must  be  empowered  to  do  whatever  may  W.  necessary  in  its 
n'udgment  to  secure  compliance  with  the  statute  and  to  prevent 


682  APPENDIX. 

injury  to  the  public.  Either  alternative  would  involve  the  valua- 
tion of  property  and  services  whenever  such  valuation  may  be- 
come necessary  in  establishing  the  integrity  of  the  financial  trans- 
actions involved. 

The  first  alternative  insures  reasonably  full  publicity  before  the 
fact.  Official  inquiry  following  the  formal  application  would 
tend  to  discourage  attempts  at  evasion ;  and  would  probably  in 
many  instances  prevent  the  filing  of  applications  for  issues 
which  are  questionable  either  because  of  their  financial  unsound- 
ness or  because  they  duplicate  existing  lines  instead  of  adding  to 
public  convenience. 

Your  Commission  nevertheless  prefers  the  second  alternative 
and  doubts  the  expediencj^  under  present  conditions  of  a  gen- 
eral law  forbidding  railroads  to  sell  securities  without  specific 
authorization  in  advance,  it  being  understood  that  the  face  value 
of  these  securities  is  not  to  be  construed  as  an  obligation  on  the 
public.  Authorization  in  advance  would  tend  to  create  an  im- 
pression on  the  part  of  the  investing  public  of  a  guaranty  or  offi- 
cial recognition  of  values,  which  no  administrative  authority  can 
safely  give.  The  absence  of  such  recommendation  by  this  Commis- 
sion is  intended  to  make  it  clear  that  no  such  guaranty  or  official 
recognition  is  to  be  given.  A  growing  railroad  has  constant  need 
of  money,  and  its  officers  and  directors  are  the  best  judges  of  thii 
amount  of  its  annual  requirements.  It  is  manifestly  to  the  inter- 
est of  the  company  and  of  the  public  that  a  road  should  get  its 
money  as  cheaply  as  it  can.  The  policy  of  allowing  a  floating 
debt  to  accumulate  with  a  view  to  its  extinction  by  tlie  sale  of 
permanent  securities  upon  the  completion  of  its  improvements  is 
not  a  good  one.  and  should  be  avoided  whenever  possil)le.  An  ad- 
ministrative body  where  approval  was  required  in  advance  for  the 
sale  of  securities  would  have  great  difficulty  in  always  acting 
promptly  enough  to  enable  the  roads  to  avail  themselves  of  favor- 
able money  markets  and  avoid  the  creation  of  floating  debt,  and 
might  do  its  work  so  carelessly  as  to  result  in  shielding  the  di- 
rectors from  responsibility,  instead  of  acting  as  a  safeguard  to 
the  public. 

We  are  disposed  to  leave  for  the  present  to  state  commissions 
the  responsibility  of  passing  upon  the  questions  of  public  con- 
venience and  necessity  involved  in  the  building  of  lines  to  be 
constructed  within  the  limits  of  their  several  states,  and  to  rely 
on  full  publicity  as  to  the  use  of  the  proceeds  of  the  sale  of  se- 
cnrities  and  of  other  assets  as  a  safeguard  against  financial 
abuses. 

10.  Facts  to  be  Disclosed. 

"With  this  end  in  view,  every  company  should  be  required  to 
furnish  to  the  Interstate  Commerce  Commission  at  specified 
dates,  a  full  statement  including  the  names  of  the  parties  con- 


NATIONAL   fcJECURlTlES   COMMISSION    REPORT.  683 

cernod,  of  all  liii;ai<ial  transactions  that  have  taken  plai-e  duriui,' 
the  periods  covered  by  the  rei)ort,  whether  in  cash,  in  securities. 
or  in  other  valuable  considerations,  and  whether  embraced  in  in- 
come account  or  outside  of  it.  This  statement  should  also  include 
the  disposition  of  surplus.  Every  company  should  lie  further 
required  to  compile  for  the  information  of  its  shareholders  facts 
in  regard  to  the  financial  transactions  of  the  company  for  its 
fiscal  year,  of  such  a.  character  and  in  such  form  as  the  Interstate 
Commerce  Commission  may  direct. 

The  Interstate  Commerce  Commission  should  have  the  power 
to  investigate  all  such  financial  ti-ansactions,  and  to  intpdre  into 
the  bona  fides  thereof;  the  right  to  call  for  the  production  of 
books  and  papers  of  railroad  companies,  construction  companies 
or  other  companies  with  which  the  railroad  company  shall  luive 
had  financial  transactions  for  the  purpose  of  enablinsr  it  to  verify 
any  statements  furnished  to  it;  and  the  power  to  examine  into  the 
actual  cost  as  well  as  the  value  of  property  ac(puied  or  of  serv- 
ices rendered.  In  all  transactions  investigated,  from  the  pur- 
chase of  supplies  to  the  acquirement  of  new  lines  by  consolida- 
tion, every  interest  of  the  directors  should  be  disclosed,  and  ade- 
quate penalties  provided  for  any  failure  to  make  such  disclosure. 

This  enumeration  is  illustrative  and  not  inclusive.  Some  of 
these  items  the  Interstate  Commerce  Commission  now  requires  in 
the  reports  of  the  companies;  other  items  are  not  now  required 
and  probably  cannot  be  under  the  present  Act  to  regulate  com- 
merce. All  of  them  call  for  facts  or  groups  of  facts  which  the  In- 
terstate Commerce  Commission  should  be  empowered  to  ascertain 
in  the  administration  of  an  Act,  such  as  the  one  we  have  prepared 
and  submit  herewith  as  a  suggestion. 

11.  Physical  Valuation. 

"Physical  valuation"  of  railroads  in  its  bearing  on  capitaliza- 
tion has  been  to  some  extent  advocated  and  to  a  greater  extent  op- 
posed from  the  idea  that,  if  undertaken  by  the  Fnited  States  gov- 
ernment it  will  be  a  justification  for  reducing  the  amount  of  the 
outstanding  securities  of  the  railroads  to  the  figure  thus  ascer- 
tained, or  for  preventing  them  from  issuing  new  securities  when 
the  amount  of  their  outstanding  stocks  and  bonds  exceeds  the 
physical  value  of  their  properties  as  so  determined.  Should  a 
valuation  of  the  physical  railroads  be  made,  it  ought  not.  if 
properly  applied,  involve  either  of  those  daileers. 

An  attempt  to  scale  down  old  securities  is  clearly  out  of  the 
question.  Apart  from  the  obvious  constitutional  difficulties  of 
such  a  course,  considerations  of  public  exi^ediency  of  themselves 
forbid  it.  The  direct  loss  from  the  unsettleraent  of  legal  and 
equitable  relations  would  be  very  great.  Th(^  indirect  loss  from 
the  withdrawal  of  confidence  in  American  railroad  investments 
would   be   immeasurable.      Such  a  readjustment  would   become 


684  APPENDIX. 

areliaic  almost  from  the  outset,  because  an  adjustment  of  securi- 
ties based  upon  the  values  of  today  might  be  totally  erroneous  to- 
morrow. It  would  be  equally  inadvisable,  in  cases  where  out- 
standing secimties  were  in  excess  of  the  physical  valuation,  to 
prohibit  the  issue  of  new  securities  until  physical  valuation  had 
become  equal  to  the  amount  of  securities  outstanding  because 
this  principle,  if  generally  applied,  would  prevent  roads  so  situ- 
ated from  securing  the  capital  needed  for  the  service  of  the  com- 
munity. 

"Whenever  a  railroad  company  acquires  new  property  in  return 
for  the  issue  of  its  securities,  or  in  expending  the  proceeds  of  sucli 
securities,  every  means  should  be  placed  at  the  disposal  of  the 
Interstate  Commerce  Commission  to  ascertain  the  value  of  such 
property  as  accurately  as  possible.  A  fundamental,  though  not 
necessarily  a  controlling,  element  in  value,  is  cost  of  reproduction. 
This  is  true  of  property  in  general;  it  has  been  specifically  af- 
firmed of  railroad  property  by  the  Supreme  Court  of  the  United 
States.  Eminent  railroad  men  who  have  appeared  before  this 
Commission  have  stated  that  in  their  opinion  cost  of  reproduc- 
tion or  physical  valuation  was  the  most  important  single  element 
in  determining  the  true  value  of  the  railroad  as  a  whole.  In- 
deed, we  believe  it  to  be  in  the  interest  of  railroads,  no  less  than 
of  those  who  use  them,  that  the  Interstate  Commerce  Commission 
should  be  given  broad  powers  and  adequate  means  for  valuation 
of  the  physical  property  of  railroads  as  one  element  in  determin- 
ing fair  value,  whenever  in  the  judgment  of  the  Commission  this 
is  of  sufficient  importance  to  warrant  such  action.  This  will  give 
the  public  information  which  it  is  entitled  to  demand,  and  which 
can.  in  our  judgment,  be  better  and  more  economically  obtained 
in  this  way  than  in  any  other.  The  attempt  to  oppose  a  system  of 
physical  valuation  of  this  kind  tends  to  give  countenance  to  ex- 
aggerated estimates  of  the  amount  of  water  in  railroad  stocks. 

12.  Results  to  be  Expected. 

We  believe  that  the  powers  granted  to  the  Interstate  Commerce 
Commission  by  the  preceding  recommendations  may  be  found 
large  enough  to  protect  the  public,  without  the  necessity  of  pass- 
ing a'  law  that  should  require  specific  approval  in  advance  of  the 
amount  and  purpose  of  stock  and  bond  issues. 

"We  do  not  say  that  the  enforcement  of  a  law  of  this  kind  will  be 
easy.  The  public  in  all  parts  of  the  country  has  become  accus- 
tomed to  the  evasion  of  law^s  concerning  capital  stock.  It  is  far 
easier  to  pass  a  radical  measure  which  is  going  to  be  evaded  than 
to  secure  obedience  to  a  conservative  one.  But  we  are  confident 
that  full  public  knowledge  of  the  facts  will  diminish  the  evils  and 
misunderstandings  described  in  the  opening  paragraphs  of  this 
report  as  being-  the  chief  sources  of  the  demand  for  immediate 
federal  action,  and  will  at  the  same  time  furnish  the  proper 
foundation  on  which  to  base  more  thorough-going  reforms. 


NATIONAL   SECURITIES   COMMI.SSION    REPORT.  685 

One  of  tlu'se  evils  was  that  bondholders  were;  at  times  dehided 
into  the  helid"  that  Ihcj-e  was  a  sci-iii'ity  lieliind  their  bonds  which 
did  not  exist,  and  that  the  railroad  company  was  mortf^afdnj?  a 
piece  of  property  when  it  was  only  capitalizing  an  expectation. 
They  thus  entrusted  the  control  of  their  money  to  men  who  had 
comparatively  little  at  stake.  If  a  profit  was  made  the  promoters 
could  approi)riate  it;  if  money  was  lost,  the  loss  fell  on  the  bond- 
holders. Roads  built  larp:ely  with  borrowed  capital  at  the  l)e- 
ginnin<;  have  been  prevented  from  subsequently  obtaining;  the 
credit  which  they  might  otherwise  command.  They  have  tliere- 
fore  been  less  able  to  give  to  the  shippers  or  to  the  travelers  the 
facilities  which  are  requisite  no  less  for  the  convenience  and 
safety  of  the  public  than  for  the  profitable  utilization  of  the  rail- 
road itself.  To  the  extent  that  we  lessen  debt,  we  shall  increase 
the  power  of  the  roads  to  raise  money  when  the  public  needs 
added  facilities  and  shall  at  the  same  time  reduce  the  chance  of 
default  and  lessen  the  severity  of  conmiercial  crises. 

But  to  most  people  the  danger  of  these  financial  consequences 
seems  a  less  serious  thing  than  the  danger  that  the  railroads  will 
tax  the  users  of  the  road  for  the  sake  of  making  profits  on  capital 
not  actually  furnished.  The  necessity  for  paying  interest  on 
bonds  and  the  desirability  of  providing  for  dividends  on  stock  are 
some  times  urged  as  a  justification  for  the  increased  rates;  and 
they  are  fre(|uently  put  forward  as  a  reason  why  existing  rates 
may  not  fairly  be  interfered  with  by  law.  To  meet  this  danger, 
so  far  as  it  is  a  real  one,  and  to  avoid  this  misapprehension  so  far 
as  it  is  a  misapprehension,  it  is  essential  that  the  stock  should  be 
what  it  purports  to  be.  If  it  purports  to  represent  one  hundred 
dollars  paid  in  on  every  share,  one  hundred  dollars  sho^i'd  ac- 
tually be  paid  in.  If  it  purports  only  to  be  a  participation  cer- 
tificate giving  a  proportionate  interest  in  any  profits  that  may 
be  earned,  it  must  be  understood  that  this  is  its  essential  charac- 
ter, and  that  if  it  claims  any  further  rights  than  this,  it  must 
prove  them  by  specific  evidence.  This  is  in  the  interest  of  all 
parties — of  the  honest  investor  and  of  the  prosfressive  manager, 
of  the  shipper,  the  traveler  and  the  general  public. 

If  full  publicity  be  given  to  the  real  facts,  we  shall  al<50  lessen 
the  fraiululent  creation  of  debt.  It  is  the  degree  of  publirity  as  to 
facts,  rather  than  the  sfr-inffency  of  the  law,  which  gives  the  peo- 
ple any  real  protection.  A  stringent  law  inadequately  enforced 
and  secretly  evaded,  is  the  worst  thinir  that  can  possibly  be  oTered 
the  public,  because  it  gives  color  to  claims  which  have  no  founda- 
tion in  fai^t. 

13.  Conflicts  of  Jurisdiction. 

Ti'hile  we  do  not  think  that  the  time  is  ripe  for  a  sudden  and 
quasi-compulsory  transfer  of  the  direct  control  of  the  stock  and 
bond  issues  of  interstate  railroads  from  the  states  to  the  federal 


686  APPENDIX. 

government,  we  cannot  help  recognizing  that  there  are  conflicts  of 
jurisdiction  in  the  construction,  operation  and  financing  of  inter- 
state railroads  which  may  more  and  more  embarrass  interstate 
commerce  and  necessitate  a  larger  degree  of  federal  control,  or 
even  result  in  federal  incorporation. 

A  road  organized  by  an  individual  state  is  subject  to  state 
jurisdiction  regarding  certain  rates  and  facilities  and  purposes 
for  which  securities  may  be  issued,  and  is  responsible  to  the  state 
courts  for  the  performance  of  its  functions.  The  instant  that  its 
cars  or  that  its  shipments  pass  across  the  state  line  or  are  routed 
to  points  in  other  states,  it  becomes  responsible  to  the  Interstate 
Commerce  Conunission  and  to  the  federal  courts.  Constitution- 
ally Congress  has  paramount  authority  over  interstate  commerce 
and  bj^  its  action  can  abrogate  any  previous  action  of  the  states 
which  may  prove  inconsistent  therewith.  Practically  it  is  easy  to 
see  how  a  conflict  may  arise  between  local  and  national  require- 
ments regarding  facilities  or  methods.  The  state  may  prescribe 
one  way  of  doing  business;  the  national  government  may  pre- 
scribe another,  and  forbid  the  one  ordered  by  the  state.  It  is 
only  by  the  care  of  our  railroad  commissioners,  state  and  national 
that  serious  difficulties  of  this  kind  have  been  avoided  in  the  past. 

Even  more  perplexing  are  the  questions  which  may  arise  in 
connection  with  the  control  of  interstate  railroad  rates.  The 
local  legislatures  and  commissions  have  ideas  of  their  own  regard- 
ing rates  which  may  differ  in  some  respects  from  the  ideas  of 
Congress  or  of  the  Interstate  Commerce  Commission.  But  the 
relation  between  through  and  local  rates  is  frequently  so  close 
that  the  two  sets  of  things  cannot  be  arranged  on  independent 
principles.  The  reasonableness  of  the  through  rate  may  depend 
upon  its  relation  to  the  local  rate,  and  vice  versa.  It  becomes  in- 
creasingly difficult  each  year  to  leave  a  corporation  free  to  fix  its 
local  rates  subject  to  the  jurisdiction  of  state  commissions  and 
state  courts  only. 

Thus  the  exercise  by  a  state  of  its  authority  OA^er  railroads  or- 
ganized or  operating  in  its  territory,  prescribing  terms  on  which, 
and  the  limitations  within  which,  it  may  issue  securities,  may  di- 
rectly interfere  with  and  embarrass  interstate  commerce,  when 
the  issue  of  such  securities  is  essential  for  raising  funds  to  be  ap- 
])lied  in  furnishing  the  necessary  facilities  for  its  interstate  traf- 
fic. One  or  more  instances  of  this  have  been  brought  to  our  atten- 
tion. That  they  have  not  been  more  numerous  is  doubtless  owinor 
to  the  discretion  and  conservatism  which  have  usually  character 
ized  the  action  of  state  commissions.  Such  state  regulation  of  the 
security  issues  of  interstate  railroads  may  be  wise  or  unwise  from 
a  local  point  of  view;  but  the  state  determination  cannot  control 
the  federal  right.  This  danger  of  possible  interference  with  in- 
terstate commerce  necessarily  tends  to  increase  with  the  number 
and  activity  of  state  commissions;  and  it  was  for  the  protection  of 


NATIONAL   SECURITIES    COMMISSION    REPORT,  G87 

such  commerce  against  an^-  intcrl'cn'iice  that  the  power  of  rejjula- 
tion  was  vested  in  the  federal  governineut. 

14.  Development  by  Intercorporate  Holding. 

Some  states  have  laws  compelling  railroads  within  their  bor- 
ders to  be  organized  under  the  laws  of  the  states  in  which  they 
are  located  and  forbidding  foreign  corporations,  so-called,  from 
constructing,  owning  and  oi)erating  lines  thus  located.  The  efl'ect 
of  these  and  other  similar  statutes  has  been  largely  avoided  by  a 
system  of  intercorporate  holdings,  under  which  a  corporation  or- 
ganized in  one  state  which  owns  the  stock  or  the  major  pavt  of 
the  stock  of  a  road  in  another  state  can  secure  the  capital  neces- 
sary for  construction  or  betterment  without  subjecting  itself  to 
the  restrictive  laws  of  the  state  where  the  money  is  actually  spent. 
One  or  two  instances  will  show  how  this  system  woi'ks. 

The  state  of  Texas  has  a  law  which  rigidly  limits  the  extent  to 
which  roads  in  that  state  may  be  capitalized.  It  seems  to  have 
been  the  expectation  of  those  who  passed  the  Texas  law  that  it 
would  be  a  pi'oteetion  to  all  those  interested  in  the  proper  opera- 
tion and  regulation  of  railroads.  But  it  has  had  the  practical 
effect  of  making  it  difficult  to  get  directly  by  the  sale  of  securities 
of  railroads  located  in  Texas,  the  necessary  capital  for  their  im- 
provement; because  if  a  road  was  already  capitalized  to  an 
amount  in  excess  of  the  official  valuation  of  the  State  Commission, 
no  further  securities  could  ordinarily  be  placed  upon  the  prop- 
erty for  necessary  improvements,  until  this  deficiency  was  made 
good.  Under  these  circumstances  companies  organized  in  other 
states  which  own  lines  in  Texas  needing  added  investments  of 
capital  in  order  to  handle  their  traffic  in  that  state  economically, 
frequently  resort  to  a  simple  expedient.  Instead  of  issuing  securi- 
ties of  the  Texas  company  they  pledge  the  credit  of  the  paretit 
company  and  put  into  a  collateral  trust  any  hitherto  unpledsrcd 
securities  of  these  Texas  roads  that  they  may  have  in  their  treas- 
ury and  if  they  have  none,  then  other  securities  or  property,  thus 
issuing  under  the  authority  of  another  state  securities  whose  pro- 
ceeds are  to  be  spent  in  Texas. 

When  the  Chicago,  IMilwaukee  and  St.  Paul  Railroad  wished  to 
build  its  Puget  Sound  extension  it  had  to  pass  through  several 
states,  whose  laws  forbade  corporations  chartered  under  laws  of 
other  states  to  build  roads  within  their  borders  except  as  a  con- 
nection or  prolongation  of  a  road  aetually  built  to  the  stnte  line. 
In  order  to  conform  to  these  restrictions,  the  St,  Paul  Road  would 
have  had  to  build  its  line  slowly,  step  by  step,  instead  of  doing 
work  in  several  states  at  once  and  iiuttincr  the  road  through  as 
promptly  as  possible.  To  avoid  this  difficulty  it  had  to  orc:anize 
a  separate  company  to  build  the  road  in  each  state  which  had 
such  a  law.  This  in  itself  was  not  a  serious  evil ;  it  simply  in- 
volved additional  expense,  to  have  separate  corporations  do  things 


688  APPENDIX. 

piecemeal  which  might  have  been  clone  as  a  unit  without  such 
intermediaries.  But  it  tended  to  render  state  control  less  effect- 
ive, instead  of  more  so.  The  system  thus  forced  upon  the  St.  Paul 
Koad  would  give  every  opportunity  for  deception  to  a  road  which 
might  want  to  deceive. 

Where  a  company  builds  its  own  roads,  it  is  possible  to  find 
out  what  they  cost  and  have  the  matter  properly  entered  in  the 
balance  sheet;  but  where  a  corporation  is  artificially  encouraged 
to  divide  itself  into  several  parts,  the  parts  that  do  the  construct- 
ing can  sell  their  finished  roads  to  another  part,  at  an  abnormal 
profit.  This  transaction  may  furnish  the  parent  company  an  ex- 
cuse for  an  over-issue  of  securities.  If  the  securities  thus  over- 
issued are  paid  for  in  full,  it  will  put  a  certain  amount  of  cash 
into  the  treasury  of  the  newly  organized  company  for  which  it 
becomes  very  difficult  to  hold  the  directors  of  the  parent  company 
to  strict  account.  If  they  are  not  fully  paid  for,  it  simply  means 
that  the  alleged  profits  of  the  parent  company  may  be  made  the 
excuse  for  furnishing  its  stockholders,  in  the  shape  of  a  dividend 
payable  in  its  own  stock,  a  number  of  pieces  of  paper  whose  face 
value  is  greater  than  the  amount  actually  contributed. 

15.  Control  by  Intercorporate  Holding. 

Of  the  total  amount  of  railroad  capital  outstanding  on  June 
30,  1910,  $3,952,000,000,  or  more  than  twenty  per  cent  of  the 
whole,  was  held  by  railroad  companies  themselves.  About  one- 
third  of  this  was  bonds,  and  two-thirds  stock.  There  is  also  a 
large  additional  amount  of  railroad  securities  owned  by  various 
"holding  companies,"  which  are  not,  technically  speaking,  rail- 
road corporations,  and  do  not  make  return  of  their  capital  to  the 
Interstate  Commerce  Commission,  but  w^hich  control  the  policy 
and  direct  the  operation  of  the  roads  whose  securities  they  have 
*  purchased.  Any  artificial  stimulus  to  these  intercorporate  hold- 
ings is  a  public  evil.  Where  a  railroad  controls  the  operations  of 
another  railroad  by  owning  a  majority  of  its  stock,  or  where  a 
holding  company  controls  the  operations  of  several  roads  in  the 
same  manner,  we  have  all  the  disadvantages  of  consolidation, 
without  getting  all  of  its  advantages.  We  get  the  centralization 
of  financial  power;  we  do  not  get  all  the  economy  of  operation 
which  should  go  with  it. 

Apart  from  this  general  danger,  we  open  the  way  to  several 
specific  evils. 

Where  a  railroad  controls  the  operations  of  another  road  by 
the  ownership  of  a  maiority  of  its  stock,  there  is  constant  danger 
that  the  minority  holders  will  not  be  fairly  treated.  The  road 
thus  purchased  has  become  part  of  a  large  system,  and  is  operated 
by  the  representatives  of  the  whole  svstem.  It  is  almost  certain 
that  the  advantage  of  the  whole  will  be  preferred  to  the  separate 
interests  of  the  part  in  matters  of  operation,  traffic  and  finance. 


NATIONAL    SECURITIES    COMMISSION    REPORT.  689 

Again,  the  existence  of  two  or  more  companies  uikLi-  the 
same  management,  having  separate  organizations  hut  united  con- 
trol, invites  tiie  conceahnent  of  financial  transactions  hy  the  shift- 
ing of  charges  from  one  company  to  another.  We  hjive  already 
shown  how  this  may  happen  in  the  construction  of  a  new  load. 
It  is  equally  possible  in  the  operation  of  an  old  one. 

16.  Financial  Dangers. 

A  further  effect  of  intercorporate  holdings  is  to  change  con- 
tingent charges  into  fixed  ones.  A  railroad  company  buying  the 
stock  of  another  conii)any  almost  always  issues  collateral  trust  or 
other  bonds  to  pay  for  it ;  in  other  words,  it  puts  the  stocks  into 
its  own  treasury  and  sells  the  bonds  to  the  public.  As  long  as  the 
road  is  prosperous,  this  change  does  little  harm.  In  fact,  it  may 
appear  to  do  good.  When  a  company  has  been  able  to  buy  a  five 
per  cent  stock  by  tlie  issue  of  its  own  four  and  a  half  per  cent 
bonds,  there  is  an  apparent  profit  of  one-half  percent  annually 
on  the  transaction  to  the  company  and  an  apparent  reduction  in 
total  charges  which  it  must  meet.  But  Avith  the  diniiuution  in 
traffic,  the  bad  effect  of  the  change  is  at  once  obvious.  The  in- 
terest on  the  bonds  remains  a  fixed  charge  against  the  company. 
The  effect  of  a  loss  of  dividends  would  have  been  felt  chiefly  by 
the  individual  stockholders.  A  default,  or  even  a  threatened  de- 
fault, of  interest  has  an  effect  on  the  credit  and  confidence  of  the 
country  as  a  whole,  and  may  precipitate  a  financial  crisis. 

The  extent  to  which  the  credit  of  our  railroads  is  being  pledged 
is  evidenced  by  tlic  change  in  the  proportion  of  railroad  stocks 
and  bonds  held  by  the  public.  In  1899  these  Avere  nearlv  e^iual; 
$4,307,000,000  stocks  and  $4,366,000,000  bonds.  Eleven  years 
later  the  figures  given  by  the  statistician  of  the  Interstate  Com- 
merce Commission  were  $5,578,000,000  stocks  and  $8,865,000,- 
000  bonds — a  serious  disproportion.  The  growth  of  intercorpo- 
rate holdings  is  responsible  for  a  considerable  part  of  this  change. 
This  disproportionate  growth  of  fixed  interest-bearing  obligations 
as  compared  with  stock  is  primarily  the  result  of  the  issuance  of 
bonds  in  payment  of  roads  acquired  and  would  still  have  taken 
place  even  if  title  had  been  taken  in  fee  instead  of  throu£rh  stock 
ownership ;  but  the  latter  method,  by  reason  of  its  facility  for 
the  issue  of  collat-eral  trust  bonds,  has  unquestionably  been  an  im- 
portant factor  in  creating  this  disproportion. 

So  long  as  different  parts  of  w-hnt  is  naturnlly  a  conne-ted  sys- 
tem of  railroads  are  chart^^red  by  separate  states,  there  are  likely 
to  be  artificial  obstacles  to  consolidation:  and  while  these  ob- 
stacles exist.  Ave  shall  find  it  difficult  either  to  check  the  tendency 
toward  inci-eased  intercoi-porrite  holdintrs.  or  to  deal  with  the  evils 
incident  thereto.  Each  instance  of  intercorpornte  holdings  thus 
furnishes  an  added  argument  for  federal  charters. 
44 


690  APPENDIX. 

17.  Alternative  Methods. 

lu  the  present  state  of  tlie  law,  there  are  two  distinct  methods 
by  which  we  might  avoid  conflicts  between  the  state  and  federal 
government  in  the  control  of  railroad  stock  and  bond  issues,  and 
deal  with  the  problems  of  construction  and  finance  incident 
thereto. 

One  method  relies  on  a  full  interchange  of  views  between  the 
Interstate  Commerce  Commission  and  the  commissions  of  the  sev- 
eral states,  as  a  means  of  securing  harmony.  If  it  is  possible  for 
the  members  of  all  these  different  bodies  to  arrive  at  a  common 
understanding  on  a  question  of  public  policy,  they  usually  have 
little  trouble  in  getting  the  necessary  authority  from  Congress 
and  the  state  legislatures  to  put  a  consistent  policy  into  effect. 
This  way  of  doing  things  was  illustrated  in  the  legislation  regard- 
ing safety  appliances  a  few  years  ago;  it  is  just  being  illustrated 
in  connection  with  control  of  railroad  accounts  today.  In  each 
of  these  matters  a  great  deal  of  trouble  was  made  by  conflicting 
requirements ;  in  each,  a  full  discussion  of  the  questions  involved 
was  followed  by  a  substantial  agreement  on  the  main  points,  and 
the  good  sense  of  the  several  commissions  prevented  serious  diffi- 
culties from  being  raised  about  minor  ones. 

Whetl>er  we  could  secure  a  similar  agreement  on  matters  of 
finance,  where  the  conflict  of  interest  between  different  localities 
is  more  serious  and  the  differences  of  opinion  more  fundamental, 
is  open  to  doubt. 

If  the  public  interest  of  the  United  States  as  a  whole  should  be 
jeopardized  by  these  differences,  we  can  perhaps  have  recourse  to 
a  Federal  Incorporation  Act,  which  shall  permit  railroads  to  ex- 
change their  state  charters  for  federal  ones.  We  believe  that  such 
an  Act  could  be  so  drawn  as  to  offer  advantages  in  the  conduct  of 
interstate  traffic  without  unduly  conflicting  with  local  interests. 
The  most  important  of  these  advantages  would  be:  (1)  The  right 
to  construct  lines  needed  for  interstate  commerce,  under  proper 
local  supervision,  and  with  proper  regard  for  local  needs,  but 
without  the  agency  of  local  corporate  organizations;  (2)  The 
right  to  have  rates  supervised  by  a  single  authority  which  could 
pay  proper  regard  to  the  mutual  relations  of  local  traffic  and  in- 
terstate traffic,  instead  of  two  separate  authorities  dealing  with 
the  two  things  independently;  (.3)  An  equitable  system  of  taxa- 
tion which  would  distribute  to  the  several  states  their  propor- 
tionate parts  of  taxes  leaded  on  both  the  tangible  and  intangible 
property  of  the  railroad  by  some  harmonious  plan. 

It  is  too  early  to  make  definite  choice  between  these  two  al- 
ternatives. But  it  is  not  too  early  to  indicate  the  principles  which 
should  guide  our  legislation  concerning  stocks  and  bonds  in  either 
event.  For  our  progress  toward  putting  these  principles  into 
effect  wnll  necessarily  be  slow,  by  either  method.  If  we  try  to 
bring  the  views  of  different  legislatures  into  harmony,  the  dis- 


JS'ATloXAL    .SECLUITIES    COMMISSION    REPORT.  C91 

cussion  must  be  deliberate  in  order  to  have  any  chance  of  success. 
If  we  rely  on  permission  to  exchange  state  charters  for  federal 
ones,  we  must  give  both  the  railroads  and  the  states  time  to  learn 
the  wisdom  of  availing  themselves  of  this  opportunity. 

If  in  the  discussion  that  follows  we  have  seemed  to  have  more 
defiiiilcly  in  mind  the  adoption  of  a  federal  charter  than  federal 
control  of  stiite  corporations,  it  is  because  this  method  enables  us 
to  make  our  suggestions  in  clearer  and  more  concrete  shape;  the 
underlying  principles  and  aims  would  be  substantially  the  same 
in  the  two  cases. 

18.  Treatment  of  Existing  Issues. 

Whatever  alternative  we  adopt,  any  disturbance  but  a  volun- 
tary one  of  the  existing  amounts  or  status  of  bonds  or  stocks 
validly  issued  is  clearly  inadmissible ;  and  in  general  there  should 
be  as  little  disturbance  as  possible  of  the  relations  today  existing 
between  different  classes  of  security  holders.  These  relations 
often  seem  unnecessarily  complicated,  both  in  their  provisions  re- 
garding distribution  of  income  and  in  their  delegation  of  voting 
powers. 

The  absence  of  any  attempt  to  base  security  issues  upon  revalu- 
ation will  emphasize  the  true  character  of  our  American  rail- 
road stocks,  as  being  essentially  participation  certificates  giving 
a  right  to  a  proportionate  share  of  whatever  profits  may  be 
earned,  rather  than  as  evidences  that  a  certain  specific  amount  of 
money  has  actually  been  invested  in  the  property. 

19.  Price  of  New  Issues  of  Stock. 

A  most  important  and  difficult  question  is  that  of  the  price  at 
which  new  stock  may  be  issued.  We  believe  that  no  restrictions 
except  those  of  publicity  should  be  placed  upon  the  power  of  the 
directors  to  issue  new  stock  pro  rata  to  their  stockholders  at  or 
above  par.  even  though  the  price  received  be  less  than  the  existing 
market  value  of  the  old  stock.  The  experience  of  ^Massachusetts 
has  shown  that  the  attempt  to  prohibit  the  issue  of  stock  below 
its  uiarket  value  has  hampered  the  investment  of  capital  and  has 
distinctly  interfered  with  the  development  of  facilities.  If  this 
has  been  the  experience  of  ]\Iassachusetts,  where  capital  was  abun- 
dant, we  can  hardly  expect  better  results  in  states  where  capital 
is  more  scarce. 

A  further  obi'ection  to  any  attempt  to  compel  the  sale  of  new 
stock  at  a  price  above  par  is  that  \f  implies  a  certain  warrant  that 
this  value,  thus  publicly  fixed,  will  be  maintained  in  the  future, 
on  the  old  stock  as  well  as  the  new.  In  thus  attempting  to  limit 
profits,  it  may  actually  tend  to  guarantee  them. 

The  question  whether  the  directors  should  be  allowed  to  issue 
stock  below  par  is  a  harder  one  to  answer.  On  the  face  of  the 
matter  it  seems  as  though  the  requirement  that  no  stock  should 


692  APPENDIX. 

be  sold  at  less  than  par  was  a  fundamental  principle  of  sound 
finance.  So  it  is,  if  it  resiUts  in  the  sale  of  stock  at  par ;  not  so, 
if  it  results  in  the  sale  of  bonds  at  a  discount.  If  a  road  whose 
stock,  for  any  reason  whatsoever,  sells  below  par  is  prohibited 
from  issuing  stock  at  less  than  par,  it  means  that  it  must  raise  all 
its  money  by  bonds.  It  is  compelled  to  go  more  and  more  deeply 
into  debt.  The  worse  the  financial  position  of  the  road,  the 
stronger  is  the  compulsion  and  the  heavier  are  the  interest  charges 
on  the  bond.  To  compel  the  weaker  roads  to  pursue  their  present 
policy  of  issuing  fixed  interest-bearing  obligations  by  reason  of 
their  inability  to  sell  stock  at  par  may  before  long,  by  reason  of  a 
large  crop  of  receiverships,  result  in  intensifying  the  acuteness  of 
the  next  panic  and  in  prolonging  the  subseciuent  business  depres- 
sion. 

If  the  stock  bears  upon  its  face  the  statement  that  each  share 
represents  a  contribution  of  one  hundred  dollars  or  any  other 
specified  sum  which  constitutes  its  par  value,  we  see  no  easy  way 
of  avoiding  this  difficulty.  If  a  document  says  one  hundred  dol- 
lars had  been  paid,  one  hundred  dollars  ought  to  be  paid.  The 
most  that  can  properly  be  done  is  to  allow  companies  which  can- 
not sell  such  stock  at  par  to  arrange  for  the  "amortization,"  or 
gradual  cancellation,  of  any  necessary  discount  by  appropriating, 
out  of  future  income  or  surplus  which  may  accrue  subsequent  ta 
the  issue  of  such  stock  an  annual  sum  having  precedence  over  div- 
idend payment,  to  be  so  applied  on  capital  account  as  to  make  the 
deficiency  good  in  a  period  of  no  very  great  length.  If  proper 
provision  is  made  for  thus  cancelling  or  amortizing  this  deficiency, 
such  stock  may  properly  be  made,  by  general  law,  non-assessable. 
The  reluctance  of  directors  to  impair  their  ability  to  pay  divi- 
dends for  a  term  of  years  will  prevent  the  abuse  of  this  power. 
We  believe  the  issue  of  stock  at  a  discount,  under  safeguards  like 
tliese,  to  be  far  preferable,  in  the  interest  of  the  public,  to  the  sale 
of  bonds  at  a  high  rate  of  interest,  or  what  amounts  to  the  same 
thing,  at  a  large  discount. 

20,  Shares  Without  Par  Value. 

We  do  not  believe  that  the  retention  of  the  hundred  dollar 
mark,  or  any  other  dollar  mark,  upon  the  face  of  the  share  of 
stock,  is  of  essential  importance.  We  are  ready  to  recommend 
that  the  law  should  encourage  the  creation  of  companies  whose 
shares  have  no  par  value,  and  permit  existing  companies  to 
change  their  stock  into  shares  without  par  value  whenever  their 
convenience  requires  it.  After  such  conversion  any  new  shares 
could  be  sold  at  such  price  as  was  deemed  desirable  bv  the  board 
of  directors,  with  the  requirement  of  publicity  as  to  the  proceeds 
of  the  sale  of  such  shares  and  as  to  the  disposition  thereof;  giving 
to  the  old  shareholders,  except  in  some  cases  of  reorganization  or 
consolidation,  prior  rights  to  subscribe  p^o  rata,  if  they  so  desired, 
in  proportion  to  the  amount  of  their  holdings. 


NATIONAL   SECURITIES   COMMISSION    REPOKT.  693 

As  between  the  two  alternatives  of  permitting  tlie  issue  of  stock 
below  par,  or  authorizinp:  the  croation  of  shares  without  par 
value,  the  latter  seems  to  this  Commission  the  preferable  alter- 
native. It  is  true  that  it  will  be  less  (Msy  to  introduce  than  the 
other,  because  it  is  less  in  accord  with  existing  business  liabits  and 
usages,  but  it  has  tlie  cardinal  merit  of  accuracy.  It  makes  no 
claims  that  the  share  thus  issued  is  anything  more  than  a  partici- 
pation certificate. 

The  objections  to  the  creation  of  shares  without  par  value  are 
two  in  number.  First,  that  their  issue  will  permit  inflation,  by 
making  it  easy  to  create  an  excessive  number  of  shares,  and  sec- 
ond, tliat  it  will  produce  a  division  of  roads  into  two  classes,  those 
whose  shares  have  a  par  value  and  those;  whose  shares  have  not. 
The  second  of  these  ol)jections  does  not  appear  to  be  a  very  serious 
one.  There  ai-e  listed  on  the  stock  exchanges  today,  side  by  side 
with  one  another,  shares  of  the  par  value  of  one  hundred  dollars, 
shares  of  the  par  value  of  fifty  dollars,  shares  with  very  much 
smaller  par  value,  and  a  few,  like  the  Great  Northern  Ore  Cer- 
tificates, with  no  par  value  at  all.  The  share  sells  in  each  case  sim- 
ply for  what  the  public  supposes  it  to  be  worth  as  a  share.  The 
danger  of  inflation  deserves  more  serious  consideration.  AVe  be- 
lieve, however,  that  it  is  more  apparent  than  real,  because  share- 
holders will  be  jealous  of  permitting  other  shareholders  to  ac- 
quire shares  in  the  association  except  at  full  market  value,  and 
will  not  permit  the  issue  of  such  shares  to  themselves  at  prices  so 
low  as  seriously  to  impair  the  market  or  other  value  of  their  hold- 
ings. Shares  either  with  or  without  par  value,  and  whether  sold 
at  par  or  above  par  or  below  it,  should,  except  in  cases  of  consol- 
idation and  reorganization,  be  offered  in  the  first  instance  to  ex- 
isting shareholders  pro  rata. 

The  issue  of  stock  without  par  value  offers  special  facilities  for 
consolidation  and  reorganization. 

Where  two  roads  have  consolidated  whose  shares  have  different 
market  values,  it  has  been  the  custom  to  equalize  the  difference  by 
the  is^uc  of  extra  shares  of  the  consolidated  company  to  the  own- 
ers of  the  higher  priced  stock.  This  practice  has  always  tended 
to  produce  increase  of  capital  issues,  and  may  readily  cause  the 
new  stock  to  be  issued  for  a  consideration  less  than  its  par  value. 
The  only  alternative  was  to  scale  down  some  of  the  old  stoeks; 
and  this  often  involved  serious  difficulties,  both  of  business  policy 
and  of  law.  By  the  simple  expedient  of  omitfing  the  dollar  mark 
from  ihe  new  shares,  the  number  can  be  adjusted  to  the  demands 
of  finnncial  convenience,  without  danger  of  misrepresentation  or 
suspicion  of  unfairness  to  anyone. 

In  the  case  of  reorganizafions.  the  advnntTsre  of  shares  with- 
out par  value  is  even  more  conspieuous.  It  is  here  that  the  neces- 
sity and  justice  of  getting  money  from  stockholders  is  greatest  ^  it 
is  hero  that  the  imi)ossibility  of  getting  them  to  pay  par  for  new 


694  APPENDIX. 

shares  is  most  conspicuous.  AA^e  believe  that  in  such  cases  the 
public  interest  wouhl  be  subserved,  and  the  speedy  rehabilitation 
of  the  roads  promoted,  by  requiring  the  conversion  of  the  com- 
mon stock  and  encouraging  the  conversion  of  the  preferred  stock 
into  shares  without  par  value ;  the  certificates  simply  indicating 
the  proportionate  or  preferential  claims  of  the  holders  upon 
assets  and  upon  such  profits  as  might  from  time  to  time  be  earned. 
All  of  these  considerations  seem  to  apply  with  equal  force  to 
the  securities  of  railroads  under  state  incorporations,  and  we  be- 
lieve the  laws  of  the  several  states  could  with  advantage  be  modi- 
fied so  as  to  provide  for  the  issuance  of  stock  without  par  value. 

21.  New  Issues  of  Bonds. 

It  seems  to  be  generally  agreed  that  no  limitation  should  be 
placed  on  the  price  at  which  bonds  can  be  sold.  But  any  dis;-oant 
should  be  cancelled  or  amortized  during  the  life  of  the  bonds  by 
the  appropriation  each  year,  out  of  annual  income  or  surplus  ac- 
cumulated after  the  issue  of  the  bonds,  of  not  less  than  the  pro- 
portionate amount  of  the  discount.  In  the  case  of  convertible 
bonds,  the  same  provision  should  hold  good,  with  the  additional 
restriction  that  after  conversion  the  laws  governing  the  amortiza- 
tion of  discount  on  stock  sold  below  par  should  apply  also  to  the 
unamortized  discount  on  convertible  bonds.  AVhile  the  con- 
vertible bonds  themselves  may  be  sold  below  par,  the  conversion 
price  of  the  stock  should  equal  its  face  value ;  except  of  course  in 
case  of  shares  without  par  value,  where  no  limit  as  to  conversion 
price  is  necessary,  nor  any  amortization  after  conversion.  The 
premium  on  bonds  redeemed  before  maturity  or  the  unamortized 
discount  on  bonds  thus  redeemed  should  be  charged  to  profit  and 
loss,  and  provision  made  for  the  gradual  cancellation  of  this 
charge  out  of  income. 

Issues  of  convertible  bonds  should  be  offered  to  stockholders 
pro  rata,  in  the  same  manner  as  stock  itself,  to  the  extent  to  which 
they  may  choose  to  avail  themselves  of  the  privilege  of  subscrip- 
tion. 

22.  Dividends  and  Reserve  Funds. 

No  attempt  should  be  made  by  statute  to  limit  railroad  profits 
to  a  fixed  percentage,  or  to  treat  a  high  cash  dividend  as  neces- 
sarily indicating  extortion.  Uailroad  charges  must  be  reasonable, 
but  to  try  to  control  rates  by  arbitrarily  limiting  profits,  is  to 
put  the  manager  who  makes  his  profit  by  efficiency  and  economy 
on  the  same  level  as  the  one  who  tries  to  accomplish  the  same  re- 
sult through  extortionate  charges. 

Scrip,  bond  and  stock  dividends  should  be  prohibited.  They 
are  commonly  justified  on  the  theory  that  the  company  has  in 
times  past  put  eamincrs  into  the  properly  which  it  might  have  di- 
vided among  the  stockholders  and  that  the  scrip  dividend  merely 
reimburses  the  stockholders  for  what  they  have  put  into  the  road. 


KATlOKxVL  SECURITIES  COMMISSION   EEPOET.  695 

But  these  sums  were  put  in,  either  to  mal<e  depreciation  and  ob- 
solescence good,  or  as  actual  additions  to  tlie  property.  In  the 
former  case  the  capital  account  ouyht  not  to  be  increased.  In  the 
latter  case  any  such  increase  gives  color  to  the  claim  tliat  the  ship- 
pers have  been  taxed  to  pay  for  the  improvement  of  the  property, 
and  that  the  stockholders  have  apropriated  the  result. 

.Many  of  the  stock  dividends  in  past  years  have  represented  an 
increase  in  the  value  of  the  property,  not  paid  for  eitlier  by  in- 
vestors or  by  shippers,  but  due  simply  to  the  foresight  of  tbe 
management  in  locating  and  organizing  its  business  wisely. 
Under  these  circumstances  a  stock  dividend  to  represent  tliis  in- 
creased value  may  possibly  have  been  justified.  But  it  is  far  bet- 
ter to  let  the  increased  value  be  sliown  by  a  regular  rate  of  divi- 
dend on  the  existing  shares  of  stock,  instead  of  by  an  addition  to 
their  nominal  amount. 

If  we  prohibit  scrip  dividends,  we  can  permit  the  creation  of 
proper  reserve  funds,  without  having  them  regarded  with  sus- 
picion as  being  a  pretext  for  future  issues  of  unpaid  stock. 
Sound  finance  demands  that  the  companies  should  set  aside  such 
fmids.  out  of  income,  to  ''defray  the  cost  of  progress."  They 
can  thus  provide  against  obsolescence,  or  make  improvements 
which  add  nothing  to  the  earning  capacity  of  the  property  and 
ought  not  therefore  to  be  made  the  basis  of  increased  capital  lia- 
bility. 

Failure  to  encourage  the  creation  of  reserve  funds  out  of  sur- 
plus earnings  would  cause  a  constant  increase  of  fixed  charges, 
already  heavy  enough.  Whatever  gain  there  misrht  be  in  a 
present  lowering  of  rates  would  bo  merely  temporary.  Investors 
and  sliippers  would  alike  be  misled;  the  former  into  a  fancied 
security  as  to  the  permanence  of  dividends,  the  latter  into  the 
belief  that  such  reduction  in  rates  was  permanent.  Ultimately 
such  a  course  would  lead  either  to  higher  rates  or  to  steadily 
diminishing  dividends  and  consequent  impaired  credit.  Railroad 
credit  is  an  important  asset  to  the  entire  country  and  it  should  not 
be  wasted.  In  encouraging,  therefor,  the  creation  of  reserve 
funds,  we  are  only  suggesting  that  the  present  generation  shall 
not  be  unmindful"  of  its  obligations  to  future  users  of  transpor- 
tation. . 

Cash  dividends  are  not  likely  to  be  as  large  as  scrip  dmdends. 
because  the  former  involve  the  distribution  of  a  corresponding 
amount  of  cash,  while  the  latter  does  not.  Under  these  circum- 
stances the  prohibition  of  scrip  dividends  should  of  itself  en- 
courage the  creation  of  proper  reserve  funds.  In  this  as  in  other 
respects,  all  these  three  proposals — freedom  from  arbitrary  re- 
striction of  profits,  prohibition  of  scrip  dividend,  and  creation  of 
proper  reserve  funds — hang  closely  toLrotlior.  Any  one  by  itself 
may  be  of  doubtful  value,  taken  together,  they  should  produce 
a  result  advantageous  to  all. 


696  APPENDIX. 

23.  Treatment  of  Intercorporate  Holdings. 

AVliatever  may  be  the  evils  due  to  such  holdings,  an  unqualified 
prohibition  of  tlie  ownership  of  stock  of  one  road  by  another  in- 
volves too  much  disturbance  of  existing  relations  to  warrant  us 
in  advocating  it.  ]\luch  will  be  accomplished  if  we  do  away  with 
the  unnecessary  extension  of  these  holdings,  and  provide  for 
equitable  dealings  between  the  representatives  of  the  purchasing 
company  on  the  one  hand,  and  the  holders  of  minoi-ity  interests 
on  the  other. 

If  a  railroad  company  is  allowed  to  build  the  necessary  lines 
into  other  states  for  the  handling  of  interstate  business,  instead 
of  being  compelled  to  create  some  separate  company  to  do  this, 
one  fruitful  reason  for  intercorporate  holdings  will  be  done  awa}^ 
with.  If  we  have  full  requirements  of  publicity  regarding  the 
purchase  of  stock  of  other  companies  and  have  the  disclosure  of 
directors'  interests  therein,  another  source  of  danger  is  avoided. 
If.  finally,  we  can  remove  artificial  obstacles  to  consolidation  by 
permitting  the  issue  of  shares  without  par  value,  we  shall  be  able 
to  avoid  the  expense  of  double  corporate  organization  where  a 
single  company  would  better  serve  public  economy  and  conven- 
ience. In  this  and  other  respects,  many  of  our  difficulties  are 
due  to  the  attempt  to  rely  upon  competition  in  a  business  which, 
in  private  hands,  should  be  treated  in  essentials  as  a  regulated 
monopoly. 

Any  company,  or  group  of  companies,  which  has  purchased  a 
majority  of  the  stock  of  any  existing  road  may  properly  be  re- 
quired to  buy  the  minority  stock  at  the  same  price  as  that  paid  for 
the  majority  stock  where  the  price  has  been  uniform.  If  the  price 
has  not  been  uniform,  the  purchase  should  be  either  at  the  aver- 
age price  paid  for  such  holdings  or  at  a  price  to  be  fixed  by  ap- 
praisal, at  the  option  of  the  minority  stockholders. 

If  a  company  has  acquired  control  of  the  common  stock  of  an- 
other, but  not  of  its  preferred,  it  should  be  required  either  to 
buy  the  preferred  stock,  or  to  make  the  preference  cumulative. 
For  the  continued  existence  of  a  non-cumulative  preference  under 
such  conditions  will  offer  constant  temptations  to  unfair  dealing, 
if  not  to  actual  fraud. 

In  order  to  avoid  vexatious  opposition  to  consolidation  by  a 
minority  it  should  be  possible,  after  such  an  offer  had  been  fairly 
made,  to  convey  the  property  by  three-fourths  vote  of  the  share- 
holders and  dissolve  the  corporation.  The  purchase  of  less  than 
a  majority  of  the  stock  of  one  line  by  another  (except  as  one  of  a 
group  of  railroads  jointly  holding  the  stock  of  some  connecting 
company)  should  be  discountenanced  and  as  far  as  possible  pro- 
hibited. 

"What  we  have  here  said  applies  only  to  intercorporate  hold- 
ings arising  out  of  railroad  affiliations  permissible  under  existing 
statutes  and  not  in  conflict  with  declared  principles  of  public 
policy. 


NATIONAL  SECURITIES  COMMISSION   REPORT.  C07 

24.  Reasonable  and  Unreasonable  Expectations. 

An  agreement  on  these  lines  will  enable  us  to  avoid  many  ex- 
isting conflicts  of  jurisdiction,  and  will  inr-identally  remote  hon- 
est and  responsible  management  of  our  railroads  in  every  depart- 
ment. So  far  as  it  does  this,  it  will  be  a  good  thing  both  for  in- 
vestors and  for  shippers.  But  the  extent  to  which  a  law  regard- 
ing security  issues,  however  well  drawn,  can  protect  either  the 
investor  or  tlie  shipper  is  quite  limited. 

]\Iost  of  those  who  advocate  legislation  on  this  subject  hope  for 
wider  results  than  can  possibly  be  reached  by  any  such  means. 
One  man  expects  that  a  good  law  on  stock  and  bond  issues  will 
be  of  great  service  in  enabling  courts  and  commissions  to  protect 
the  shippers  against  overcharge.  A  second  believes  that  both  in- 
vestors and  shippers  can  be  benefited  by  an  abolition  of  the 
profits  of  the  promoter.  A  third  thinks  that  our  securities  can 
be  standardized,  so  that  the  investors  will  be  sure  of  getting 
the  returns  Avhich  are  promised  them.  A  fourth  demands  that 
public  confidence  be  so  restored  that  the  conuiumity  may  get 
the  railroad  capital  it  requires.  The  attainment  of  these  results 
is  beyond  the  power  of  an  Act  of  Congress.  The  chief  thing  that 
such  an  Act  can  do  is  to  remove  obstacles  which  bad  laws  and 
worse  practices  have  placed  in  our  way. 

The  attempt  to  render  direct  protection  to  the  shipper  by  a 
federal  statute  regarding  stock  and  bond  issue,  is  attended  with 
difficulties  which  are  almost  insuperable. 

In  the  case  of  Smyth  v.  Ames  the  Supreme  Court  of  tlie 
United  States  held  that  the  amount  of  bonds  and  stocks  out- 
standing was  but  one  among  many  matters  to  be  considered  in  de- 
ciding whether  rates  w'ere  reasonable.  This,  therefore,  is  the 
law  as  determined  by  precedent;  and  it  is  fortunate  that  the 
dictates  of  precedent  coincide  with  those  of  business  sense.  The 
attempt  to  make  the  face  value  of  securities  issued  the  determin- 
ing factor  in  rates,  would  result  in  putting  a  premium  on  roads 
which  had  been  speculatively,  not  to  say  dishonestly,  built  or 
managed,  by  allowing  them  to  charere  higher  rates  on  account 
of  the  inflated  capital  thus  produced.  And,  wholly  apart  from 
any  such  speculation  or  dishonesty,  the  amount  of  stock  capital 
and  bonded  debt,  even  if  paid  for  at  par.  is  a  very  inaccurate  and 
incomplete  criterion  of  the  value  of  the  property  devoted  by  its 
owners  to  public  use.  It  has  at  best  only  a  historical  importance, 
as  showing  what  property  was  or  purported  to  be  worth  at  the 
time  of  tlie  incorporation.  It  does  not  show  what  it  is  worth,  or 
■what  rates  may  properly  be  charged  for  its  use,  ten  years  later 
or  even  one  year  later. 

25.  Promoters'  Profits  and  Services. 

"We  are  told  that  the  profits  of  the  promoter  represents  a 
wholly  unnecessary  burden  upon  the  .\merican  public,  and  that 
so  far  as  this  profit  can  be  done  away  with  it  will  be  erood  for 


698  APPENDIX. 

all  parties.  Neither  of  these  statements  is  quite  true.  The  pro- 
moters, using  the  term  in  a  broad  sense,  may  be  divided  into  two. 
classes :  constructors  who  build  a  road  whose  future  is  uncertain, 
in  the  expectation  of  selling  the  stock  for  more  than  it  cost  them ; 
and  financiers  who  induce  the  public  to  buy  the  bonds  of  such 
roads.  Both  of  these  classes,  if  they  do  their  work  honestly,  ren- 
der a  useful  service  to  the  public.  The  constructor  gives  our- 
undeveloped  districts  the  benefit  of  new  roads,  which  they  would 
not  get  without  his  intervention;  and  if  he  does  his  business 
well,  he  builds  the  roads  more  economically  than  anybody  else 
could.  The  financier  renders  an  equally  important  service  in 
collecting  the  capital  of  the  investors  to  build  new  railroads  or 
improve  old  ones.  On  the  Continent  of  Europe  this  is  done  by 
the  banks.  The  great  banking  concerns  of  Germany  use  a  very 
considerable  part  of  their  deposits  in  carrying  industrial  enter- 
prises during  their  initial  stages  before  their  merits  have  been 
demonstrated,  then  disposing  of  them  to  the  actual  investor  at  a 
profit  in  order  to  set  their  capital  free  for  the  floating  of  new 
concerns.  But  in  the  United  States  the  power  of  the  banks  to 
do  this  is  limited  by  law  and  by  custom ;  and  so  far  as  they  either 
cannot  or  do  not,  it  must  be  done  by  financial  houses  specially 
organized  for  the  purpose. 

Our  American  system  undoubtedly  involves  grave  possibilities 
of  fraud.  The  man  who  is  constructing  a  road  is  tempted  to  per- 
suade people  to  loan  him  money  on  inadequate  security.  The 
financiers  may  be  tempted  to  wink  at  this  deception.  Worst  of 
all,  the  roads  thus  built  may  be  built  for  sale  at  an  inflated  valu- 
ation. The  promoter  may  obtain  his  profit,  not  from  tlie  legiti- 
mate increase  of  the  value  of  his  property,  but  from  his  power 
to  persuade  the  management  of  some  larger  system  to  buy  the- 
branch  road  for  more  than  it  is  really  worth.  "These  are  evils 
which  publicity  would  do  much  to  check.  "Where  there  is  no 
fraud,  the  promoter  renders  a  service  for  which  he  is  entitled  to 
fair  remuneration. 

26.  Standardization  of  Railroad  Securities. 

We  are  told  that  if  it  was  possible  to  standardize  food  by  a 
pure  food  law.  it  ought  to  be  possible  to  standardize  railroad  se- 
curities by  a  securities  law.  It  is  possible — to  the  same  ex- 
tent and  no  more.  The  pure  food  law  enables  a  man  to  know 
what  he  is  buying.  It  does  not  certify  that  the  thing  he  buys 
is  good  for  him.  That  is  left  to  his  intelligence.  The  govern- 
ment cannot  protect  the  investors  aerainst  the  consequences  of 
their  unwisdom  in  buying  unprofitable  bonds,  any  more  than  it 
can  protect  tbe  consumers  against  the  consequences  of  their  un- 
wisdom in  eating  indicrostible  food.  Unless  we  are  prepared  to 
have  government  guarantees  of  interest  on  railroad  investments 
— a  most  questionable  proposal — ^the  only  way  in  which  we  can- 


NATIONiVL   SECURITIES   COMMISSION    EEPOBT.  G99 

standardize  railroad  niorts^'agcs  is  tlic  one  wliich  we  use  with 
savings  bank  inor'^^ages.  We  can  insist  on  douljle  security.  We 
can  say  that  at  least  half  the  capital  of  a  railroad  must  be  sub- 
scribed by  stockholders,  and  not  more  than  half  may  be  raised 
by  borrowing — a  diflicult  re<juirement  under  existing  condi- 
tions. Until  we  are  prepared  to  pass  some  law  of  this  kind  the 
investor  must  depend  upon  his  own  intelligence  to  protect  him 
from  loss.  The  function  of  the  government  is  to  see  that  cor- 
rect information  is  available. 

27.  Restoration  of  Public  Confidence. 

There  was  a  time  when  thu  cirurts  of  the  banking  authorities 
in  most  of  the  states  were  directed  toward  getting  the  discount 
rates  as  low  as  possible.  The  bank  commissioners  in  those  days 
regarded  themselves  as  the  representatives  of  the  merchants  who 
wanted  loans;  they  made  little  or  no  attempt  to  safeguard  the 
stockholders  and  creditors  of  the  bank.  Those  were  the  days  of 
wildcat  banking.  The  country  has  passed  beyond  that  period — 
not  solely  or  primarily  because  it  obtained  a  National  lianking 
Law,  but  because  it  administered  that  law  with  due  regard  to 
the  security  of  the  stockholders  and  creditors  of  the  bank  as  w^ell 
as  its  customers.  We  have  not  developed  our  ideas  of  railroad 
management  as  far  as  we  have  developed  our  ideas  of  bank 
management.  The  subject  is  a  more  complex  one.  The  appar- 
ent conflict  of  interests  between  the  management  and  the  cus- 
tomers is  greater  with  a  railroad  than  with  a  bank.  As  a  result 
of  this  misunderstanding,  the  necessary  development  of  railroad 
facilities  is  now  endangered  by  the  reluctance  of  investors  to 
purchase  new  issues  of  railroad  securities  in  the  amounts  re- 
quired. This  reluctance  is  likely  to  continue  until  the  American 
public  understands  the  essential  community  of  interest  between 
shipper  and  investor,  and  the  folly  of  attempting  to  protect  the 
one  by  taking  away  the  rewards  of  good  management  from  the 
other. 

We  are  told  that  a  good  law  regarding  national  incorporation 
would  of  itself  create  public  confidence.  This  is  an  over-state- 
ment. Such  a  law  would  remove  one  set  of  sources  of  distrust, 
but  there  is  another  set,  more  fundamental,  which  can  only  be 
removed  by  the  exercise  of  intelligence  on  the  part  of  the  Ameri- 
can people  as  a  whole. 

28.  Amount  of  Additional  Capital  Required. 

There  is  a  widespread  belief,  based  on  imperfect  examination 
of  the  evidence,  that  the  amount  of  eajutal  needed  for  the  future 
development  of  our  railroad  system  is  small  in  proportion  to  that 
which  has  been  required  in  the  past;  that  the  profits  on  such 
added  investments  of  capital  are  reasonably  well  assured ;  and 
that  we  can  therefore  fix  attention  predominantly  if  not  exclu- 


700  APPENDIX. 

sively  on  the  needs  of  the  shipper  -svithout  interfering  with  the 
necessary  supph'  of  new  money  from  the  investors,  it  is  quite 
possible  that  the  building  of  additional  railroad  mileage  will  be 
far  less  rapid  in  the  future  than  it  has  been  in  the  past.  But  the 
capital  needed  for  the  development  and  the  improvement  of  the 
mileage  already  existing  is  enormous,  even  if  we  built  no  new 
mileage  at  all.  The  outstanding  stock  and  debt  of  the  railways 
in  the  United  States  averages  less  than  $60,000  a  mile  of  line. 
This  figure  is  bound  to  be  greatly  increased  in  the  immediate 
future.  As  our  population  grows  denser,  we  shall  need  more  and 
more  to  approximate  European  standards  of  construction  by  the 
increased  amount  of  double  track,  the  abolition  of  grade  cross- 
ings, the  development  of  station  facilities,  both  for  passengers 
and  for  freight,  and  many  other  improvements  scarcely  less  fun- 
damental. "While  our  railroads  are  perhaps  even  better  equipped 
for  the  economical  handling  of  large  masses  of  long  distance 
freight,  they  are  far  from  being  adequately  provided  with  ap- 
pliances to  secure  the  convenience  of  the  public  or  the  safety  of 
passengers  and  employees.  The  cost  of  all  these  things  is  very 
great.  The  average  capitalization  per  mile  of  railroads  in  Ger- 
many is  $109,000,  in  France  $137,000,  in  Belgium  $177,000,  in 
Great  Britain  $265,000 ;  and,  contrary  to  the  commonly  received 
opinion  much  of  this  excess  of  cost  as  compared  with  American 
roads  is  due  to  other  causes  than  the  price  of  real  estate — an  item 
in  which  our  companies  have  had  a  great  advantage.  The  cost 
of  European  roads  has  been  largely  due  to  improvements  which 
we  have  not  yet  made,  and  many  of  which  we  must  make  in  the 
future  as  population  grows  denser.  The  thousands  of  millions  of 
dollars  needed  for  these  purposes  must  be  raised  by  the  sale  of 
securities. 

29.  Present  Return  and  Future  Security. 

Neither  the  rate  of  return  actually  received  on  the  par  value  of 
xVmerican  railroad  bonds  and  stocks  today,  nor  the  security 
which  can  be  offered  for  additional  railroad  investments  in  the 
future,  will  make  it  easy  to  raise  the  needed  amount  of  capital. 

The  ratio  of  interest  and  dividends  to  outstanding  bonds  and 
stocks  of  American  railroads  is  not  quite  four  and  a  half  per  cent 
in  each  case.  The  average  ratio  of  dividends  to  the  capital  of 
national  banks  is  between  ten  and  eleven  per  cent.  If  it  be  ob- 
jected that  the  value  of  the  stocks  of  our  railroads  is  in  consider- 
able measure  due  to  the  growth  of  the  community  rather  than  to 
the  cash  originally  invested,  and  that  the  bonds  and  stocks  of 
railroads  should  therefore  be  compared  with  the  combined  capi- 
tal and  surplus  of  the  national  banks,  we  find  that  the  banks  have 
for  the  last  three  years  maintained  an  average  ratio  of  dividends 
to  capital  and  surplus  combined  of  over  six  and  a  half  per  cent. 
If  we  look  not  at  the  sums  divided,  but  at  the  sums  earned,  we 
ilnd  the  same  difference  of  profit  in  favor  of  the  banks. 


NATIONAL    SECURITIES   COMMISSION    REPORT.  7Ul 

Nor  can  the  security  which  most  of  our  railroads  ofTer  be  re- 
garded as  exceptional.  The  underlying  bonds  of  the  older  sys- 
tems are  doubtless  secure.  It  is  not  probable  that  even  a  grave 
commercial  crisis  will  affect  the  return  of  a  trunk  line  lii'st  mort- 
gage. ]iut  very  little  of  the  new  capital  can  be  raised  on  secu- 
rities of  this  kind.  ]\lost  of  it  must  come  either  from  bonds  whicli 
will  not  be  a  first  lien  for  many  years,  or  from  new  issues  of  (•aj)i- 
tal  stock.  The  investoi-s  in  these  securities,  and  especially  in 
stocks,  take  risks  which  cannot  be  accurately  forecast.  Apart 
from  i>robable  fluctuations  in  trafTic  and  probable  increases  in 
cost  of  operation,  new  inventions  may  at  any  time  render  much  of 
their  i)ies('iit  plant  anti<|uafc(l.  The  substitution  of  electricity 
for  steam  is  but  a  type  of  the  many  chanjics  which  railroads  may 
be  compelled  to  make,  any  one  of  which  mi<,'lit  involve  larjje  addi- 
tions to  their  cost  without  the  assurance  of  corresponding  addi- 
tions to  their  return. 

30.  What  Constitutes  a  Reasonable  Return. 

We  hear  much  about  a  reasonable  return  on  capital.  A  reason- 
able return  is  one  which  under  lionest  accounting  and  responsible 
management  will  attract  the  amount  of  investors'  money  needed 
for  the  development  of  our  railroad  facilities.  ]\lore  than  this 
is  an  unnecessary  public  burden.  Less  than  this  means  a  check 
to  railroad  construction  and  to  the  development  of  tratTic.  AVhere 
the  investment  is  secure,  a  reasonable  return  is  a  rate  which  ap- 
pi'oxiinates  the  rate  of  interest  which  prevails  in  other  lines  of 
industry.  "Where  the  future  is  nncertain  the  investor  demands, 
and  is  justified  in  demanding,  a  chance  of  added  profit  to  com- 
pensate for  his  risk.  AVe  cannot  secure  the  immense  amount  of 
capital  needed  unless  we  make  profits  and  risks  commensurate.  If 
rates  are  going  to  be  reduced  whenever  dividends  exceed  cur- 
rent rates  of  interest,  investors  will  seek  other  fields  where  the 
hazard  is  less  or  the  opportunity  greater.  In  no  event  can  we  ex- 
pect railroads  to  be  developed  merely  to  pay  their  owners  such 
a  return  as  they  could  have  obtained  by  tlie  purchase  of  invest- 
ment securities  wliich  do  not  involve  the  hazards  of  construction 
or  the  risks  of  0]XM-ation. 

31.  Points  to  be  Emphasized. 

In  concluding  its  report  your  Commission  desires  to  emphasize 
the  following  ]ioints: 

1st.  Tlie  questions  presented  for  its  cou'^iderntion  do  not  in- 
clude or  involve  a  comparison  of  the  policy  of  governmental 
ownership  of  raih-oads  with  the  policy  of  ]ii'ivate  ownership  in 
any  of  its  forms.  The  Act  of  Congress  nnder  which  the  Commis- 
sion was  appointed  provides  that  its  duty  shall  be  *'to  investigate 
questions  pertaining  to  the  issuance  of  stocks  and  bonds  by  rail- 
road corporations,  subject  to  the  provisions  of  the  Act  to  regulate 


702  APPENDIX. 

commerce,  and  tlie  power  of  Congress  to  regulate  or  affect  the 
same."  The  Commission  has,  therefore,  concerned  itself  exclu- 
sively with  questions  which  arise  under  a  system  of  governmental 
regulation  of  privately  owned  railroads. 

2nd.  It  has  not  seemed  to  the  Commission  profitable  to  con- 
sider at  length  what  the  government  might  have  done  in  times 
past,  nor  to  enter  upon  a  historical  recital  of  incidents  arising 
out  of  the  unregulated  issue  of  securities.  Railroad  development 
has  gone  so  far  and  such  a  vast  volume  of  securities  has  already 
been  issued,  that  the  only  questions  of  real  importance  today 
are  whether,  under  the  conditions  which  now  exist,  it  is  desirable 
for  the  federal  government  to  regulate  the  issue  of  future  securi- 
ties, and  if  so,  to  what  extent  and  in  what  manner.  In  other 
words,  the  large  volume  and  complex  relationships  of  the  out- 
standing securities,  the  issue  of  which  has  not  been  regulated  at 
all  by  the  federal  government  and  has  not  been  efFeetively  regu- 
lated by  the  state  governments,  make  it  impossible  to  treat  the 
question  of  present  or  future  regulation  as  it  might  have  been 
treated  if  these  securities  were  not  already  in  existence. 

3rd.  It  would  have  been  equally  unprofitable  for  the  Commis- 
sion to  enter  upon  an  elaborate  discussion  of  the  power  of  Con- 
gress to  regulate  or  affect  railroad  securities,  at  a  time  when  im- 
portant cases  are  pending  which  will  go  far  to  determine  the 
scope  and  extent  of  federal  authority  in  this  and  other  closely  re- 
lated subjects.  Such  a  discussion  could  only  state  the  opinion 
of  the  members  of  the  Commission  regarding  the  constitutional 
power  of  Congi'ess.  The  issues  themselves  will  remain  undecided 
until  the  Supreme  Court  decides  them.  Whatever  may  be  the 
ultimate  outcome,  the  present  fact  which  faces  us  is  that  con- 
stitutional questions  of  far-reaching  consequence  are  today  un- 
settled and  must  remain  so  for  a  considerable  time.  Under  tlies^ 
circumstances,  any  attempt  by  Conoress  to  adopt  the  policy  of 
federal  regulation  to  the  exclusion  of  state  regulation,  would  be 
premature.  On  the  other  hand,  to  superimpose  federal  regula- 
tion upon  state  regulation  would  add  to  conflicts  and  complexities? 
which,  in  the  public  interest,  should  be  diminished  rather  than 
increased.  Your  Commission  believes  that  for  the  present  an 
earnest  effort  should  be  made  on  the  part  of  state  authorities  to 
harmonize  existing  requirements,  both  of  law  and  procedure,  and 
that  for  the  future  careful  consideration  should  lie  given  by 
Concrress  to  the  preparation  of  a  permissive  federal  incorporation 
act  for  railroads  engaged  in  interstate  commerce. 

4th.  Many,  if  not  most,  of  the  abuses  connected  with  railroad 
securities  arise  out  of  an  almost  universal  failure  to  recognize 
the  distinctions  which  exist  and  should  exist  between  bonds  and 
stocks.  A  bond  is  an  obligation  to  pay  a  fixed  sum  of  money  at  a 
stated  time.  A  stock  certificate  is  merely  the  evidenr^e  of  owner- 
ship of  a  share  in  the  property,  profits,  and  risks  of  a  corporation. 


NATIONALi   SECURITIES   COMMISSION    REPORT.  703 

Most  of  the  evils  of  vvhicli  investors  and  the  puhlii:  coin[)lain  have 
grown  out  of  the  attempt  to  give  the  stock  a  face  value  in  terms 
of  money.  Even  if  the  state  laws  prohibiting  the  issue  of  sto^-ks 
for  less  than  i)ar  were  literally  enforced  all  that  the  recitals  on 
the  face  of  a  fully  paid  share  of  stock  as  to  its  par  or  money  value 
would  signify  is  that  at  the  time  of  the  issuance  of  the  share 
there  had  been  paid  into  the  corporation  an  amount  of  money  (or 
other  valuable  consideration)  equal  to  the  par  value  of  the  share. 
They  do  not  even  purport  to  indicate  that  at  any  time  after  the 
original  issue  of  the  stock  the  corporation  was  possessed  either  of 
the  money  or  the  money's  worth.  The  real  value  of  the  stock 
certificate  depends  upon  the  manner  in  which  the  money  has 
been  invested.  The  Commission  is,  therefore,  of  the  opinion  that 
it  is  far  more  important  to  ascertain  just  what  are  the  facts 
connected  with  the  issue  of  securities  and  what  has  actually  been 
done  with  whatever  money  has  in  fact  been  realized  from  the 
stock  that  is  issued,  than  merely  to  make  sure  that  the  par  value 
of  the  stock  was  paid  in  at  the  time  of  issue. 

5th.  If  we  were  compelled  to  assume  that  rates  are  to  be  ma- 
terially influenced  either  in  their  making  by  the  railroads  or  in 
their  regulation  by  the  government  by  the  amount  and  face  value 
of  the  stocks  and  bonds  outstanding,  it  seems  to  your  Commission 
impossible  to  escape  the  conclusion  that  these  securities  'lould  be 
issued  only  under  governmental  regulation.  Your  Commission, 
however,  believes  that  the  amount  and  face  value  of  outstanding 
securities  has  only  an  indirect  effect  upon  the  actual  making  of 
rates  and  that  it  should  have  little,  if  any,  weight  in  their  regu- 
lation. 

In  so  far  as  the  value  of  the  property  is  an  element  in  rate  reg- 
ulation the  outstanding  securities  are  of  so  little  evidentiary 
weight  that  it  would  probably  be  of  distinct  advan+age  if  courts 
and  commissions  would  disrecrard  them  entirely,  except  as  a 
part  of  the  financial  history  of  the  property,  and  would  insist 
upon  direct  evidence  of  the  actual  money  invested  and  of  the 
present  value  of  the  properties.  For  this  and  other  reasons  dis- 
cussed in  the  body  of  the  report,  your  Commission  recommends 
that  the  Interstate  Commerce  Commission  should  have  authority 
and  adequate  funds  to  make  a  valuation  of  the  physical  property 
of  railroads  wherever  the  question  of  the  present  value  of  these 
roads  is.  in  the  judgment  of  that  Commission,  of  suffident  impor- 
tance. It  is  hardly  necessary  to  add  that  vour  Commission  does 
not  believe  that  the  cost  of  reproduction  of  the  phvsical  proper- 
ties, however  carefully  computed,  is  the  sole  element  to  be  consid- 
ered in  determining  the  present  value  of  a  railroad,  or  that  the 
outstanding  securities  could  or  should  be  made,  to  conform  to 
any  such  ai-bitrary  standard. 

If,  however,  railroad  securities  are  to  be  issued  onlv  after  ex- 
press authorization  of  each  particular  issue  by  the  Interst<ate 


704:  APPENDIX 

Commerce  Commission  or  other  governmental  agency,  it  is  difficult 
to  see  how  the  government  can  thereafter  escape  the  moral,  if  not 
the  legal,  obligation  to  recognize  these  secnritios  in  the  regnhition 
of  railroad  rates.  In  view  of  the  vast  extent  of  the  railroad  sys- 
tems of  this  country  and  the  magnitude  of  the  linancial  interests 
involved,  both  on  the  part  of  th-e  railroads  and  of  those  who  pay 
the  rates,  j^our  Commission  believes  that  the  possible  conse- 
quences of  such  a  system  of  regulation  are  too  serious  to  warrant 
its  adoption  at  the  present  time. 

6th.  Upon  the  whole,  your  Commission  believes  that  accurate 
knowledge  of  the  facts  concerning  the  issue  of  securities  and  the 
expenditure  of  tlieir  proceeds  is  the  matter  of  most  importance. 
It  is  the  one  thing  on  which  the  federal  government  can  effectively 
insist  today,  it  is  the  fundamental  thing  which  must  serve  as  a 
basis  for  whatever  additional  regulation  m^ny  be  desirable  in  the 
future. 

Arthur  T.   ITadley.   CJiairman. 
Frederick  N.  Judson 
Frederick  Strauss 
Walter  L.  Fisher 
Balthasar  II.  ]\Ieyer 


NATIONAL   SECURITIES   COMMISSION    REl'ORT,  705 


Suggestions  relating  to  publicity,  indicating  points  upon  which 
amendments  to  the  Act  to  Regulate  Commerce  might  be 
based.  This  Commission  has  not  considered  it  jjroper  to 
present  a  formal  draft  of  a  statute. 

That  every  railroad  corporation  subject  to  the  provisions  of 
the  Act  shall  file  with  the  Interstate  Commerce  Commission  on  or 
])rior  to  the  date  of  issuance  of  any  stocks,  bonds,  notes  or  other 
evidences  of  indebtedness  payable  at  periods  of  more  than  twelve 
months  after  the  date  thereof,  and  now  or  hereafter  to  be  au- 
thorized, a  certificate  of  notification  in  such  form  as  the  Commis- 
sion may  from  time  to  time  determine  and  prescribe  which  shall 
show: 

First:   (a)   The  total  amount  thereof  authorized. 

(b)  The  number  and  amount  tliereof  outstanding  prior 

to  the  date  of  such  certiHcate;  the  amount  there- 
of theretofore  retired;  the  amount  thereof  then 
undisposed  of,  and  whether  such  amount  is  held 
in  the  treasury  of  the  corporation  as  a  free  asset. 
or  pledged,  and  if  pledged,  the  terms  and  con- 
ditions of  such  pledge. 

(c)  The  number  and  amount  thereof  then  to  be  issued 

and  whether  to  be  sold,  pledged  or  held  in  the 
treasury  of  the  corporation  as  a  free  asset;  if 
such  securities  are  to  be  sold,  the  terms  of  sale, 
if  a  contract  for  such  sale  has  been  made,  and  if 
any  part  of  the  consideration  to  be  received  there- 
for is  other  than  money,  an  accurate  and  detailed 
description  thereof;  if  such  securities  are  to  be 
pledged,  the  terms  and  conditions  of  such  pledge. 

(d)  The  number  and  amount  thereof  remaining  unis- 

sued, 
(e)  If  the  issue  is  of  shares  of  stock,  the  certificate 
shall  also  show  the  par  value  thereof,  or  if  the 
issue  is  of  shares  of  sto'^-k  that  have  no  specified 
nominal  or  par  value,  the  number  of  such  shares, 
and  the  number  of  then  outstanding  shares  pre- 
viously issued, 
f^econd :  The  preferences  or  privileges  granted  to  the  holders 
of  any  such  shares  of  stock;  the  dates  of  maturity,  rates  of  inter- 
est of  any  such  bonds,  notes  or  other  evidences  of  indebtedness, 
and  any  conversion  rights  granted  to  the  holders  thereof,  and  the 
price,  if  any,  at  which  such  sharps  or  bonds  mav  be  redeemed. 
Whenever  any  securities  set  forth  and  described  in  any  certifi- 
cate of  notification  as  pleds-ed  or  held  as  a  free  asset  in  the  treas- 
ury of  the  corporation  shall  subsequent  to  the  filing  of  such  cer- 
45 


706  APPENDIX. 

tificate  be  sold  or  repledged  or  otherwise  disposed  of  by  the  cor- 
poration, such  corporation  shall  file  a  further  certificate  of  noti- 
fication to  that  etfeet,  setting  forth  therein  all  such  facts  as  are 
required  by  subdivision  (c)  of  the  foregoing  first  paragraph. 
The  provisions  in  regard  to  certificates  of  notification  shall  apply 
to  notes  or  evidences  of  indebtedness  running  for  periods  of 
twelve  months  or  less,  and  to  the  pledging  or  repledging  of  stocks, 
bonds  or  other  evidences  of  indebtedness  to  secure  such  notes  or 
evidences  of  indebtedness  running  for  periods  of  twelve  months 
or  less,  except  that  such  certificates  may  be  filed  within  ten  days 
after  the  issue  thereof  instead  of  on  or  prior  to  the  date  of  such 
issue. 

Every  such  railroad  corporation  shall  furnish  to  the  Commis- 
sion, at  such  time  or  times  as  the  Commission  may  require,  in  ad- 
dition to  its  income  account,  a  balanced  statement  of  its  receipts 
and  expenditures  on  capital  account,  and  of  the  surplus  of  the 
income  account  accruing  during  the  period  covered  by  such  state- 
ment, as  well  as  of  all  other  financial  transactions  that  have  taken 
place  during  such  period,  with  whom  had,  whether  in  cash,  in 
securities,  or  in  other  valuable  consideration. 

The  Commission  may  also  require  the  carrier  to  furnish  any 
further  statements  of  fact  or  evidence  that  it  may  deem  necessary 
or  appropriate. 

The  certificates  of  notification,  and  any  other  written  state- 
ment furnished  to  the  Commission  under  the  Act,  shall  be  signed 
and  verified  by  the  auditor,  comptroller,  or  other  acting  fiscal 
head  of  the  carrier. 

It  shall  be  the  duty  of  the  Commission  to  enforce  these  provi- 
sions, and  to  make  public  by  appropriate  means  the  information 
received,  as,  in  its  discretion,  it  may  deem  proper;  and  such 
certificates  of  notification  shall  at  all  times  be  deemed  public 
records  and  open  to  inspection. 

The  Commission  may  also  require  the  carrier  to  compile  for  the 
information  of  its  shareholders  such  facts  in  regard  to  the  finan- 
cial transactions  of  the  carrier  for  its  fiscal  year  in  such  form  as 
the  Commission  may  direct.  The  carrier  may  be  required  by 
order  of  the  Commission  to  disclose  every  interest  of  the  directors 
of  such  carrier  in  any  transaction  under  investigation.  The  Com- 
mission shall  have  the  power  to  investigate  all  such  transactions 
and  to  inquire  into  the  good  faith  thereof,  to  examine  the  books 
and  papers  of  carriers,  construction  or  other  companies  or  of 
firms  or  individuals  with  which  the  carrier  shall  have  had  finan- 
cial transactions,  for  the  purpose  of  enabling  it  to  verify  any 
statements  furnished,  and  to  examine  into  the  actual  cost  and 
value  of  property  acquired  by,  or  services  rendered  to,  such  car- 
rier. 

Appropriate  penalties,  including  fine  and  imprisonment, 
should  be  provided  for  violation  of  the  Act. 


INDEX  TO  REPORT 


[BEFEREXCtS  ARE  TO  PAGES.] 

1.  Railroad    Securities    and    Interstate    Commerce,    675. 

2.  Present  Requirements   and   Future   Policy,   676. 

3.  Ttieory  of  Railroad  Stock  Issues,   677. 

4.  State  Legislation   Regarding   Stock   Issues,   678. 

5.  Evasion  of  State  Laws,  678. 

6.  Danger  of  Evasion  of  Federal  Law,  679. 

7.  Enforced   Uniformity   not   yet   Attainable,    680. 

8.  Enforced  Publicity  Immediately  Needed,  681. 

9.  Mode   of  Procedure,   681. 

10.  Facts  to   be   Disclosed,   682. 

11.  Physical  Valuation,  683. 

12.  Results  to  be  Expected,  684. 

13.  Conflicts  of  Jurisdiction,   685. 

14.  Development  of   Intercorporate   Holding,   687. 

15.  Control  by   Intercorporate   Holding,   688. 

16.  Financial   Dangers,   689. 

17.  Alternative  Methods,  690. 

18.  Treatment  of  Existing   Issues,   691. 

19.  Price  of  New   Issues  of  Stock,   691. 

20.  Shares  Without  Par  Value,   692. 

21.  New  Issues  of  Bonds,  694. 

22.  Dividends   and   Reserve   Funds,   694. 

23.  Treatment   of    Intercorporate    Holdings,    696. 

24.  Unreasonable    and    Reasonable    Expectations,    697. 

25.  Promoters'  Profits  and  Services,  697. 

26.  Standardization   of   Railroad    Securities,    698. 

27.  Restoration   of  Public   Confidence,   699. 

28.  Amount  of  Additional  Capital  Required,   699. 

29.  Present  Return   and   Future   Security,   700. 

30.  What    Constitutes   a   Reasonable   Return,    701. 

31.  Points  to  be  Emphasized,  701. 

[707] 


TABLE  OF  CASES. 


[BEi'EBENCES  ABE  TO  PAGES.] 


Aeklen   v.  Thompson    (126    S.   W. 

730,  122  Tenn.  43),  62. 
Adair  v.  U.  S.  (208  U.  S.  161.  52  L. 

Ed.  436),  144. 
Adams   Express   Co.   v.   Kentucky 

(166  U.  S.  171,  41  L.  Ed.  960),  36. 
Adams   Express   Co.   v.   Kentucky 

(206  U.  S.  129,  51  L.  Ed.  987),  33. 
Adams   Express   Co.   v    Kentucky 

(214  U.  S.  218,  53  L.  Ed.  972),  34. 
Adams  v.  Ohio  (165  U.  S.  194,  41  L. 

Ed.  683),  36,  195. 
Addyston  Pipe  &  Steel  Co.  v.  U.  S. 

(175  U.  S.  211,  44  L.  Ed.  136,  29 

C.  C.  A.  141,  85  Fed.  271),  105, 

121,  125,  126,  130,  131,  139,  157, 

537,  545,  570. 
Aikens   v.   Wisconsin    (195   U.    S. 

194,  49  L.  Ed.  154),  205. 
Alabama  Rate  Case  (170  Fed.  225, 

161  Fed.  925),  186. 
Alabama  &  Vicksburg  Ry.  v.  Rail- 
road Comm.  (203  U.  S.  496.  51  L. 

Ed.  289),  204. 
Allen  V.  Flood  (67  L.  J.  Rep.  H.  of 

L.  98),  138,  155. 
Allen  V.  Oregon  Ry.  &  Nav.  Co.  (98 

Fed.  616),  371. 
Alexander  v.  U.  S.  (201  U.  S.  117, 

50  L.  Ed.  673),  565. 
Allis-Chulmers    v.    Iron    Molders' 

Union    (150   Fed.   155,    166   Fed. 

145),  146. 
Allis-Chalmers     Co.     v.     Reliable 

Lodge   (111  Fed.  264).  106,  146. 
Almy  V.  California  (24  How.  169, 

16  L.  Ed.  644,),  7,  15. 


American  Banana  Co.  v.  U.  Fruit 

Co.    (213    U.    S.    347,   53    L.    Ed. 

826),  549. 
American    Express    Co.    v.    Iowa 

(196  U.  S.  133,  49  L.  Ed.  417), 

31,  33. 
American  Express  Co.  v.  U.  S.  (212 

U.  S.   517,  53  L.  Ed.  635),   223, 

241,  515. 
American  Refrigerator  Transit  Co. 

V.  Hall  (174  U.  S.  70,  43  L.  Ed. 

899),  36. 
American  Steamship  Co.  v.  Louis- 
iana   (118  U.  S.  455,  30  L.  Ed. 

237),  7,  40,  53. 
American    Steel    &    Wire    Co.    v. 

Speed  (192  U.  S.  500,  48  L.  Ed. 

538).  30. 
American  Steel  &  Wire  Co.  v.  Wire 

Drawers,  etc  (90  Fed.  608),  146. 
American   T.   &   T.   Co.   v.   K.   C. 

Southern  R.  Co.   (175  Fed.  28), 

296. 
American  Tobacco  Co.  v.  U.  S.  (221 

U.  S.  106),  125. 
American  Union  Coal  Co.  v.  Penn. 

Ry.  Co.  (159  Fed.  278),  427. 
Ames  V.  American  Tel.  &  Tel.  Co. 

(166  Fed.  820),  564.  573. 
Anderson  v.  U.  S.   (171  U.  S.  604, 

43  L.  Ed.  300,  82  Fed.  529),  126, 

541. 
Arbuckle  v.  Blackburn    (51  C.  C. 

A.  122,  113  Fed.  616.  65  L.  R.  A. 

864).  19. 
Arkansas  Brokerage  Co.  v.  Dunn 

(173  Fed.  899),  137,  549. 
Arkansas    Rate    Case     (163    Fed. 

141),  191,  193,  196,  197,  198.  199. 
[709] 


710 


TABLE   OF   CASIES. 


[eeferences  aee  to  pages.] 


Armour  r.  Augusta  (67  S.  E.  417), 
60. 

Armour  v.  U.  S.  (209  U.  S.  56,  52 
L.  Ed.  681),  402,  528. 

Arnold  v.  Yanders  (Ohio)  (47  N. 
E.  50,  47),  61. 

Arthur  v.  Oakes  (11  C.  C.  A.  209, 
63  Fed.  310),  145,  158,  159,  434. 

Asbell  V.  Kansas  (209  U.  S.  251, 
52  L.  Ed.   778),   51. 

Asher  v.  Texas  (128  U.  S.  129,  32 
L.  Ed.  268),  35. 

Atchinson  T.  &  S.  F.  Co.  v.  Den- 
ver, &  N.  O.  R.  Co.  (110  U.  S. 
667,  28  L.  Ed.  281),  202,  371. 

Atchison  T.  &  S.  F.  Co.  v.  Love 
(177  Fed.  403),  186. 

Atchison  T.  &  S.  F.  R.  Co.  v.  Com- 
mission (188  Fed.  229),  233,  495. 

Atchison  T.  &  S.  F.  R.  Co.  v.  Mat- 
thews (174  U.  S.  96,  13  L.  Ed. 
909),  208. 

Atchison  T.  &  S.  F.  R.  Co.  v.  U.  S. 
(170  Fed.  251),  531. 

Atlanta  v.  Chattanooga  Foundry  & 
Pipe  Co.  (127  Fed.  25),  572. 

Atlantic  Coast  Line  Co.  v.  Fla. 
(203  U.  S.  256,  51  L.  Ed.  174), 
190,  193. 

Atlantic  Coast  Line  Co.  v.  Garaty 
(166  Fed.  10),  238. 

Atlantic  Coast  Line  Co.  v.  Ma- 
zursky),  216  U.  S.  122,  54  L.  Ed. 
11),  49. 

Atlantic  Coast  Line  Co.  v.  N.  C. 
Corp.  Com.  (206  U.  S.  1,  51  L. 
Ed.  931,  137  N.  C.  18),  204. 

Atlantic  Coast  Line  R.  R.  Co.  v. 
Riverside  Mills  (219  U.  S.  186, 
55  L.  Ed.  167),  416,  509. 

Atlantic  Coast  Line  Co.  v.  Whar- 
ton (207  U.  S.  328,  52  L.  Ed. 
330),  47. 

Atlantic  etc.  Tel.  Co.  v.  Philadel- 
phia (190  U.  S.  160,  47  L.  Ed. 
S95).  37. 


Atwater  v.  Railroad  Co.   (48  N.  J. 

Law,  65),  284. 
Augusta      Southern     R.     Co.     v. 

Wrightsville  &  S.  R.  Co.  (74  Fed. 

522),  264,  375. 
Austin    v.    Tennessee    (179    U.    S. 

343,  45  L.  Ed.  224),  20,  31. 
Avinger  v.  South  Car  R.  Co.  (29  S. 

C.  265),  284. 


B. 


Ball,  The  Daniel  (10  Wall.  557,  19 

L.  Ed.  999),  24. 
Baltimore  &  O.  R.  Co.  v.  Hambur- 
ger (155  Fed.  849),  407. 
B.  C.  R.  &  N.  R.  Co.  V.  Northwest- 
ern Fuel  Co.   (31  Fed.  652),  281. 
B.   &   O.   R.   Co.  V.   Inter.   Comm. 

Com.  (215  U.  S.  216),  581. 
B.  &  O.  R.  Co.  V.  L  C.  C.  (221  U.  S. 

612,  55  L.  Ed.  878),  102,  624. 
B.  &  O.  R.  Co.  V.  U.  S.   (215  U.  S. 

481,  54  L.  Ed.  292),  78,  82,  422, 

520. 
B.  &  O.  S.  W.  R.  Co.  V.  U.  S.  (220 

U.  S.  94,  55  L.  Ed.  384,  159  Fed. 

33),  630. 
Bangor  v.  Smith  (83  Me.  422),  61. 
Bannon  v.  U.  S.  (156  U.  S.  464,  3& 

L.  Ed.  494),  152. 
Barnes  v.  Berry  (156  Fed.  72),  146. 
Barney  v.  City  of  New  York  (193 

U.  S.  430,  48  L.  E.  737),  179. 
Barrow  S.  S.  Co.  v.  Kane  (170  U. 

S.  Ill,  42  L.  Ed.  964),  178. 
Baxendale  v.  Railway  Co.  (4  C.  B. 

N.  S.  63),  280. 
Beavers  v.  Henkel   (194  U.  S.  73, 

48  L.  Ed.  882),  437. 
Beers  v.  Wabash  St.  L.  &  Pac.  R. 

Co.  (34  Fed.  244),  434. 
Pehlmer  v.  L.  &  N.  R.  Co.  (175  U. 

S.  648,  44  L.  Ed.  309),  225,  258, 

381,  409,  462. 


T^SJBLE   OF   CASES. 


711 


[references  are  to  pages.] 


Bement   v.    National    Harrow    Co. 

(18G  U.   S.   70,  46   L.  Ed.   1058), 

139,  550,  576. 
Renedict  v.  Construction   Co.    (49 

N.  J.  Eq.  429),  23. 
Berkowitz   v.    U.   S.   C.   C.   A.    (93 

Fed.  452),  152. 
Bessette  v.  Conkey  Co.   (194  U.  S. 

324),  164,  166,  167,  169. 
Bigbee  Packet  Co.  v.  M.  &  O.  R. 

Co.   (60  Fed.  545),  358. 
Bigelow  V.  Calumet  Co.   (167  Fed. 

721,  704  S.  P.  322),  542,  564. 
Block  V.  Standard  District  Co.  (95 

Fed.  478),  563. 
Blunt  Mfg.  Co.  V.  Yale  &  Towne 

Mfg.  Co.  (166  Fed.  555),  551. 
Board    of    Trade    of    Chicago    v. 

Christy  etc.  Co.    (198  U.  S.  236, 

48  L.  Ed.  1031),  542. 
Bobbs  Merrill  v.  Strauss  (210  U.  S. 

339,  52  L.  Ed.  1086),  139. 
Boehring  v.  Chesapeake  Beach  R. 

Co.    (193   U.   S.    442,   48   L.    Ed. 

742),  306. 
Bogardous  v.   Insurance  Co.    (101 

N.  Y.  329),29. 
Booth  V.  Davis  (127  Fed.  875),  545. 
Boston  Beer  Co.  v.   IMass.    (97  U. 

S.  25,  24  L.  Ed.  989),  19. 
Bowman  v.  Railway  Co.  (125  U.  S. 

465,  31  L.  Ed.  700),  30,  57,  62,  65. 
Boyer  v.  Western  Union  Telegraph 

Co.  (124  Fed.  246),  154. 
Brass  v.  North  Dakota  (153  U.  S. 

391,  38  L.  Ed.  757),  68. 
Brennan  v.  Titusville    (153  U.  S. 

289,  38  L.  Ed.  719),  35. 
Brewer  v.  Central  R.  Co.  of  Geor- 
gia (84  Fed.  257),  319. 
Briggs  V.  C.  N.  &  W.  R.  Co.   (125 

Fed.  745),  591. 
Brimmer  v.  Rebman  (138  U.  S.  78, 

34  L.  Ed.  862),  51. 


Erimson   v.    Interstate   Commerce 

Commission    (154   U.   S.   447,   38 

L.  Ed.  1047),  449. 
Brown  v.  Houston  (114  U.  S.  622, 

29  L.  Ed.  257),  30. 
Brown  v.  Maryland  (12  "Wheaton, 

419,  6  L.  Ed.  678),  30,  35,  101. 
Brown  v.  Spillman  (155  U.  S.  665, 

39  L.  Ed.  .104),  23. 

Brown  v.  Walker    (161  U.  S.  591, 

40  L.  Ed.  819),  443. 

Budd  V.  New  York  (143  U.  S.  517, 

36  L.  Ed.  247),  68. 
Buell  V.  C,  M.  &  St.  P.  R.  Co.   (1 

Wis.  Com.  R.  324),  197. 
Burlington,  C.  R.   &  N.  R.   Co.  v. 

Dey  (82  Iowa,  312),  249. 
Burrell  v.  Montana  (194  U.  S.  572, 

48  L.  Ed.  1122),  449. 
Butchers   &   Drovers   Stock  Yards 

Co.  V.  L.  N.  R.  Co.   (14  C.  C.  A. 

290,  31  U.  S.  App.  252,  67  Fed. 

35),  236,  310,  354,  360,  376. 
Butfield  V.   Stranahan    (192  U.  S. 

470,  48  L.  Ed.  525),  93. 
Butler  Bros.  v.  U.   S.  Rubber  Co. 

(156  Fed.  1),  13,  28. 


C. 


Caldwell   v.   North   Carolina    (187 

U.  S.  622,  47  L.  Ed.  326),  35. 
California  v.  Pacific  R.  Co.  (127  U. 

S.  1,  32  L.  Ed.  150),  88,  109. 
Callan  v.  Wilson    (127  U.  S.   540, 

32  L.  Ed.  223),  152. 
Camden  Iron  Works  v.  U.  S.  (158 

Fed.  561),  529. 
Capital    City    Dairy    Co.    v.    Ohio 

(183  U.  S.  238,  46  L.  Ed.  171),  18. 
Carew   v.    Rutherford    (106    Mass. 

1),156. 
Cardwell  v.  American  Bridge  Co. 

(113  U.  S.  205,  28  L.  Ed.  959), 

41. 


712 


TABLE    OF    CASES. 


[references  are  to  pages.] 


Carter  v.  Commonwealth   (96  Va. 

791), 165. 
Carterville  L.  &  N.  Co.  v.  Carter- 

ville  (114  Fed.  699),  185. 
Case  of  Monopolies  (11  Coke  Rep. 

84b,  99,  101),  132,  140. 
Casey  v.  Central  Typo  Union   (45 

Fed.  135),  156. 
Central  R.  Co.  v.  Interstate  Com- 
merce   Commission    (206    U.    S. 

441,  51  L.  Ed.  1128),  256. 
Central   Stock  Yards  Co.  v.   L.  & 

N.  R.  Co.    (192  U.   S.   568,  48  L. 

Ed.  565,  55  C.  C.  A.  63,  112  Fed. 

823,  118  Fed.  113),  236,  371,  376, 
419. 

Central    Union    Tel.    Co.    v.    State 

(118  Ind.  194),  14. 
Central   of   Georgia  v.    McLendon 

(157  Fed.  961),  182,  186. 
Central  of  Ga.  R.  R.  Co.  v.  Murphy 

(196  U.  S.  194,  49  L.  Ed.   444), 

57. 
Charge  to  Grand  Jury    (151  Fed. 

834),  554. 
Charge   to    Grand    Jury    (62    Fed. 

824,  828,   834,   66   Fed.   146,   115 
Fed.  588),  146.  305,  435,  54'9,  554. 

Charles  v.  Missouri  Pac.  R.  Co. 
(168  Mo.  652),  73. 

Chattanooga  Foundry  Co.  v.  At- 
lanta (203  U.  S.  390,  51  L.  Ed. 
241),  572. 

Cherokee  Nation  v.  Georgia  (5 
Peters,  1,  8  L.  Ed.  25),  6. 

Cherokee  Nation  v.  Kansas  R.  Co. 
(135  U.  S.  641,  34  L.  Ed.  295),  6. 

Chesapeake  &  O.  R.  Co.  v.  Ken- 
tucky (179  U.  S.  388,  45  L.  Ed. 
244),  45. 

Chesapeake  &  O.  v.  Standard  Lbr. 
Co.    (174  Fed.  107),  296. 

Chicago  Board  of  Trade  v.  Christie 
G.  &  S.  Co.  (198  U.  S.  236,  49  L. 
Ed.  103),  542. 


Chicago  &  Alton  R.  Co.  v.  U.   S. 

(156  Fed.  558),  533. 
Chicago  Burlington  &  Q.  R.  Co.  v. 

B.  C.  R.  &  N.  Co.   (34  Fed.  481), 
434. 

Chicago,  B.  &  Q.  Co.  v.  U.  S.  (220 

U.  S.  559,  55  L.  Ed.  582,  170  Fed. 

556),  593. 
C.  C.  &  I.  R.  Co.  V.  Closser    (126 

Ind.  348,  9  L.  R.  A.  754),  281. 
C.  C.  &  A.  R.  Co.  V.  Gebbes  (142  U. 

S.  386,  35  L.  Ed.  1051),  172. 
Chicago,  B.  &  Q.  Co.  v.  U.  S.   (157 

Fed.  830,  209  U.  S.  90,  52  L.  Ed. 

698),   529. 
C,  I.  &  R.  Co.  V.  U.  S.   (219  U.  S. 

486,  55  L.  Ed.  305,  163  Fed.  114), 

242. 
Chicago  R.   I.  &  P.  R.  Co.   v.  Ar- 
kansas  (219  U.  S.  453,  55  L.  Ed. 

290,  86  Ark.  412),  45,  205,  209. 
Chicago  &  Grand  Trunk  R.  Co.  v. 

Minnesota   (134  U.  S.  418,  33  L, 

Ed.  970),  181,  190. 
Chicago  etc.  R.  Co.  v.  Solan   (169 

U.  S.  133,  42  L.  Ed.  688),  43,  50, 

55. 
Chicago  etc.  R.  Co.  v.  Suffern  (129 

111.  274),  284,  354. 
Chicago    M.    &    St.    P.    R.    Co.    v. 

Becker  (32  Fed.  849),  225. 
Chicago    M.    &    St.    P.    R.    Co.    v. 

Becker   (35  Fed.  883),  178. 
Chicago    M.    &    St.    P.    R.    Co.    v. 

Tompkins    (176  U.  S.  167,  44  L. 

Ed.  417,  110  Fed.  473),  181,  190, 

285. 
Chicago  etc.  R.  Co.  v.  Voelker  (129 

Fed.  522,  116  Fed.  867),  591. 
Chicago  M.  &  St.  P.  R.  Co.  v.  Wal- 
lace   (66   Fed.   506,  14   C.   C.   A. 

257,  30  L.  R.  A.  261),  290. 
C.  N.   O.  &  T.  P.  R.  Co.  V.  I.   C. 

C.  (162  U.  S.  184,  40  L.  Ed.  935), 
231. 


TABLE   OP   CASES. 


713 


[befebences  abb  to  pages.] 


Chicago  &  G.  T.  R.  Co.  v.  Wellman 

(143  U.   S.  339,   36  L.   Ed.   176). 

190,  193. 
Chicago  &  N.  W.  R.  Co.  v.  Dey  (35 

Fed   866),  172. 
CJhilds  V.  Chesapeake  &  O.  R.  Co. 

(218  U.  S.  71,  54  L.  Ed.  936).  46. 
Chinese  Exclusion  Acts  (130  U.  S. 

581,   32   L.    Ed.    1068,   149   U.    S. 

698,  37  L.  Ed.  905),  9. 
Chy  Lung  v.   Freeman    (92   U.   S. 

275,  23  L.  Ed.  550),  18. 
Cilley  V.  United  Shoe  Machine  Co. 

(152  Fed.  726),  573. 
Cincinnati  etc.  Co.  v.  Bay  (200  U. 

S.  179,  50  L.  Ed.  428),  128,  543. 
Cincinnati    Freight    Bureau    Case 

(167  U.   S.  479,  42  L.  Ed    243), 

78,  251. 
Cincinnati  N.  O.  &  St.  P.  R.  Co.  v. 

Commission    (162  U.   S.   184,  40 

L.  Ed.  935),  220,  224. 
City   of   Memphis   v.   Cumberland 

Tel.  &  Tel.  Co.  (218  U.  S.  624,  54 

L.  Ed.  1185),  179. 
City  of  Newton  v.  Lewis  (79  Fed. 

715),  185. 
Claflin  V.  Houseman  (93  U.  S.  130, 

23  L.  Ed.  833),  72. 
<;iay  V.  Waters  (178  Fed.  385),  166. 
Clement  v.   L.   &  N.   R.   Co.    (153 

Fed.  979).  423. 
Cleveland  C.  C.  &  St.  L.  R.  Co.  v. 

Backus  (154  U.  S.  439.  38  L.  Ed. 

1041),  30. 
Cleveland  C.  C.  &  St.  L.  R.  Co.  v. 

Illinois  (177  U.  S.  514,  44  L.  Ed. 

868),  47. 
Clune  V.  United  States  (159  U.  S. 

590,  40  L.  Ed.  69),  152,  153. 
Coe  V.  Errol   (116  U.  S.  517,  29  L. 

Ed.  715),  32. 
Coeur  d'  Alene  C.  Mfg.  Co.  v.  Min- 
ers' Union  (51  Fed.  260).  146. 
Colasorda  v.  Central  R.  of  N.   J. 

(180  Fed.  832),  619. 


Cohens   v.   Virginia    (6   W.ieaton, 

264,  5  L.  Ed.  257).  116. 
Collins  V.  New  Hampshire  (147  U. 

S.  31,  43  L.  Ed.  60),  18. 
Columbia    Wire    Co.    v.    Freeman 

Wire  Co.   (71  Fed.  302).  576. 
Columbus  Iron  &  S.  Co.  v.  Kana- 
wha &  N.  R.  Co.  (171  Fed.  713). 

425. 
Commonwealth    v.    Caldwell    (190 

Mass.  355).  61. 
Commonwealth  v.  Hay  Co.  (104  S. 

W.  229).  60. 
Commonwealth    v.    Hunt    (4    Met- 

calf.  111).  151. 
Conner  v.  V.  &  M.  R.  Co.  (36  Fed. 

273),  418. 
Connolly  v.   Sewer  Pipe  Co.    (184 

U.   S.  540,  46  L.  Ed.   679),   206. 

575. 
Consolidated  Steel  &  Wire  Co.  v. 

Murray  (80  Fed.  811),  146. 
Continental     Wallpaper      Co.      v. 

Voight  (212  U.  S.  227.  53  L.  Ed. 

486),  575. 
Conway  v.  Taylor's  Executors    (1 

Black,  603,  17  L.  Ed.  191).  88. 
Cook  v.  County  of  Marshall   (196 

U.    S.    261.   49    L,    Ed.   491),   31, 

209. 
Cook  V.  Railway  Co.  (81  Iowa,  551, 

9  L.  R.  A.  764),  248,  284,  417. 
Cooley  V.  Board  of  Wardens    (12 

Howard,  299,  13  L.  Ed.  996),  39, 

40. 
Cooper  Mfg.  Co.  v.  Ferguson   (113 

U.  S.  237,  28  L.  Ed.  272),  28. 
Copp  v.  L.  &  N.  R.  Co.    (50  Fed. 

164),  416. 
Copp  V.  Railway  Co.  (43  La.  Ann. 

511,  12  L.  R.  A.  725),  73. 
Cotting  V.  Kansas  City  Stockyards 

Co.  et  al.  (183  U.  S.  79,  46  L.  Ed. 

92),  208,  253. 
Council  Bluffs  v.  Railway  Co.   (45 

Iowa,  338),  60. 


714 


TABLE    OF    CASES. 


[BEFERENCES  ABE  TO  PAGES.] 


Councilman  v.  Hitchcock  (142  U. 

S.  547,  35  L.  Ed.  1110,  44  Fed. 

271),  442,  444. 
Cound  V.  A-  T.  &  S.  F.  Ry.  Co.  (173 

Fed.  527),  618. 
County  of  Mobile  v.  Kimball  (102 

U.  S.  691,  26  L.  Ed.  238),  41. 
Covington  etc.  Bridge  Co.  v.  Ken- 
tucky  (154  U.  S.  204,  38  L.  Ed. 

962),  14,  40,  55,  88. 
Covington   &  Lexington  Turnpike 

Co.  V.   Sanford    (164  U.   S.   578, 

41  L.  Ed.  560),  181,  191,  200,  252, 

253. 
Covington  Stockyards  Co.  v.  Keith 

(139   U.  S.  128,   35   L.   Ed.   73), 

236,  238,  375. 
Cowden  v.  Pacific  Coast  S.  S.  Co. 

(94  Cal.  470.  18  L.  R.  A.  221), 

280. 
Cowen  v.  Bond  (39  Fed.  59),  302. 
Crandall  v.   Nevada    (6   Wall.   35, 

18  L.  Ed.  745),   37. 
Crawford  v.  Railroad  Co.  (10  Am. 

Neg.  Repts.  166),  589. 
Crescent  Liquor  Co.  v.  Piatt  (148 

Fed.  894),  34. 
Crossman  v.  Lurman    (192   U.   S. 

189,  48  L.  Ed.  401),  18. 
Crutcher  v.  Kentucky   (141  U.  S. 
^  47,  35  L.  Ed.  649),  27,  114. 
Crump  v.  Commonwealth   (84  Va. 

927),  156. 


Delaware  etc.  Co.  v.  Kutter    (147 

Fed.  51),  545. 
Delaware    etc.    Co.    v.    Interstate 

Comm.  Com.    (166  Fed.  499,  155 

Fed.  512,  159  Fed.  894),  293. 
Delaware  etc.  Co.  v.  Switchmens' 

Union  (158  Fed.  541),  146. 
Del.  L.  &  N.  Co.  V.  Stevens    (172 

Fed.  595),  204. 
Delk  V.  St.  Louis  &  St.  F.  R,  Co. 

(220  U.   S.   617,   55   L.  Ed.  — ), 

593. 
Denver  &  Rio  Grande  R.  Co.  v.  Ar- 

right    (129   Fed.   347),  277,   604. 
Denver   &   Rio    Grande   R.    Co.   v. 

Baer  Bros.  Mercantile  Co.    (187 

Fed.  485),  487. 
Dewberry    v.    Southern    Ry.    (175 

Fed.  307),  53. 
Diamond  Glue  Co.  v.  United  States 

Glue  Co.  (103  Fed.  838),  15. 
Diamond  Match  Co.  v.  Ontonogon, 

(188  U.  S.  82,  47  L.  Ed.  394),  31. 
Donovan  v.  Pennsylvania  Co.  (199 

U.  S.  279,  50  L.  Ed.  192),  377. 
Dooley  v.   United   States    (183   U. 

S.  151,  46  L.  Ed.  128),  7. 
Doremus    v.    Hennessy     (176    111. 

608),  156. 
Dow  V.  Bidehnan  (125  U.  S.  680,  31 

L.  Ed.  841),  190. 
Duncan   v.   Maine  Central  R.  Co. 

(113  Fed.  508),  305. 


E. 


Davis  V.  C.  C.  C.  &  St.  L.  R.  Co. 

(217  U.  S.  157,  54  L.  Ed.  708), 

58. 
Davis  v.  United  States   (104  Fed. 

136,  43  C.  C.  A.  448),  436. 
Decker  v.  Railroad   Co.    (30   Fed. 

723),  109. 
Delaware.  The   (161  U.  S.  471,  40 

L.  Ed.  776),  48. 


East  Tenn,  etc.  R.  Co.  v.  Commis- 
sion (181  U.  S.  1.  1.  C.  27.  45  L. 
Ed.  719,  729,  39  C.  C.  A.  413,  99 
Fed.  52),  317,  381,  462. 

Easton  v.  Iowa  (188  U.  S.  220,  47 
L.  Ed.  452),  113. 

Edmunds  v.  111.  Cent.  R.  Co.  (80 
Fed.  78),  73,  417. 

Elder  v.  Whiteside  (72  Fed.  724),. 
146. 


TABLE   OP   CASES. 


715 


[befekences  are  to  rA(;rs.] 


ElllB  T.  Inman  (124  Fed.  956),  545. 
El   Paso  &  N.  R.   Co.   v.   Gutirrez 

(215  U.  S.  87,  54  L.  Ed.,  p.  551), 

614. 
Equitable   Ass.    Soc.    v.    Clements 

(140  U.  S.   226,  35  L.  Ed.  497), 

29. 
Erb  V.  Morasch  (177  U.  S.  584,  44 

L.  Ed.  897).  45,  228. 
Erie  R.  Co.  v.  Pennsylvania   (158 

U.  S.  431,  39  L.  Ed.  1043),  35. 
Erie  R.  Co.  v.  Pond  Creek  etc.  Co. 

(162  Fed.  878),  48. 
Erie  R.  Co.  v.  Russell    (183  Fed. 

722),  595. 
Escanaba  Co.  v.  Chicago  (107  U.  S. 

678,  27  L.  Ed.  442),  25,  41. 
Evershed  v.  London  &  N.  W.  R.  Co. 

(L.  R.  3  Q.   B.  D.   35).  283. 
Ex  parte  Benson  (18  S.  C.  38),  280. 
Ex    parte    Eaglesfield     (180    Fed. 

558),  24. 
Ex  parte  Koehler    (31  Fed.   315), 

515. 
Ex  parte  Tjcnnon   (166  U.  S.  548, 

41  L.  Ed.  1110),  165,  420. 
Ex  parte  Massey  (92  S.  AV.  1086), 

62. 
Ex   parte   Robinson    (19   Wallace, 

505,  22  L.  Ed.  205).  165. 
Ex  parte  Young    (209  U.  S.  129), 

176,  179,  182,  183.  184,  185. 
Express  Company  Cases  (117  U.  S. 

1,  29  L.  Ed.  791),  222. 

F. 
Fairbanks  y.   United   States    (181 

U.  S.  283,  45  L.  Ed.  862),  15. 
Fanning  v.  Gregorie   (16  Howard, 

524,  14  L.  Ed.  1043),  88. 
Fargo  V.  Hart   (193  U.  S.  490,  48 

L.  Ed.  761).  36. 
Farls  V.  Henderson  (4  Okla.  384), 

61. 
Farmers'    Loan    &    Trust    Co.    v. 

Northern  Pac.  R.  Co.   (83  Fed. 

249),  252. 


Farmers'    etc.    National    Bank    v. 

Deering  (91  U.  S.  29,  23  L.  Ed. 

196),  109. 
Fidelity   &   Guarantee   Co.,   U.    S. 

to  use,  V.   (178  Fed.  721),  27. 
Field  V.  Barber  Asphalt  Co.    (194 

U.  S.  618,  48  L.  Ed.  1142),  542. 
Field  V.  Clark   (143  U.  S.  649,  36 

L.  Ed.  294),  93. 
Fitchburg  R.  Co.  v.  Gage  (12  Gray, 

393),  284. 
Fitts  V.  McGhee  (172  U.  S.  516,  43 

L.  Ed.  535),  182. 
Flint    V.    Stone-Tracy    Co.    (1911) 

(220   U.   S.   107,   55   L.   Ed.   — ), 

108. 
Foppiano  v.  Speed  (199  U.  S.  501. 

50  L.  Ed.  288),  34. 
Foote  V.  Buclianan  (113  Fed.  156). 

577. 
Foster  v.  C.  C.  &  I.  R.  Co.  (56  Fed. 

434),  337. 
Fowle  V.  Park   (131  U.  S.  88,  97, 

33  L.  Ed.  74),  139. 
Freight  Association  Case   (166  U. 

S.  290,  41  L.  Ed.  1007).  536. 
Ft.  Leavenworth  Ry.  Co.  v.  Love 

(114  Fed.  525),  42. 
Fretz  V.  Bull  (12  Howard,  466,  13 

L.  Ed.  1068),  24. 
Fulgham  v.   Midland   Valley    (167 

Fed.  660),  53,  618,  621. 


Galveston,  etc.  Co.  v.  Davidson  (93 

S.  W.  436),  62. 
Galveston  etc.  Co.  v.  Texas  (210  U. 

S.  217,  52  L.  Ed.  1131),  36. 
Gamble-Robinson  Com.  Co.  v.  C5.  & 

N.  W.  Ry.   Co.    (168   Fed.  161), 

372. 
Gardner  v.    Early    (69    Iowa,   40). 

446. 
Garrison    v.    Tillinghast    (18    CaL 

404),  60. 


ne 


TABLE    OF    CASES. 


[references  are  to  pages.] 


(Steer  v.  Connecticut  (161  U.  S.  519, 

40  L.  Ed.  793),  20. 
Genesee   Chief,  The    (12   Howard, 

443,  13  L.  Ed.  1058),  24. 
Georgia  Fruit  Exchange  Case   (20 

I.  C.  C.  R.   623),  239. 
Georgia  Peach  Growers'  Case   (10 

I.  C.  C.  R.  255),  239. 
Gibbes    v.    Consolidated    Gas    Co. 

(130  U.  S.   397,  32  L.  Ed.  979), 

130,  139. 
Gibbes  v.  McNeeley    (55   C.   C.  A. 

70,   118   Fed.   120,   107  Fed.  210, 

102  Fed.  594),  132,  540,  572. 
Gibbons  v.  Ogden    (9  Wheaton,  1, 

6  L,  Ed.  23),  11,  12. 
Gilbert  v.  Burlington  C.  R.  &  N. 

R.  Co.    (128  Fed.  529,  123  Fed. 

832),  603. 
Gilman   v.   Philadelphia    (3   Wall. 

724,  18  L.  Ed.  99),  14. 
Gladson  v.  Minnesota    (166  U.  S. 

427,  41  L.  Ed.  1064),  46. 
Globe  Electric  Co.  v.  Andrew  (144 

Fed.  871),  57. 
Gloucester  Ferry  Co.   v.   Pennsyl- 
vania  (114  U.  S.  196,  29  L.  Ed. 

158),  41,  88. 
Gompers  v.  Buck  Stove  &  Range 

Co.    (221   U.    S.    418,    55   L.    Ed. 

797),  148,  168. 
Goshen  Rubber  Co.  v.  Single  Tube 

etc.  Co.  (166  Fed.  431),  551. 
Grand  Rapids  &  Ind.  R.  Co.  v.  Os- 
borne   (193  U.  S.   17,  48  L.  Ed. 

598),  203. 
Granger  Cases  (94  U.  S.  113,  24  L. 

Ed.   77),   247. 
Great  Northern  v.  U.  S.  (208  U.  S. 

452,  52  L.  Ed.  567),  527. 
Great  Western  R.  Co.  v.  Sutton  (L. 

R.   4   H.   L.   226,   228),   280,   284, 

293. 
Green  v.  Henkel  (183  U.  S.  249.46 

L.  Ed.  177),  437. 


Greenlee  v.  Southern  Ry.  Co.  (122 

S.  C.  982,  41  L.  R.  A.  99),  588. 
Griffen    v.    Pipe    Lines     (172    Pa. 

580),  220. 
Groves    v.    Slaughter    (15    Peters, 

449,  505,  10  L.  Ed.  800,  821),  6. 
Gulf,  Colo.  &  S.  F.  R.  Co.  v.  Heffley 

(158  U.  S.  98,  39  L.  Ed.  910),  44, 

399,  401. 
Gulf,  Colo.  &  S.  F.  R.  Co.  V.  Miami 

S.  S.  Co.  (30  C.  C.  A.  142,  86  Fed. 

407),  121,  372,  563. 
Gulf  C.  &  S.  Co.  V.  Texas  (204  U. 

S.  403,  51  L.  Ed.  540),  230. 
Gulf,  Colo.  &  S.  F.  R.  Co.  V.  Moore 

(Tex.)     (83    S.    W.    Rep.    362), 

73. 


H. 


Habits  of  Monopolies  (21  Jas.  I,  C. 

3),  132. 
Hagan  v.  Blindell  (6  C.  C.  A.  86,  56 

Fed.  696),  563. 
Hague    V.    Wheeler    (157    Pa.    St. 

324),  23. 
Hale  V.  Henkel  (201  U.  S.  43,  50  L. 

Ed.  652),  445,  446. 
Hale  V.   O'Connor   Coal   Co.    (181 

Fed.   267),   544. 
Hall  V.  Decuer  (95  U.  S.  485,  24  L. 

Ed.  547),  45,  46,  101. 
Hamilton  Gas  Light  Co.  v.  Ham- 
ilton City   (146  U.  S.  258,  36  L. 

Ed.    963),    179. 
Hammond  Pack  Co.  v.  Ark.    (212 

U.  S.  322,  53  L.  Ed.  530,  81  Ark. 

519),  207. 
Handy  v.  C.  &  N.  R.  Co.   (31  Fed. 

689),  281. 
Hanley  v.  Kansas  City  S.  R.  Co. 

(187  U.  S.  617,  47  L.  Ed.  333), 

14,  226. 
Hannibal  Bridge  Co.  v.  U.  S.  (221 

U.  S.  194,  55  L.  Ed.  699),  94. 


TABLE   OP   CASES. 


717 


[BEFEBENCES  ABE  TO  PAGES.] 


Hardware  Co.  v.  Pottery  Co.   (120 

S.  W.  1088).  G2. 
Harman  v.  Chicago  (147  U.  S.  396, 

37  L.  Ed.  216),  41. 
Harp  V.  Choctaw  O.  &  G.  R.  R.  Co. 

(61  C.  C.  A.  405,  125  Fed.  445, 

118  Fed.  109),  342,  354. 
Harrinian  v.  Inter.  Comm.  Co.  (211 

U.  S.  407.  53  L.  Ed.  253,  157  Fed. 

432),  451,  455. 
Hayes    v.    Pennsylvania    Co.     (12 

Fed.  309),  282. 
Head  Money  Cases  (112  U.  S.  580, 

28  L.  Ed.  798),  108. 
Henderson  Bridge  Co.  v.  Hender- 
son   (173   U.    S.    592,   43    L.   Ed. 

823),  14. 
Henderson  Bridge  Co.  v.  Kentucky 

(166   U.  S.   150,  41  L.  Ed.   953), 

14,  36. 
Henderson  v.  Mayor  (92  U.  S.  1.  c. 

273,  23  L.  Ed.  556),  39. 
Henderson  v.  New  York  (92  U.  S. 

259,  23  L.  Ed.  543),  18. 
Hennington  v.  Georgia  (163  U.  S. 

299,  41  L.  Ed.  166),  44,  66. 
Herndon  v.  C.  R.  I.  &  P.  (157  Fed. 

783,   217  U.   S.   135),  47.   66. 
Higgins    V.    Casks    of   Lime    (130 

Mass.  1),  61. 
Hilton  Lumber  Co.  v.  Railroad  Co. 
(N.  C),    (60  C.  L.  J.  301),  283. 
Hite  V.  Central  Ry.  N.  J.  (171  Fed. 

307),  233. 
Hitchcock  V.  Counselman    (142  U. 

S.  457,  35  L.  Ed.  1110),  428. 
Hooker  et  al  v.  Commission  (Com. 

C),  (188  Fed.  242),  268. 
Hooper   v.    California    (155    U.    S. 

647,  39  L.  Ed.  297),  17. 
Hoover  v.  Pennsylvania   (156  Pa. 
St.  220,  23  L.  R.  A.  23),  282,  287. 
Hopkins  v.  Oxley  Stave  Co.  (28  C. 

C.  A.  99.  83  Fed.  99),  146.  155. 
Hopkins  v.  United  States    (171  U. 
S.   578   1.   c.   593.   43   L.   Ed.   290, 
296),  126,  149.  434,  540. 


H.  &  T.  C.  R.  Co.  V.  Mayes  (201  U. 

S.  321.  50  L.  Ed.  772).  49. 
Houston  etc.  Co.  v.  Story  (149  Fed. 

499),  184. 
Houston  etc.  Co.  v.  U.  S.  (168  Fed. 

895),  630. 
Howard   v.    HI.    Cent.    (207    U.    S. 

463,  52  L.  Ed.  297),  95,  613. 
Howard  Supply  Co.  v.  Chesapeake 

&  O.  (162  Fed.  188).  423. 
Hoxie  V.  N.  Y.  &  N.  H.  R.  Co.   (82 

Conn.    352),   75,   492,   620. 
Hudson  County  "Water  Co.  v.  Mc- 

Carter    (209   U.   S.   249,  52  Fed. 

828,   70   N.   J.   Eq.   695),   21.    . 
Huse  V.  Glover  (119  U.  S.  543,  30 

L.  Ed.  487),  41. 
Hyde   v.   Southern   R.   R.   Co,    (31 

App.  D.  G.  466),  614. 


Illinois   V.    Terminal   R.   Co.    (168 

Fed.  546),  527. 
I.  C.  C.  V.  D.  L.  &  W.  R.  R.  Co. 

(216  U.   S.   531,  54   L.  Ed.   605), 

245. 
111.  Cent.  R.  Co.  v.  Illinois  (163  U. 

S.  142.  41  L.  Ed.  107),  47. 
III.  Cent.  V.  McKendree  (203  U.  S. 

514,  51  L.  Ed.  298).  53. 
111.    Cent.   V.    Inter.    Comm.    Com. 

(206  U.  S.  441,  51  L.  Ed.  1128), 

250,  462. 
Ilwaco  V.  Or.  Ry.  &  Nav.  Co.  (6  C. 

C.  A.  495,  57  Fed.  673),  372. 
Import  Rate  Case   (162  U.  S.  197, 

40  L.  Ed.  940,  6  C.  C.  A.  653,  52 

Fed.  187),  77,  78,  229,  285.  314, 

322,  381. 
Income  Tax  Cases  (158  U.  S.  601. 

89  L.  Ed.  1108),  108. 
Indiana    Mfg.    Co.    v.    J.    I.    Case 

Thresh.  Me.  Co.    (154   Fed.  365. 

148  Fed.  21),  550. 
Indiana  Consumers'  &  T.  R.  Co.  v. 

Ilorlass  (131   Ind.  446),  23. 


718 


TABLE   OF   CASES. 


[BEFERENCES  ABE  TO  PAGES.] 


Ingraham    v.    National    Salt    Co. 

(130  Fed.  676,  120  Fed.  40),  576. 
In  re  Bessette  (111  Fed.  417),  153, 

169. 
In  re  Corning   (51  Fed.  205),  545. 
In  re  Christiansen  Engineering  Co. 

(194  U.  S.  458,  48  L.  Ed.  1072), 

167. 
In  re  Debs   (158  U.   S.  564,  39  L. 

Ed.  1092,   64   Fed.   724),   4,   100, 

120,  146,  147,  152,  153,  162,  163, 

165,    420,    548. 
In  re  Doolittle  (23  Fed.  544),  165. 
In  re  Garnett   (141  U.  S.  1,  35  L. 

Ed.  631),  25,  26. 
In  re  Grice  (79  Fed.  627),  206. 
In  re  Green  (52  Fed.  104),  132,  545, 
'  553,  554. 

In  re  Higgins  (27  Fed.  443),  165. 
In  re  Horhorst  (150  U.  S.  653,  37 

L.  Ed.  1211),  418. 
In  re  Jackson  (96  U.  S.  727),  106. 
In  re  Lennon  (166  U.  S.  548,  41  L. 

Ed.  1110),  73,  159,  163,  418. 
In  re  Nagle  (135  U.  S.  1,  34  L.  Ed. 

55),  10. 
In  re  Nevitt  (55  C.  C.  A.  622,  117 

Fed.  448),  166. 
In  re  Peasley  (44  Fed.  271),  444. 
In  re  Penn.  Tel.  Co.   (48  N.  J.  Eq. 

191),  14. 
In  re  Reese  (98  Fed.  984,  47  C.  C. 

A.  87,  107  Fed.  942),  163,  169. 
In  re  Rahrer  (140  U.  S.  545,  35  L. 

Ed.  572),  32. 
In  re  Rapier  (143  U.  S.  110,  36  L. 

Ed.  93),  106. 
In  re  Savin   (131  U.  S.  267,  33  L. 

Ed.  150),  164. 
In    re    Southern    Pac.     (155    Fed. 

1001),  145. 
In  re  Tyrrell  (51  Fed.  213),  555. 
In  re  Winn  (213  U.  S.  458,  53  Fed. 

873),  74. 
In  re  Wung  Yung  Quy  (6  Sawyer, 

442),  18. 


International    Text    Book    Co.    v. 

Gillispie  (129  S.  W.  922),  61. 
International   Text    Bk.    v.    Piggs 

(217  U.  S.  91,  54  L.  Ed.  768),  13. 
Interstate  Commerce   Commission 

V.  Alabama  Mid.  Ry.  Co.  (168  U. 

S.  144,  42  L.  Ed.  414),  381. 
Interstate   Commerce   Commission 

V.  Atlantic  R.  Co.    (35  C.  C.  A. 

217,  93  Fed.  83),  318. 
Interstate  Commerce  Commission 

V.  Baird  (194  U.  S.  25,  48  L.  Ed. 

860),  97,  450,   581. 
Interstate   Commerce   Commission 

V.   Bellaire  C.  &  Z.  R.  Co.  (17  Fed. 

942),   508. 
Interstate  Commerce  Commission 

V.  Brimson  (154  U.  S.  447,  38  L. 

Ed.  1047,  155  U.  S.  1,  39  L.  Ed. 

49,  53  Fed.  476),  97. 
Interstate  Commerce  Commission 

V.    B.  C.   &  Z.   R.   Co.    (77   Fed. 

942),  220,  225. 
Interstate  Commerce  Commission 

V,    Chesapeake    &    Ohio    R.    Co. 

(128  Fed.  59),  346. 
Interstate  Commerce  Commission 

V.  Chicago  etc.  R.  Co.  (209  U.  S. 

108,  54  L.  Ed.  608),  83. 
Interstate  Commerce  Commission 

V.  Chicago  B.  &  Q.  R.  Co.    (186 

U.  S.  320,  46  L.  Ed.  1182,  43  C. 

C.  A.  209,  103  Fed.  249),  236. 
Interstate  Commerce  Commission 

V.    Chicago    &    G.    W.    Co.    (141 

Fed.  1003),  291. 
Interstate  Commerce  Commission 

V.  Cincinnati  P.  &  V.  R.  Co.  (124 

Fed.   624),   319 
Interstate  Commerce   Commission 

V.  Clyde  Steamship  Co.   (181  U. 

S.  33,  45  L.  Ed.  731),  258. 
Interstate  Commerce  Commission 

V.    C.   R.    &   P.    (218    U.   S.   88. 

54  L.  Ed.  946),  325. 


TABLE   OP   CASES. 


719 


[beferences  aue  to  paces.] 


Interstate  Commerce  Commission 

V.  Delaware  L.  &  W.  R.  Co.   (G4 

Fed.  723),  258,  457. 
Interstate  Commerce  Commission 

V.  Delaware  L.  &  W.  R.  Co.  (220 

U.  S.  235,  55  L.  Ed.  448),  496. 
Interstate   Commerce  Commission 

V.    Detroit,   G.    H.   &   M.    R.    Co. 

(167  U.  S.  633,  42  L.  Ed.  306,  21 

C.  C.  A.  103,  74  Fed.   803),  290. 
Interstate   Commerce   Commission 

V.  Diffenbaugh   (32  Sup.  Ct.  22, 

176  Fed.  409),  235,  338. 
Interstate  Commerce  Commission 

V.    111.    Cent.     (215    U.    S.    452, 

54  L.  Ed.  281),  83,  344. 
Interstate   Commerce   Commission 

V.    Lehigh    V.    R.    Co.    (74    Fed. 

784),  257. 
Interstate  Commerce  Commission 

V.  Louisville  &  N.  R.  Co.  (73  Fed. 

409),  319. 
Interstate  Commerce  Commission 

V.  Louisville  &  N.  R.  Co.    (190 

U.   S.   273,   47   L.   Ed.   1047,   112 

Fed.  98),  320,  324.  325,  381. 
Interstate   Commerce  Commission 

V.  Louisville  &  N.  R.  Co.    (118 

Fed.  613),  257. 
Interstate  Commerce  Commission 

V.   N.   C.   &  St.  L.   R.   Co.    (120 

Fed.  934),  256. 
Interstate  Commerce  Commission 

V.    Northern    Pac.     (216    U.    S. 

538,  54  L.  Ed.  60S)-,  84  474. 
Interstate  Commerce  Commission 

V.     Railroad     Co.     (167     U.     S. 

633,  42  L.  Ed.  306),  232. 
Interstate  Commerce  Commission 

V.    Reichman     (145    Fed.    235), 

240. 
Interstate  Commerce  Commission 

V.    Seaboard    R.    Co.     (82    Fed. 

563),  508. 
Interstate  Commerce  Commission 

V.    Southern    Pac.    R.    Co.    (117 

Fed.  741),  257.  323. 


Interstate  Commerce  Commission 

V.     Stickney      (215     U.     S.     98, 

54  L.  Ed.  112),  234,  237. 
Interstate   Commerce  Commission 

V.     Texas     &     Pacific     R.     Co. 

(162  U.  S.  197.  40  L.  Ed.  940,  52 

Fed.  187,  6  C.  C.  940,  A.  653),  281. 
Interstate  Commerce  Commission 

\».     Western     Atl.     R.     Co.     (88 

Fed.  186),  319. 
Interstate  Commerce  Commission 

V.    W.    N.    Y.    &    P.    R.    Co.    (82 

Fed.  192),  228,  495. 
Interstate    Stockyards   Co.    v.    In- 
dianapolis  U.   R.   Co.    (99    Fed. 

473),  355,  374,  376,  419. 
Iron    Moulders'    Union    v.    AUis- 

Chalmers    (166  Fed.  45),  157. 
Iroquois  Transp.  Co.  v.  De  Lanney 

(205  U.  S.  354,  51  L.  Ed.  837), 

26. 
Ives  V.  Buffalo  etc.  R.  R.  Co.  (94  N. 

E.  432),   59. 
Ivy  V.  Western  Union  Tel.  Co.  (171 

Fed.  371),  42. 

J. 

Jamison  v.  Indiana  Gas  &  Fuel  Co. 

(128  Ind.  555,  12  L.  R.  A.  652), 

23. 
Jefferson,       The       Thomas       (10 

Wheaton,  428,  6  L.  Ed.  358),  24. 
Jennings  v.  Big  Sandy  R.  Co.  (61 

W.  Va.  664,  57  S.  E.  272),  62. 
Jewett  v.  Chicago  M.  &  St.  P.  (15G 

Fed.  160),  425. 
Johnson  v.  Pensacola,  etc.  Co.  (16 

Fla.  622),  280. 
Johnson  v.  Southern  Pac.  R.  Co. 

(117  Fed.  462,  54  C.  C.  A,  508).- 

592. 
Johnston   v.   The   Great  Northern 

R.   R.   Co.    (178   Fed.   643),   594. 

617. 
Joint  Traffic  Association  Case  (171 

U.   S.   505,  43   L.   Ed.   259),   122, 

125,  537. 


720 


TABLE    OF    CASES. 


[refeuences  ake  to  pages.] 


Joy  V.  St.  Lauis   (138  U.  S.  1,  34 

L.  Ed.  843),  170. 
Junod  V.  C.  &  W.  R.  Co.  (47  Fed. 

290),  415,  429. 

K. 

Kalispel  Lbr.  Co.  v.  Great  North- 
ern Ry.  Co.    (157  Fed.  845,  165 

Fed.  25),  424. 
Keller  v.  United  States   (213  U.  S. 

138,  53  L.  Ed.  735),  13. 
Kelley  v.  Rhodes  (188  U.  S.  1,  47 

L.  Ed.  359),  31. 
Kennedy   v.   Terminal    Ass'n    (81 

Fed.  802),  250. 
Kentucky  Railroad  Tax  Cases  (115 

U.  S.  321,  29  L.  Ed.  414),  36. 
Kentucky  &  Indiana  Bridge  Co.  v. 

L.  &  N.  R.  Co.  (37  Fed.  567,  633), 

65,  231.  462. 
Kidd  V.  Pierson  (128  U.  S.  1,  32  L. 

Ed.  346),  16,  111. 
Kimmish  v.  Ball  (129  U.  S.  217,  32 

L.  Ed.  695),  50. 
Kinnavey  v.  Terminal  Association 

(81  Fed.   802),   70.  309. 
Kinner  v.  Lake  Shore  &  M.  S.  R. 

Co.   (69  Ohio  St.  339),  394. 
Kinsey  v.  Buffalo  N.  Y.  &  P.  R.  Co. 

(37    Fed.   181),    282. 
Knowlton  v.  Moore  (178  U.  S.  41, 

44  L.  Ed.  969),  108. 
Knoxville  v.  Knoxville  Water  Co. 
(212  U.  S.  1,  53  L.  Ed.  371),  185, 

191,  194,  195,  254. 
Knudson  v.  Benn   (123  Fed.  636), 

157,  158. 
Knudson-Ferguson    Co.    v.    Michi- 
gan   Central    R.    Co.    (148    Fed. 

968),   238. 
Kohl  V.  United   States    (91   U.   S. 

367),  9. 
Kolley     V.     Robinson      (187     Fed. 
415),   146,   157. 


L. 


La  Farier  v.  Railway  Co.   (84  Me. 

286),  61. 
Lake  Shore  &  M.  S.  R.  Co.  v.  Ohio 

(173  U.   S.   285,  43  L.  Ed.  702), 

46,   66. 
Lake  Shore  &  M.  S.  R.  Co.  v.  Smith 

(173  U.  S.  684,  43  L.  Ed.  858), 

201,  516. 
L.  &  Y.  R.  Co.  V.  Greenwood  (Law 

Rep.  21  Q.  B.  Div.  217,  218),  277 

314. 
Laurel  Cotton  Mills  v.  Gulf  etc.  R 

Co.    (37   South.  Rep.   134),  303 

305. 
Legal  Tender  Cases  (110  U.  S.  42 

28  L.  Ed.  64),  9. 
Lehigh  Valley  Railroad  Co.  v.  Du 

pont   (128  Fed.  840),  410. 
Lehigh  Valley  R.  Co.  v.   Pennsyl 

vania   (145  U.  S.  192,  36  L.  Ed 

672),  226. 
Lehigh  V.  R.  Co.  v.  Rainey   (112 

Fed.  407),  416. 
Leisy  v.  Hardin  (135  U.  S.  100,  34 

L.  Ed.  128),  31,  39,  64. 
Leloup  V.  Port  of  Mobile   (127  U. 

S.  640,  32  L.  Ed.  311),  5. 
License  Cases   (5  Howard,  504,  12 

L.  Ed.  256),  30,  31,  39. 
Little  Rock  &  N.  R.  Co.  v.  St.  L. 

Iron  Mt.   &  S.  R.   Co.    (41  Fed. 

Rep.  559,  59  Fed.  Rep.  400),  371, 

372. 
Little  Rock  &  N.  R.  Co.  v.  St.  L. 

&  S.  W.  R.  Co.  (11  C.  C.  A.  416, 

57  Fed.  Rep.  775),  371. 
Little  Rock  &  St.  L.  R.  Co.  v.  Op- 

penheimer  (64  Ark.  471,  44  L.  R. 

A.  353),  342. 
Livingston  v.  Van  Ingen  (9  Johns. 

507),  11. 
Loeb  V.  Eastman  Kodak  Co.   (183 

Fed.  704),  573. 


TABLE   OF   CASES. 


riii 


rRKFKRKNCI-S  ARK  TO  PAGES.] 


Loewe   v.   California   State   Feder- 
ation  of  Labor    (189   Fed.   714), 

148. 
Loewe  v.  Lawlor    (208  U.   S.   274, 

52  L.  Ed.  488),  147,  573,  574. 
Logan  Coal  Co.  v.  Penn.   Ry.   Co. 

(154  Fed.  497),  345. 
Lottery  Cases    (188  U.   S.   321,   47 

L.   Ed.  492),  14,  101,  102,  116. 
Louisville   &   Nashville    R.  •  Co.   v. 

Behlmer    (169   U.   S.   644,   42   L. 

Ed.  889),  225,  258,  381,  409,  462. 
Louisville   &   Xashville   R.   R.   Co. 

V.  Brown   (123  Fed.  946),  257. 
Louisville    &    Nashville   R.    Co.   v. 

Cent.  Stockyards  Co.   (212  U.  S. 

132,  53  L.  Ed.  441,  30  Ky.  L.  R. 

18),  201. 
Louisville    &    Nashville    v.    Cook 

Brewing  Co.  (172  Fed.  117),  426. 
Louisville   &    Nashville   R.   Co.   v, 

(Commonwealth    (51   S.   W.   Rep. 

167),  446. 
Louisville    »S:   Nashville   R.   Co.    v. 

Eubank  (184  U.  S.  27,  46  L.  Ed. 

416),  174,  176. 
Louisville   &   Nashville   R.   Co.   v. 

Kentucky   (183  U.  S.  503,  46  L. 

Ed.  '298,  161  U.  S.  677,  40  L.  Ed. 

849),  174,  202. 
Louisville   &   Nashville   R.    Co.   v. 

Mississippi  (133  U.  S.  587,  33  L. 

Ed.   784),   45. 
Louisville   &    Nashville   R.    Co.    v. 

Mottley  (211  U.  S.  149,  53  L.  Ed. 

127),  241. 
Louisville  &  N.  R.  Co.  v.  Mottley 

(219  U.  S.  467,  55  L.  Ed.  619). 
Louisville  &  N.  R.  Co.  v.  Siler  (186 

Fed.  176),  170,  181.  183,  185,  186, 

188. 
Louisville  &  N.  R.  v.  West  Coast 

Naval  Stores  Co.  (198  U.  S.  483, 

49  L.  Ed.  1135),  340. 
Louisville     &     Nashville     Consoli- 
dated R.  Co.  v.  Wilson  (132  Ind. 

517,  18  L.  R.  A.  105),  282,  309. 
46 


Louisville  Tel.  Co.  v.  Cumberland 
Tel.  Co.  (Ill  Fed.  r63j,  186. 

Lowe  V.  Railroad  Co.  (63  S.  C. 
248),  61. 

Lowenstein  v.  Evans  (69  Fed. 
908),  573. 

Lowry  v.  C.  B.  &  Q.  R.  Co.  (46  Fed. 
83),  418. 

Lucke  V.  Clothing  Cutters  &  Trim- 
mers' Assem.   (77  Md.  396),  156. 

Lundquist  v.  Grand  Trunk  R.  Co. 
(121  Fed.  915),  292. 

Luxton  V.  North  River  Bridge  CJo. 
(153  U.  S.  525,  38  L.  Ed.  808), 
87,  109. 

Lyng  v.  Michigan  (135  U.  S.  161> 
34   L.   Ed.   150),   31. 

M. 

McAlister  v.  Henkel  (201  U.  S.  90, 

50  L.  Ed.  671),  445. 
McCabe  v.  Atchison,  T.  &  S.  F.  R. 

Co.   (186  Fed.  966),  46. 
McCall  v.  California  (136  U.  S.  134, 

34  L.   Ed.   391),  37. 
McCounell     v.     Camors-McConnell 

Co.    (152  Fed.  321),  544. 
McCready   v.    Virginia    (94    U.    S. 

391,  24  L.  Ed.  248),  21. 
McCulloch  v.  Maryland   (4  Wheat. 

316,  4  L.  Ed.  579),  9,  10,  35.  100, 

108. 
McGrew  v.   Mo.   Pac.  R.  Co.    (114 

Mo.  210),  249. 
McNeill  V,   Southern   R.   Co.    (202 

U.   S.   543,   50   L.   Ed.    1142),   50, 

182,  245. 
Mackin  v.  U.  S.  (117  U.  S.  348,  29 

L.  Ed.  909),  152. 
Magnolia,   The    (20    How.    296,    15 

L.  Ed.  909),  24. 
Maine  v.  Grand  Trunk  R.  Co.  (142 

U.  S.  217,  35  L.  Ed.  994),  36. 
Majestic  Coal  &  Coke  v.   Illinois, 

Cent.  Ry.  (162  Fed.  810).  345. 


TOO 


TABLE    OF    CASES. 


[references  are  to  pages.] 


I\kikall  Y.  Ratchford  (82  Fed.  41), 

146. 
Llanarko  v.  Ward    (27  Fed.   529), 

280. 
Manchester  v.  Massachusetts  (139 

U.   S.  240,   3.5  L.  Ed.   159),  21. 
Manufacturers'  Gas  Co.  v.  Indiana 

Nat.  G.  &  F.  Co.  (155  Ind.  545), 

23. 
Jlanufacturers     Railway     of     St. 

Louis  (21  I.  C.  C.  R.  304),  221. 
Martin  v.  Southward  (191  U.  S.  1, 

48  L.  Ed.  65),  238. 
Marye  v.  Baltimore  &  Ohio  R.  Co. 

(127  U.  S.  117,  32  L.  Ed.  94),  36. 
Massachusetts    v.    Telegraph    Co. 

(141  U.  S.  40,  35  L.  Ed.  628),  36. 
Maximum  Rate  Case  (167  U.  S.  1, 

42  L.  Ed.  251),  172,  247,  252,  274. 
May   V.   New   Orleans    (178   U.    S. 

496,  44,  L.  Ed.  1165),  31. 
Meeker   v.    Lehigh   Valley   R.    Co. 

(162  Fed.  354),  576. 
Merchants'  Bridge  T.  Ry.  Co.  v.  U. 

S.   (188  Fed.  191),  94. 
Merchants'  Coal  Co.  v.  Fairmount 

Coal  Co.    (160  Fed.  769),  520. 
JVIerchants'  Cotton  Comp.  Co.  v.  In- 
surance Co.  (151  U.  S.  368,  38  L. 

Ed.  195),  310. 
Merchants'   Stock  &  Grain  Co.  v. 

Board  of  Trade   (187  Fed.  893), 

167. 
Messenger  v.  Pennsylvania  Co.  (37 

N.  J.  L.  407),  284. 
Metropolitan  Trust  Co.  v.  Railroad 

Co.  et  al.  (90  Fed.  683),  253. 
Metropolitan  Water  Co.,  Ex  Parte 

(220  U.  S.  539,  55  L.  Ed.  — ),  187. 
Meyer  v.  Mobile  (147  Fed.  843),  34. 
Michie  v.  N.  Y.  N.  H.  &  H.    (151 

Fed.  694),  233,  295. 
Michigan    Insurance    Bank   v.    El- 

dred    (130  U.  S.   693,  32   L.  Ed. 

1080),  416. 


Miles   Med.    Co.   v.   Park   &   Sons 

(220  U.  S.  373,  55  L.  Ed.  502), 

129,  138,  551. 
Miller  v.  111.  Cent.   (168  Fed.  982), 

620. 
Miller  v.   The   Mayor    (109   U.   S. 

385,  27  L.  Ed.  971),  25, 
Mines  v.  Scribner  (147  Fed.  927), 

543. 
Minneapolis  &  St.  L.  R.  Co.  v.  Min- 
nesota   (193  U.  S.  53,  48  L.  Ed. 

203),  614. 
Minneapolis  &  St.  L.  R.  Co.  v.  Min- 
nesota (186  U.  S.  257,  46  L.  Ed. 

1151),  68,  190,  202. 
Minnesota    v.    Barber    (136    U.    S. 

313,  34  L.  Ed.  455),  20,  51. 
Minnesota  v.  Northern  Securities 

Co.   (194  U.  S.  48,  48  L.  Ed.  870, 

123  Fed.  692),  564. 
Minnesota    Rate    Case    (184    Fed. 

765),  193,  196,  197,  198. 
Mississippi  Ry.  Commission  v.  111. 

Cent.    (203   U.  S.  335,   51  L.  Ed. 

209),  50,  74. 
Missouri,   K.  &  T.  R.  Co.  v.   New 

Era  Milling  Co.    (80  Kan.  141), 

60. 
MiEsouri  K.  &  T.  R.  Co.  v.  Haber 

(169   U.   S.   613,  42   L.  Ed.   878), 

52,  66. 
Missouri  K.  &  T.  R.  Co.  v.  Inter. 

Comm.'  Com.  (164  Fed.  645),  496. 
Missouri   K.   &   T.   R.   Co.   v.   May 

(194  U.   S.   267,   48  L.   Ed.   971), 

208. 
Missouri  K.  &  T.  R.  Co.  v.  U.  S. 

(178  Fed.  15),  628,  629,  630.' 
Missouri  Pac.  R.  Co.  v.  Castle  (172 

Fed.  841),  55. 
Missouri    Pac.    R.    Co.    v.    Kansas 

(216  U.  S.   262,   54   L.   Ed.   731), 

204. 
]\Iissouri   Pac.   R.   Co.   v.    Larodee 

Flour  Co.    (211  U.  S.  612,  53  L. 

Ed.  352),  49. 


TABLE    OP    CASES. 


723 


[RKM-KKNC  KS   ARE  TO  PAGES.] 


Missouri  Pac.  R.  Co.  v.  Nebraska 

(217  U.  S.  196,  54  L.  Ed.  727) ,  202. 

Missouri  Pac.  R.  Co.  v.  Nebraska 

(164  U.   S.  403,   41   L.   Ed.   489), 

353,  355. 

Missouri    Pac.    R,    Co.    v.    United 

States  (189  U.  S.  274,  47  L.  Ed. 

811,  65  Fed.  903),  419,  581. 

Missouri  Pac.  R.  Co.  v.  Texas  Pac. 

R.  Co.  (31  Fed.  862).  459. 
Missouri  Rate  Case  (186  U.  S.  257, 
46   L.   Ed.    1151),    191,    193,    196, 
197,  253,  264. 
Mobile  J.  &  K.  Ry.  Co.  v.  Missis- 
sippi   (210  U.   S.   187,   52  L.   Ed. 
1016).   204. 
Mogul  Steamship  Co.  v.  McGregor, 
(App.  Cases,  Parti,  p.  25,  23  Q. 
B.  Div.  598),  120,  132. 
Monarch   Tob.   Wks.   v.    American 

Tob.  Co.    (165  Fed.  774),  544. 

Monongahela  Bridge  Co.  v.  U.   S. 

(216  U.  S.  177,  54  L.  Ed.  435),  94. 

Montague    v.    Lowrey    (193    U.    S. 

38,  48  L.  Ed.  608,  115  Fed.  25,  75, 

106  Fed.  38),  125,  131,  538,  571. 

Montana  Cent.  R.  Co.  v.  U.  P.  (164 

Fed.  400),  628. 
Montello,  The  (20  Wall.  430.  22  L. 

Ed.  391),  25. 
Moores  v.  Bricklayers'  Union    (23 

Weekly  L.  Bui.  48),  155. 
Morrisdale  Coal  Co.  v.  Pac.  R.  Co. 

(176  Fed.   749),  426.  490. 
Morgan   v.    Louisiana    (118   U.    S. 

455,  30  L.  Ed.  237),  7,  40.  53. 
Mormon  Church  v.  U.  S.  (136  U.  S. 

1,  34  L.  Ed.  481).  226,  561. 
Mugler  V.  Kansas    (123  U.  S.  623, 

31  L.  Ed.  205).  19. 
Munn  V.  Illinois  Cejit.  R.  Co.    (94 

U.  S.  113,  24  L.  Ed.  77),  67. 
Murray  v.  C.  &  N.  W.  R.  Co.    (62 
Fed.   24.   43,  35  C.   C.  A.   62,  92 
Fed.   868),   70,   71,    73,   309,  416, 
418. 


Murray  v.  G.  &  S.  W.  R.  Co.  (4  Ry. 

&  C.  Tr.  Cases  460),  277. 
Mutual  Transit  Co.  v.  U.  S.    (178 

Fed.  664),  219. 


N. 


Narramore    y.    Railroad    Co.     (96 

Fed.  298),  603. 
Nashville  etc.   R.   Co.  v.  Alabama 

(128  U.  S.  96,  32  L.  Ed.  352),  44, 

53. 
Nathan  v.  Louisiana    (8  How.  73, 

12  L.  Ed.  992),  16. 
N5,tional  Fire  Proof  Co.  v.  Mason 

Builder   Assn.    (169    Fed.    259). 

564. 
National  Oil  Co.  v.  Texas  (197  U. 

S.  115,  49  L.  Ed.  689),  206. 
Naylor  v.  Lehigh  Valley  R.  Co.  et 

al   (ISS  Fed.  860),  494. 
Nebraska   Rate    Case    (169    U.    S. 

550,    42    L.    Ed.    820),    175,    198, 

254,  460. 
Nelms   V.   Mortgage   Co.    (92   Ala. 

157),  16. 
Nelson  v.  U.  S.  (201  U.  S.  92.  50  L. 

Ed.  673),  446. 
Nevada  Rate  Case  (170  Fed.  752), 

197. 
Newell  V.  B.  &  O.  Ry.  Co.  (ISl  Fed. 

698),  618. 
New    England    R.    Co.    v.    Conroy 

(175  U.  S.   323,  44  L.  Ed.   181), 

588. 
New  Mexico  ex  rel.  v.  Baker   (49 

L.  Ed.  372),  429. 
New  Mexico  ex  rel.  v.  D.  &  R.  G. 

(203  U.  S.  38.  51  L.  Ed.  78),  20. 
New  York  v.  Miller  (202  U.  S.  584, 

50  L.   Ed.   1155),  37. 
New  York  v.  Miln   (11  Pet.  102,  9 

L.  Ed.  648).  38,  39. 
New    York    Cent.    v.     Interstate 

Conmi.  Com.    (200  U.  S.  361,  50 

L.  Ed.  515),  244. 


724 


TABLE   OF  CASES. 


[rkferences  are  to  pages.] 


New    York     Cent.     v.     Interstate 

Comm.  Com.  (168  Fed.  131),  473, 

476. 

New  York  Cent.  v.  U.  S.  (212  U.  S. 

481,  53  L.  Ed.  613),  528,  530,  534. 

New  York  Cent.  v.  U.  S.  (165  Fed. 

833),  629,  630. 
New  York  ex  rel.  v.  Hesterby  (211 

U.  S.  31,  53  L.  Ed.  75),  21. 
New  York  Life  Ins.  Co.  v.  Cravens 
(178  U.  S.  389,  44  L.  Ed.  1116), 
17,  29. 
New  York  Life  Ins.  Co.  v.  Statham 
(93  U.  S.  21,  23  L.  Ed.  789),  29. 
New  York  etc.  R.  Co.  v.  New  York 
(165  U.   S.   628,  41  L.  Ed.   853), 
45. 
New  York  &  N.  R.  Co.  v.  N.  Y.  & 
N.  E.  R.  Co.   (50  Fed.  867),  371. 
Niagara  Fire   Ins.  Co.  v.   Cornell 

(110  Fed.  816),  207. 
Nicholson  v.  G.  W.  R.  Co.  (4  C.  B. 

[N.   S.]  366),  289. 
Nicol  V.  Ames    (173  U.  S.  509,  43 

L.  Ed.   786),  108. 
Northern  P.  R.  Co.  v.  Adams  (192 

U.  S.  440,  48  L.  Ed.  742),  306. 
Northern   Pacific   Railroad   Co.   v. 

Keyes   (91  Fed.  47),  190. 
Northern  Pac.  R.  R.  v.  North  Da- 
kota   (216   U.   S.  579,  54  L.   Ed. 
624),  188,  192. 
Northern  Pac.  R.  Co.  v.  Pac.  Coast 

etc.  Co.   (165  Fed.  1),  424. 
Northern  Pac.  R.  Co.  v.  Tynan  (56 
C.  C.  A.  192,  119  Fed.  288),  589, 
604. 
Northern  Penn.  R.  Co.  v.  Commer- 
cial Nat.  Bank  of  Chicago   (123 
U.  S.  727,  31  L.  Ed.  287),  236. 
Northern  Securities  Co.  v.  Harri- 
man    (197  U.   S.   244,  49   L.  Ed. 
739),  567. 
N.  O.,  &  T.  P.  R.  Co.  V.  Commis- 
sion   (162  U.   S.   184,  40  L.  Ed. 
935),  494. 


N.  &  W.  R.  Co.  V.  Sims  (191  U.  S. 
41,  48  L.  Ed,  254),  35. 

O. 

Gates  V.  National  Bank  (100  U.  S. 

239,  25  L.  Ed.  580),  70. 
Ghio  Coal  Co.  v.  Whitcomb    (123 

Fed.  359),  308. 
Ghio  Gil  Co.  v,  Indiana  (177  U.  S. 

190,  44  L.  Ed.  729),  23. 
Oklahoma    Rate    Case    (185    Fed. 

329),  197,  198. 
Old    Dominion    Steamship    Co.    v. 

McKenna  (30  Fed.  49),  156. 
Oliver  v.   Gilmore    (52   Fed.   563), 

139. 
Omaha  v,  Omaha  Water  Co.   (218 

U.  S.  180,  54  L.  Ed.  991),  195. 
Opinion  of  Justices  (14  Gray,  615), 

10. 
Ordway  v.  Central  Nat.  Bank   (47 

Md.  245),  73. 
Oregon  Nav.  Co.  v.  Campbell  (173 

Fed.  957),  176,  184. 
Oregon  Nav.  Co.  v.  Campbell  (177 

Fed.   318),   184. 
Oregon  S.  L.  &  U.  N.  R.  Co.  v.  N. 

P.  R.  Co.   (9  C.  C.  A.  409),  358, 

371. 
Orient  Ins.  Co.  v.  Daggs   (172  U. 

S.  557,  43  L.  Ed.  552),  29. 
Osborne  v.  Railroad  Co.  (3  C.  C.  A. 

347,  52  Fed.  912),  382. 
Otis  Steel  Co.  v.  Local  Union  No. 

18  (110  Fed.  698),  146. 
Oxdale  v.  N.  E.  R.  Co.   (1  Nev.  & 

McN.  Ry.  Cases  73),  366. 
Oxlaid  V.  Northeastern  R.  Co.  (15 

Com.  Bench    [N.   S.]    680),   342. 


Pabst  Brewing  Co.  v.  Cranshaw 
(198  U.  S.  17,  49  L.  Ed.  925),  34. 

Pacific  Coast  Ry.  v.  U.  S.  (173  Fed. 
448),  587. 


TABLE  OP   CASES. 


725 


[eefebencks  are  to  pages.] 


Pacific    Railroad    Removal    Cases 

(115  U.  S.  2,  29  L.  Ed.  319),  109. 
Packet   Co.   v.   Aiken    (121    U.    S. 

444,  30  L.  Ed.  976),  41. 
Party  Rate  Case  (145  U.  S.  263,  36 

L.  Ed.  703),  241,  279,  283,  287, 

289,  315,  515. 
Parsons,  The   Robert  W.    (191   U. 

S.  17,  48  L.  Ed.  73).  26. 
Parsons  v.  C.  &  N.  W.  R.  Co.  (167 

U.   S.   447,   42   L.   Ed.   231,  11   C. 

C.  A.  489,  63  Fed.  903).  414. 
Passaic    Print    Goods    Co.   v.    Ely- 
Walker  Dry  Goods  Co.  (105  Fed. 

163),  138. 
Passenger  Cases    (7  How.  283,  12 

L.  Ed.  702),  12,  39. 
Patapsco  Guano  Co.  v.  North  Caro- 
lina  Board   of  Agr.    (171   U.   S. 

345,  43  L.  Ed.  191),  20. 
Paul  V.  Virginia   (8  Wall.  168,  19 

L.  Ed.  357),  17,  28. 
Peavey  v.  Union  Pacific  (176  Fed. 

409),  338. 
Peik   V.    Railroad    Co.    (94    U.    S. 

164,  24  L.  Ed.  97),  67. 
Penn.  Ry.  Co.  v.  International  Coal 

etc.  Co.    (173  Fed.  1),  297,  309, 

310,  417,  427,  428. 
Pennsylvania  Refining  Co.  v.  West- 
ern N.  Y.    (208  U.  S.  208,  52  L. 

Ed.  456),  290,  310,  347. 
Pennsylvania    Sugar    etc.    Co.    v. 

American  etc.  Co.  (166  Fed,  254, 

160  Fed.  144),  544. 
Pennsylvania     v.     Wheeling     etc. 

Bridge  Co.   (18  How.  421,  15  L. 

Ed.  435),  8,  87. 
Pennsylvania    R.    Co.    v.    Hughes 

(191  U.  S.  477,  48  L.  Ed.  268), 

48.  55. 
Pennsylvania  R.  Co.  v.  Jones  (155 

U.  S.  333,  39  L.  Ed.  176),  12,  410. 
Pensacola  Tel.   Co.  v.  W.  U.  Tel. 

Co.    (96  U.   S.  1,   12,   24   L.   Ed. 

708,  711),   41,   89. 
People  V.  Coler  (166  N.  Y.  144).  61. 


People  V.  Cook  (148  U.  S.  397,  37 

L.  Ed.  498),  203. 
People  V.  Coombs  (158  N.  Y.  532), 

447. 
People  V.  Hawkins   (157  N.  Y.  1). 

61. 
People  V.  Kelley  (24  N.  Y.  74),  443. 
People  v.  Sheldon  (139  N.  Y.  251), 

139. 
People's  Tob.  Co.  v.  American  Tob. 

Co.  (170  Fed.  390),  544. 
Perkins  v.  Northern  Pac.  (155  Ped. 

445),  186. 
Pettibone  v.  United  States  (148  U. 

S.  197,  37  L.  Ed.  419),  151. 
Philadelphia    Fire    Ass'n    v.    New 

York   (119  U.  S.  110,  30  L.  Ed. 

342),  29. 
Phillips  V.   lola  Cement  Co.    (125 

Fed.   503,   61  C.  C.  A.  19),  137, 

545. 
Pidcock    V.    Harrington    (64    Fed. 

821),  563. 
Piersall  v.  Great  Northern  R.  Co. 

(161  U.  S.   646,   40  L.   Ed.   838), 

203. 
Pike  V.  Chicago  etc.  R.  Co.  (94  U. 

S.  177,  24  L.  Ed.  98),  75. 
Pittsburgh  etc.  Coal  Co.  v.  Bates 

(156  U.  S.  577,  39  L.  Ed.  538),  30. 
Pittsburgh  etc.  R.  Co.  v.   Backus 

(154  U.  S.  421,  38  L.  Ed.  1031), 

36. 
Plessy  V.  Ferguson  (163  U.  S.  537, 

41  L.  Ed.  256),  45. 
Plumley  v.  Massachusetts  (155  U. 

S.  461,  39  L.  Ed.  223),  18. 
Pondecker  Lumber  Co.  v.  Spencer 

(30  C.  C.  A.  430,  86  Fed.  846,  81 

Fed.  277),  402. 
Poor  V.    Iowa   Cent.   R.   Co.    (155 

Fed.  226),  484. 
Postal  Tel.  &  C.  Co.  v.  Adams  (155 

U.  S.  688,  39  L.  Ed.  311),  83. 
Powell  V.  Pennsylvania  (127  U.  S. 

678,   32   L.   Ed.   253).   19. 


726 


TABLE   OF    CASES. 


[REFEKEXCES  ABE  TO  PAGES.] 


Prentice  v.  Atlantic  Coast  Line 
(211  U.  S.  210,  53  L.  Ed.  150), 
181,  183. 

Prescott  &  A.  Cent.  R.  Co.  v.  A.  T. 
&  S.  F.  R.  Co.  (73  Fed.  438), 
371. 

Fi-octor  &  Gamble  Co.  v.  U.  S. 
(Com.  C.)  (188  Fed.  221),  348, 
479. 

Pullman  Co.  v.  Kansas  (216  U.  S. 
56,  54  L.  Ed.  378),  27. 

Pullman  Palace  Car  Co.  v.  Penn- 
sylvania (141  U.  S.  18,  35  L.  Ed. 
613),  36. 


R. 


Ragan  v.  Aiken  (9  Lea,  609),  280. 
Railroad  v.  State  (85  Ark.  284,  107 

S.  W.  989),  60. 
Railroad  Co.  v.  Baker  (33  C.  C.  A. 

648,  91  Fed.  224),  604. 
Railroad  Co.  v.  Baugh   (149  U.  S. 

368,   37   L.   Ed.   772),  70. 
Railroad  Co.  v.  Ellis  (165  U.  S.  1, 

41  L.  Ed.  667),  177,  208. 
Railroad   Co.  v.   Fuller    (17   Wall. 

560,  21  L.  Ed.  710),  43,  65. 
Railroad  Co.  v.  Forsaith  (59  N.  H. 

122),  284. 
Railroad  Co.  v.  Husen    (95  U.  S. 

465,  24  L.  Ed.  527),  50. 
Railroad  Co.  v.  Iowa  (94  U.  S.  155, 

24  L.  Ed.  94),  67. 
Railroad    Co.    v.    National    Bank 

(102  U.  S.  14,  26  L.  Ed.  61),  70. 
Railroad    Co.   v.   Ohio    (173   U.   S. 

285,  43  L.  Ed.  702),  201. 
Railroad  Co.  v.  Pemiston  (18  Wal- 
lace, 5,  21  L.  Ed.  787),  174. 
Railroad    Co.    v.    People    (77    111. 

443),   249. 
Railroad    Co.    v.    Pratt    (22    Wall. 

123,  22  L.  Ed.  827),  348. 
Railroad    Co.    v.    Richmond     (19 

Wall.  584,  22  L.  Ed.  173),  65. 


Railroad  Commission   Cases    (116 

U.  S.  307,  29  L.  Ed.  636),  172. 
Railroad    Commission    of   Ohio   v. 

Worthington   (187  Fed.  965),  52. 
Rasmussen   v.    Idaho    (181    U.    S. 

198,  45  L.  Ed.  820),  52. 
Ramsey  v.  Tacoma  Land  Co,   (196 

U.  S.  360,  49  L.  Ed.  512),  578. 
Rattican  v.  Terminal  R.  R.  Assn. 

(114  Fed.  666),  416. 
Reagan  v.  Farmers'  Loan  &  T.  Co. 

(154   U.    S.   362,  391,   38   L.   Ed. 

1014,    1021),   172,    178,    181,   184, 

190. 
Reagan    v.    Mercantile    Trust    Cp. 

(154  U.  S.  413,  38  L.  Ed.  1028), 

112,   173. 
Regina   v.    Bauld    (13    Cox,    C.    C. 

282),   154. 
Reid  V.  Colorado    (187  U.   S.  137, 

47  L.  Ed.  108),  52,  94,  102. 
Rex.  V.  Waddington  (1  East,  167), 

141. 
Rhodes  v.  Iowa  (170  U.  S.  412,  42 

L.  Ed.  1088),  31,  33,  92,  157. 
Rice    V.    Standard    Oil    Co.     (134 

Fed.  464),  553,  573. 
Richmond    v.    Southern    Bell    Tel. 

Co.    (174   U.    S.   761,    43   L.    Ed. 

1161),  13,  91. 
Richmond  etc.  R.   Co.  y.  Tobacco 

Co.    (169    U.    S.    811,    42   L.   Ed. 

759),  48,  56. 
Riddle  v.  N.  Y.  L.  E.  &  W.  R.  Co. 

(39  Fed.  290),  429. 
Robbins  v.  Shelby  County  Taxing 

District  (120  U.  S.  489,  30   L.  Ed. 

694),  35,  64. 
Robertson  v.  Baldwin    (165  U.   S. 

1,  287,  41  L.  Ed.  719),  158. 
Robinson  v.   B.   &  O.  R.  Co.    (129 

Fed.  753),  355. 
Rose  Co.  V.  State    (133   Ga.   353), 

60. 
Rosenbaum   Grain   Co.  v.  C.  R.  & 

T.  R.  Co.   (130  Fed.  46),  353. 


TABLE   OP   CASES. 


f27 


[referencks  abf,  to  pa(,i;s.] 


Rubber  Tire  W.  Co  v.  Milwaukee 
Rub.  Wks.  (154  Fed.  358.  142 
Fed.  531),  550. 

Russell  V.  Croy   (164  Mo.  69),  59. 

Rupert  V.  U.  S.   (181  Fed.  81),  21. 

Ryan  Steamship  Co.  v.  Common- 
wealth  (30  Ky.  L.  R.  1276),  61. 


S. 


Sands  v.  Manistee  River  Imp.  Co. 

(123  U.  S.  288,  31  L.  Ed.  149),  41. 
Sandusky-Portland  Cement  Co.  v. 

B.  &  O.  R.  Co.    (187  Fed.  583), 

425. 
Santa  Clara  County  v.  So.  Pac.  R. 

Co.    (118    U.    S.   394,   30   L.    Ed. 

118),  177n 
Santiago  v.  Jasper  (189  U.  S.  439, 

47  L.  Ed.  892),  195. 
Security    Mutual    L.    Ins.    Co.    v. 

Prewitt  (202  U.  S.  246,  50  L.  Ed. 

1013),  28. 
Schleraan  v.  Railroad  Co.  (207  Pa. 

198),  588.  601. 
Schlemer  v.  Buffalo,  etc.  Co.   (205 

U.  S.  1,  51  L.  Ed.  681),  74,  588. 
Schmidt  v.  People    (18  Colo.  78), 

60. 
Schoficld  V.  L.  S.  &  M.  S.  R.  Co. 

(43  Ohio  St.  571,  3  N.  E.  907), 

283. 
Schollenberger     v.     Pennsylvania 

(171  U.  S.  1,  43  L.  Ed.  49),  18, 

31. 
Scott  V.  Donald   (165  U.  S.  58,  41 

L.  Ed.  632),  55. 
Seaboard  Air  Line  v.  Seeders  (207 

U.  S.  73,  52  L.  Ed.  108,  73  S.  C. 

71),  204. 
Seaboard   American   Line   v.   Fla. 

(203  U.  S.  261,  51  L.  Ed.  176), 

190,  193. 
Searight  v.  Stokes  (3  How.  151,  11 

L.  Ed.  537),  8. 


Seattle  Electric  v.  Seattle  R.  &  S. 

Co.   (185  Fed.  365),  179, 
Shawnee  Compress  Co.  v.  Ander- 
son   (209   U.    S.    423,    50   L.    Ed. 

865),  564. 
Sheldon    v.    Wabash    R.    Co.    (105 

Fed.  Rep.  785),  70,  73,  418. 
Shepard    v.    Northern    Pacific    R. 

Co.  (184  Fed.  765),  175,  191,  199. 
Sherlock  v.  Ailing    (93   U.   S.   99, 

103,  23  L.  Ed.  819),  43. 
Sigel  V.  N.  Y.  C.  &  H.  R.  Co.   (178 

Fed.  873),  606. 
Siler  V.  L.  &  X.  (213  U.  S.  175,  53 

L.    Ed.    753T.    178,    179. 
Simpson-Crawford     Co.     v.     Bur- 
rough  of  Atl.  Highland  (158  Fed. 

372),    32. 
Smelzer  v.   St.  Louis  &  S.  F.  Co. 

(158   Fed.    649),   510. 
Smiley  v.  Kansas    (196  U.  S.  447, 

49  L.  Ed.  546).  205. 
Smith  V.  Alabama  (124  U.  S.  465, 

31  L.   Ed.   508),  43,  44,  69. 
Smyth  V.  Ames  (169  U.  S.  466,  42 

L.  Ed.  819),  112,  173,  178,  180, 

181,  182,  185,  189,  190,  194,  247. 
Social  Circle  Case  (162  U.  S.  184, 

40  L.  Ed.  935),  78,  251,  317,  382, 

409. 
Soda  Fountain   Co.  v.   Green    (69 

Fed.  Rep.  333),  576. 
South  Carolina  v.  Georgia   (93  U. 

S.  4,  23  L.  Ed.  782),  15. 
Sorell  V.  Railroad  Co.  (75  Ga.  509), 

249. 
Southern   Cal.   R.   Co.   v.    Ruther- 
ford (62  Fed.  Rep.  796),  146,  170. 
Southern  Indiana  Ex.  Co.  v.  U.  S. 

Exp.  Co.  (35  C.  C.  A.  172,  92  Fed. 

1022,  88  Fed.  659),  222,  563. 
South    Dakota  Rate  Case  (176  U.  S. 

167,  44  L.  Ed.  417),  184,  190,  196, 

197.  198,  264. 
Steamship   Co.   v.    Louisiana    (118 

U.  S.  455,  30  L.  Ed.  237),  7,  10,  53. 


728 


TABLE   OF    CASES. 


[rfferences  are  to  pages.] 


Southern  Pac.  R.  Co.  v.  Campbell 

(1S9  Fed.  696),  176. 
Southern  Pac.  R.  Co.  v.  Colorado 

Fuel  &  Iron  Co.  (42  C.  C.  A.  12, 

101  Fed.  779),  248,  252. 
Southern  Pacific  Co.  v.  Inter,  Com. 

Comm.  (219  U.  S.  433,  55  L.  Ed. 

283),  260,  476. 
So.  Pac.  Ry.  v.  Inter.  Comm.  Com. 

(166  Fed.  134),  582. 
So.  Pac.  V.  Interstate  Comm.  Com. 
(200  U.  S.  536,  50  L.  Ed.  585), 

356. 
Southern   Pac.    Co.,  In  re  (155  Fed. 

1001),  27. 
Southern  Ry.  Co.  v.  Carson    (194 

U.  S.  136,  48  L.  Ed.  907),  589. 
Southern  Ry.  Co.  v.  Greenboro  Ice 

&  Coal  Co.  (134  Fed.  82),  178. 
Southern  Ry.  Co.  v.  King  (160  Fed. 

332,  affirmed  in  217  U.  S.  524,  54 

L.  Ed.  868),  43,  45. 
Southern   Ry.   Co.   v.    Machinists' 

Local  Union  (111  Fed.  Rep.  49), 

145. 
Southern  Ry.  Co.  v.  McNeil    (155 

Fed.  756),  193. 
Southern  Railway  Co.  v.  St.  Louis 

H.  &  G.  Co.  (214  U.  S.  207,  53  L. 

Ed.  1004),  351. 
So.  Ry.  Co.  V.  Tift  (206  U.  S.  428, 

51  L.  Ed.  1124),  82,  423. 
So.  Ry.  Co.  V.  U.  S.  (32  Sup.  Ct.  2), 

103,  595, 
So.  Wire  Co.  v.  St,  L.,  etc.,  R.  Co. 

(38  Mo.  App.  191),  309. 
Spofford  V.   B.   &  M.   R.   Co.    (128 

Mass.  326),  284. 
Standard  Oil  Co.  of  N.  J.  v.  U.  S. 

(221  U.  S.  1),  545. 
Standard  Oil  of  Ky.  v.  Tenn.  (217 

U,  S.  413,  54  L.  Ed,  817),  207, 
Stanislaus  v.   Joaquin    (192   U.   S. 

204,  48  L.  Ed.  406),  199. 
State  V,  Atlantic   C.   L.    (56   Fla. 

617,  32  L,  R,  A.  [n.  s.]  639),  93. 


State  V.  Baglor  (34  Utah,  257),  62. 
State  V.  C.  N.  &  St.  P.  R.  Co.  (136 

Wis.  407),  62. 
State  V.  Corbett  (57  Minn,  345),  48. 
State   V.   Donaldson    (32  N.   J.   L. 

151),  156. 
State   V.   Cumberland   R.   Co.    (66 

Atl.  456),  61. 
State  V.  Donovan   (10  N.  D.  203), 

447, 
State  Freight  Tax  Case  (15  Wall, 

232,  21  L,  Ed,  146),  36,  39,  54, 
State  V.   Glasby    (50  Wash.   704), 

62. 
State  V.  Glidden  (55  Conn.  46),  156. 
State  of  Iowa  v.  Chicago,  M.  &  St. 

P.   R.   Co.    (33   Fed.  Rep.   391), 

373. 
State   V.    Missouri   Pacific   R.    Co. 

(212  Mo.   658),  53,  6L 
Stevens  v.  M.  K.  &  T.  R.  Co.  (106 

Fed.  771),  185. 
State  V.  Omaha  R.  Co.  (Iowa)  (84 

N.  W.  983),  60. 
State  V.  Peck  (68  Atl.  661,  180  Vt. 

449),  62. 
State  V.  Railroad  Cos.  (47  Ohio  St. 

130),  283. 
State  Railroad  Tax  Cases  (92  U.  S. 

575,  23  L.  Ed.  663),  36. 
State  V.  Scott  (98  Tenn.  254),  62. 
State  V.  Smith  (74  Iowa,  580),  447. 
State  V.  Stewart  (59  Vt.  273),  156. 
State  of  Wis.  v.  C.  M.  &  St.  P.  R. 

Co.  (136  Wis.  407),  53. 
Stockard  v.  Morgan  (185  U.  S.  27, 

46  L.  Ed.  785),  35. 
Stockton    V.    Baltimore,    etc.,    (32 

Fed.  Rep.  9),  9. 
Stone  V.  Mississippi  (101  U.  S.  814- 

818,  25  L.  Ed.  1079),  116. 
Stubbs  V.  Colorado  (90  Pac.  1114), 

60. 
St.  Clair  Co.  v.  Interstate  Sand  & 

Car  Tr.  Co.  (192  U.  S.  454,  48  L. 

Ed.  518),  41,  88. 


TABLE  OP  CASES. 


729 


[REFEBENCES  ABE  TO  PAGES.] 


St.  Louis  S.  F.  Co.  V.  Allen   (181 

Fed.   710),  57. 
St.  Louis  So.  Ry.  v.  Arkansas  (217 

U.  S.  136,  54  L.  Ed.  699),  49. 
St.  Louis  etc.  Co.  v.  Delk  (158  Fed. 

931),  606. 
St.  Louis  Drayage  Co.  v.  L.  &  N. 

R.  Co.  (65  Fed.  Rep.  39),  371. 
St.  L.  &  S.  F.  R.  Co.  V.  Gill   (156 

U.  S.   649,  39  L.  Ed.  567),   183, 

190,   193. 
St.  Louis  &  S.  F.  R.  R.  Co.  v.  Had- 

ley  (168  Fed.  317),  186,  197. 
St.  Louis,  L  M.  &  S.  V.  Hampton 

(162  Fed.  693),  57. 
St.  Louis,  I.  M.  &  So.  R.  R.  Co.  v. 

Taylor  (210  U.  S.  281,  52  L.  Ed. 

1061),  593,  598. 
St.  Louis  &  S.  Fe  v.  U.  S.  (169  Fed. 

69),  630. 
St.  Louis  V.  Western  U.  Tel.  Co. 

(148  U.  S.  92,  37  L.  Ed.  380),  90. 
State  ex  rel.  v.   Associated  Press 

(159  Mo.  410),  68. 
State  ex  rel.  v.   Ind.  &  O.  Gas  & 

Mining  Co.    (120   Ind.   575),   22. 
State  ex  rel.   Johnson  v.  C.  B.  & 

Q.  Ry.  Co.   (165  Mo.  228),  59. 
Sunset  T.  &  T.  Co.  v.  Ureka  (172 

Fed.  755),  13. 
Swift  V.  R.  R.  Co.    (64  Fed.  59), 

250. 
Swift  V.  Railroad  Co.  (58  Fed.  Rep. 

858),  70,  73,  418. 
Swift  V.  Tyson  (16  Peters,  1,  18,10 

L.  Ed.  863,  871),  70. 
Swift  V.  U.  S.  (196  U.  S.  375,  49  L. 

Ed.  518),  130,  162,  307,  556. 


T. 


Taylor  v.  Southern  R.  R.  Co.  (178 

Fed.  380).  619. 
Telegraph  Co.  v.  Philadelphia  (190 

U.  S.  160,  47  L.  Ed.  995),  42. 
Telegraph  Co.  v.  Texas  (103  U.  S. 

460,  26  L.  Ed.  1067),  41. 


Texas  &  Pac.  v.  Abilene  Co.   (204 

U.  S.  426,  51  L.  Ed.  553),  82,  248, 

422,  423.  489,  490,  491. 
Texas  &  Pac.  R.  Co.  v.  Allen   (98 

S.  W.  450),  62. 
Texas  &  Pac.  R.  Co.  v.  Archibald 

(170  U.  S.  665.  42  L,  Ed.  1188), 

589. 
Texas  &  Pac.  R.  Co.  v.  Cisco  Oil 

Mills  (204  U.  S.  449),  402,  422. 
Texas  &  Pac.  R.  Co.  v.  Int.  Com. 

Comm.  (162  U.  S.  197,  40  L.  Ed. 

940),  276,  456,  493. 
Texas  &  Pac.  R.  Co.  v.  Mugg  (202 

U.  S.  242,  50  L.  Ed.  1011),  401. 
Texas   etc.   R.   Co.   v.   Swearinger 

(122  Fed.  193),  603. 
Thomas  v.  C.  N.  0.  &  T.  P.  R.  Co. 

(62  Fed.  803),  146,  130,  160,  165, 

434,  548. 
Thomas  v.  U.   S.    (156   Fed.   897), 

532. 
Thompson  v.  London  &  N.  W.  R. 

Co.    (2  Nev.  &  McN.  Ry.  Cases 

115),  366. 
Thomson  v.  Union  Castle  etc.  Co. 

(166  Fed.  251),  549. 
Toledo   A.   A.   R.   Co.   v.   Pennsyl- 
vania R.  Co.    (54  Fed.  1.  c.  739, 

54   Fed.   746,  19   L.  R.  A.  387), 

146,  150,  163.  170,  420,  433,  549. 
Townsend  v.  State  (147  Ind.  524), 

23. 
Trade  Mark  Cases  (100  U.  S.  82,  25 

L.  Ed.  550),  16. 
Traders  Live  Stock  Exchange  (171 

U.  S.  578,  43  L.  Ed.  300),  540. 
Trans-Missouri     Freight    Associa- 
tion Case   (166  U.  S.  331,  41  L. 

Ed.  1024),  118,  189. 
Troxler  v.   Southern  Ry.   Co.    ( — 

N.  C.  — ,  44  L.  R.  A.  313),  588. 


U. 


Union  Pac.  Coal  Co.  v.  U.  S.   (173 
Fed.  737),  131,  565. 


730 


TABLE   OF    CASES. 


[references  ABE  TO  PAGES.] 


Union   Pac.   R.   Co.   v.   Chicago   & 

C.  R.  Co.  (163  U.  S.  564,  589,  41 

L.  Bd.  265,  274),  65,  376. 
Union  Pac.  R.  Co.  v.  Goodrich  (149 

U.  S.   680,  37  L.  Ed.   896),  278, 

310. 
Union  Pac.  R.  Co.  v.  Ruff  (120  Fed. 

Rep.  102),  158. 
Union  Pac.  R.  Co.  v.  U.   S.    (117 

U.  S.  355,  29  L.  Ed.  920),  285. 
Union  Pacific  v.  Updike  Grain  Co. 

(178  Fed.  223),  338. 
Union  Refrigerator  Transit  Co.  v. 

Lynch   (177  U.  S.  149,  44  L.  Ed. 

708),  36. 
Union  Stockyards  Co.  of  Omaha  v. 

C.  B.  &  Q.  R.  Co.   (196  U.  S.  17, 

49  L.  Ed.  453),  596. 
Union   Stock  Yards  v.  U.  S.    (169 

Fed.  404),  587. 
United   States   v.   Agler    (62   Fed. 

826),  146,  548. 
United     States     v.     Amalgamated 

Ass'n  (54  Fed.  994),  153. 
United     States     v.     Amedy     (11 

Wheaton,  329),  578. 
United  States  v.  Am.  Nav.  Stores 

Co.  (186  Fed.  592),  554. 
United    States    v.    American    Tob. 

Co.  (221  U.  S.  106,  55  L.  Ed.  619), 

546. 
United    States    v.    Anderson    To- 
bacco Co.   (163  Fed.  517),  604. 
United  States  v.  Armour  (142  Fed. 

808),  99,  447. 
United  States  v.  A.,  T.  &  S.  F.  R. 

Co.   (166  Fed.  160),  628,  630. 
United  States  v.  A.  T.  &  S.  F.  R. 

Co.    (142   Fed.    176),   577. 
United    States    v.    Atlantic    Coast 

Line  (173  Fed.  764),  628. 
United  States  v.  B.  &  0.  et  al.  (153 

Fed.  997),  316,  436. 
United  States  v.  B.  &  O.  S.  W.  (159 

Fed.  33),  629. 


United   States  v.   Boyer    (85  Fed. 

425),  52. 
United  States  v.  Brigantine  Will- 
iam (2  Hall's  Am.L.  J.  255),  6. 
United  States  v.  Bunch  (165  Fed. 

736),  530. 
United  States  v.  Cassiday  (67  Fed. 

698),  146,  152. 
United  States  v.  Cadwallader  '(59 

Fed.   677),  553. 
United  States  v.  Central  Vermont 

Ry.  Co.   (157  Fed.  291),  534. 
United  States  v.  Chesapeake  &  O. 

Fuel  Co.   (105  Fed.  93),  539. 
United  States  v.  Chicago  &  N.  W. 

R.  Co.  (127  Fed.  725),  515. 
United     States    v.    Coal     Dealers 

Ass'n  of  Cal.  (85  Fed.  252),  539, 

563. 
United  States  v.  C.  &  N.  W.   (157 

Fed.  616,  168  Fed.  236),  595. 
United  States  v.  C.  R.  L  &  P.  (163 

Fed.  114),  242. 
United  States  v.  Colorado  (57  Fed.. 

321),  588. 
United  States  v.  Delaware  etc.  Co. 

(152  Fed.  269),  527,  532. 
United   States   v.   Del.    &   Hudson 

Co.    (213    U.    S.    366,    53   L.   Ed. 

836),  243. 
United  States  v.  De   Coursey    (82 

Fed.  302),  401,  435,  436. 
United  States  v.  D.,  L.  &  W.  R.  Co. 
(40  Fed.  101-103),  280,  316,  520. 
United   States  v.  Elliott    (64  Fed. 

27,  62  Fed.  Rep.  801),  5,  146. 
United  States   v.   Forty-three   Gal- 
lons of  Whiskey    (93  U.   S.  188, 

23  L.  Ed.  846),  6. 
United  States  v.  Gailford  (146  Fed. 

298),  531. 
United  States  v.  Geddes  (131  Fed. 

452),  220,  225,  586. 
United  States  v.  Greenhutt  et  al. 
(51  Fed.  205,  469),  554. 


TABLE   OF    CASES. 


731 


[references  ABE  TO  PACES.] 


United  States  v.  Ilanley   (71  Fed. 

672),  43^*5, 
United  States  v.  Howell   (56  Fed. 

21).  7.,  436. 
United  States  v.  International  etc. 

Co.    (174  i-ed.  63S).  588. 
United  States  v.  Jelico  Mt.  Coal  & 

Coke  Co.  (46  Fed.  32),  538. 
United  Statts  v.  Joint  Traffic  As- 
sociation   (171  U.   S.  505,   43   L. 

Ed.  259),  121,  162. 
United  States  v.  Kagama   (118  U. 

S.  375,  30  L.  Ed.  228),  6. 
United   States   v.   Kane    (23   Fed. 

■748),  165. 
United  States  v.  Kissel  (218  U.  S. 

601,. 54  L.  Ed.  1168),  555,  557. 
United  States  v.  Knight  Co.    (156 

U.  S.  1,  39  L.  Ed.  325,  60  Fed. 

306,  934),  16,  106,  110,  122,  134 

536. 
United  States  v.  Lehigh  Valley  R. 

Co.  (220  U.  S.  257,  55  L.  Ed.  459, 

115  Fed.  372),  226,  243. 
United  States  v.  McAndrews  etc. 

Co.  (149  Fed.  823),  555,  557,558. 
United  States  v.  Martin  (176  Fed. 

110),  242. 
United  States  v.  Maurer  (187  Fed. 

127),  555. 
United  States  v.  Mellin    (53  Fed. 

229),  435. 
United   States .  v.   Milwaukee   etc. 

Co.  (145  Fed.  1007),  532. 
United  States  v.  Michigan  Cent.  R. 

Co.  (43  Fed.  26),  435. 
United  States  v.  Michigan  Cent.  R. 

Co.   (122  Fed.  544).  310. 
United  States  v.  Morsraan  (42  Fed. 

448),  222. 
United  States  v.  Mosley  (187  U.  S. 

322,  47  L.  Ed.  198),  502. 
United  States  v.  Nelson   (52  Fed. 

646),  554. 


United  States  v.  N.  T.,  N.  H.  &  H 

(212  U.  S.  509,  53  L.  Ed.  629) 

528. 
United  States  v.  N.  Y.  Cent.  &  St 

L.   (168  Fed.  699),  629. 
United  States  v.  N.  Y.  Cent.  &  Hud 

son  R.  Co.  (157  Fed.  293),  528. 
United  States  v.  Norfolk  &  W.  R 

Co.   (109  Fed.  831),  341,  520. 
United  States  v.  Northern  Pac.  R 

R.  Co.  (120  Fed.  546),  91. 
United  States  v.  Northern  Securi 

ties   Co.    (193   U.    S.   197,   48   L. 

Ed.  679,  120  Fed.  721),  122,  162, 

537. 
United  States  v.  Oregon  R.  &  N.  Co. 

(163  Fed.  642),  629. 
United    States    v.    Oregon    Short 

Line   (160  Fed.  526),  629. 
United    States    v.    Oregon    Short 

Line  Ry.  Co.  (180  Fed.  483),  600. 
United  States  v.  Patten   (187  Fed. 

664),  555,  557,  558. 
United    States    v.    Patterson     (55 

Fed.  605),  549. 
United    States    v.    Penn.    Ry.    Co. 

(153  Fed.  625),  534. 
United  States  v.  Philadelphia  &  R. 

Ry.  (160  Fed.  696),  600. 
United    States    v.    Pomeroy     (152 

Fed.   279),   534. 
United    States   v.    Price    (96   Fed. 

960),  449. 
United  States  v.  Railroad  Co.   (81 

Fed.  783),  220,  225. 
United   States  v.   Sanche    (7  Fed. 

715),  151,  152. 
United  States  v.  Seaboard  R.  Co. 

(82  Fed.   563),  225. 
United  States  v.  Sioux  City  etc.  Co. 

(162  Fed.  556),  629,  630. 
United    States    v.    Southern    Pac. 

(157  Fed.  459),  628,  629. 
United  States  v.  Southern  Ry.  (164 

Fed.  347),  587.  ' 


732 


TABLE   OF   CASES. 


[references  are  to  pages.] 


United  States  v.  Stearns  S.  &  L. 

Co.    (165   Fed.   735),  530. 
United  States  v.  Standard  Oil  (148 

Fed.  719),  534. 
United  States  v.  Standard  Oil  of 

Ind.     (170    Fed.    988,    155    Fed. 

305),  530. 
United   States  v.  Standard  Oil  of 

N.  J.  (173  Fed.  177),  134,  545. 
United  States  v.  Stephens  (44  Fed 

132),  433. 
United  States  v.   Stockyards  Ter 

minal  Co.    (172  Fed.   452),   629 
United  States  v.  St.  Joseph  Stock 

yards  (181  Fed.  625),  628,  630. 
United  States  v.  St.  Louis  etc.  Dist 

Co.   (154  Fed.  516),  595. 
United  States  v.  Swift   (186  Fed 

1002),  559. 
United  States  v.   Swift   (122  Fed 

529),  130,  157,  539. 
United  States  v.  Thomas  (145  Fed 

74),  532. 
United    States  v.   Tozer    (39    Fed 

269),  288. 
United    States    v.    Trans-Missouri 

Freight  Ass'n  (166  U.  S.  290,  41 

L.  Ed.  1007),  162. 
United  States  v.  Union  Pac.  R.  R. 

(187  Fed.  102),  128. 
United  States  v.  Union  Pac.  Ry.  Co. 

(169   Fed.   65),  629,   630. 
United  States  v.  U.  S.  Fidelity  Co. 

(178  Fed.  721),  27. 
United  States  v.  Vacuum  Oil  Co. 

(158  Fed.  536),  530. 
United  States  v.  Virginia  etc.  Co. 

(163  Fed.  66),  558. 
United  States  v.  Weber  (114  Fed. 

950),  146. 
United  States  v.  West  Va.  &  N.  R. 

Co.   (125  Fed.  252),  341,  520. 
United    States    v.    Westman    (182 

Fed.  1017),  13. 
United    States    v.    Williams    (159 

Fed.  310).  242. 


United  States  v.  Wood   (145  Fed. 

405),  531. 
United     States     v.     Workingmen 

Amalgamated    Ass'n    .(54     Fed. 

994),  146,  157,  158,  54"?. 
United  States  ex  rel.  v.  B.  &  O.  R. 

Co.  (215  U.  S.  — ,  54  L.  Ed.  292), 

480. 
United  States  ex  rel.  Com.  v.  K. 

&   S.   R.   R.   Co.    (81   Fed.   Rep. 

783),   508. 
United   States   ex  rel.  v.   Norfolk 

&  W.  Ry.  (143  Fed.  266),  520. 
United  States  ex  rel.  v.  Oregon  R. 

&  N.  Co.    (159  Fed.  975),  340. 
United  States  ex  rel.  Pitcairn  Coal 

Co.  V.  B.  &  O.  R.  Co.    (154  Fed. 

108),  345,  480. 
United  States  ex  rel.  v.  U.  S.  Exp. 

Co.  (180  Fed.  1006),  34. 
United  States  to  use  v.  Fidelity  & 

Guaranty  Co.  (178  Fed.  721),  27. 
United  States  Fidelity  &  G.  Co.  v. 

Commonwealth   of  Ky.    (112   S. 

W.  314),  13. 
United     States     Tobacco     Co.     v. 

American    Tob.    Co.    (163    Fed. 

701),  544. 


V. 


Van  Brimmer  v.  T.  &  P.  R.  R.  Co. 

(190  Fed.  394),  621. 
Vance  v.  Vandercook    (170   U.   S. 

438,  42  L.  Ed.  1100),  34,  55. 
Van  Patten  v.  C.  M.  &  St.  P.  R. 

Co.   (81  Fed.  545,  74  Fed.  981), 

73,  250,  417. 
Veazie   Bank   v.   Fenno    (8   Wall. 

533,  19  L.  Ed.  482),  107. 
Vegalhahn  v.   Hunter    (167  Mass. 

62),  155. 
Virginia   Rate   Cases    (211    U.    S. 

210,  53  L.  Ed.  150),  85,  190,  251. 
Virtou  V.  Creamery  Co.   (179  Fed. 

115),  131,  138,  551. 


TABl-E   OP   CASES. 


733 


[REFEUENCf:S  AUK  TO   TACFS.] 


Voelkcr  v.  Railroad  Co.  (116  Fed. 
867),  589. 

W. 

Wabash  R.  Co.  v.  Hannahan  et  al. 

(121  Fed.  563),  145,  161,  434. 
Wabash  R.  Co.  v.  Illinois  (118  U. 

S.   557,  30  L.  Ed.  244),  54. 
Wabash  Ry.  Co.  v.  U.  S.  (168  Fed. 

1),  595,  604. 
Wabash   St.   L.   &   Pac.   R.   Co.   v. 

Illinois    (104  111.  476),,  64,  76. 
Walker  v.  Cronin  (107  Mass.  555), 

156. 
Walker   v.   Keenan    (19    C.   C.   A. 

668,  73  Fed.  755,  64   Fed.   992), 

237,  407. 
Wall  V.  Norfolk  &  W.  R.  Co.    (52 

W.  Va.  485,  64  L.-R.  A.  501),  58. 
Walling    V.    IMifhigan    (116    U.    S. 

446,  29  L.  Ed.  691),  55. 
Ware-Cramer  Tob.   Co.   v.   Ameri- 
can   Tob.    Co.     (180    Fed.    160), 

544. 
Waterhouse    v.    Comer     (55    Fed. 

149),    146,    548. 
AVaters-Pierce    Oil    Co.    v.    Texas 

(177  U.  S.  28,  44  L.  Ed.  657),  29. 
Watson  V.  St.  Louis  I.  M.  &  S.  Ry. 

Co.    (169  Fed.  942),  617. 
Weber  v.  Virginia  (103  U.  S.  344. 

26  L.  Ed.  565),  50. 
Webster  Coal   Co.  v.   Cassat    (207 

U.  S.  181,  52  L.  Ed.  160),  429. 
Weems  S.  B.  Co.  v.  People's  S.  B. 

Co.    (214    U.    S.    344,    53    L.    Ed. 

1024),  340. 
Welton  V.  Missouri   (91  U.  S.  1.  c. 

280.  23  L.  Ed.  349),  39,  101. 
West  V.  Kansas  Nat.  Gas  Co.  (221 

U.  S.  229,  55  L.  Ed.  716),  22,  25. 
Western  etc.  Co.  v.  Ann  Arbor  R. 

Co.    (178   U.    S.    239,    44    L.    Ed. 

1053),  90,  179. 


W(  stern  N.  Y.  &  P.  R.  Co.  v.  Penn 

Refining    Co.     (137     Fed.    343), 

492. 
Western   Trunk   Line  Case    (20    I. 

C.  C.  R.  307),  255. 
Western    Union    Tel.    Co.    v.    Call 

Pub.    Co.    (181    U.    S.    92,    45    L. 

Ed.   765),  70,  120,  284. 
Western  Union  Tel.  Co.  v.  Childs 

(214    U.   S.  274,   53  L.   Ed.   994), 

42. 
Western  Union  Tel.  Co.  v.  Colman 

(216  U.  S.  1,  54  L.  Ed.  355),  42. 
Western   Union    Tel.   Co.  v.   Com- 
mercial   Union    Co.    (218   U.    S. 

408,  54  L.  Ed.  1088),  42. 
Western    Union    Tel.   Co.   v.    Gott- 

leib    (190   U.   S.   412,   47   L.    Ed. 

1116),  36. 
Western  Union  Tel.  Co.  v.  James 

(162  U.  S.  650,  40  L.  Ed.  1105). 

42. 
Western  Union  Tel.  Co.  v.  Kansas 

(216  U.  S.  1,  54  L.  Ed.  355),  27 

67. 
Western  Union  Tel.  Co.  v.  Massa 

chusetts    (125   U.    S.    530,    31   L, 

Ed.    790),    36,   90,    195. 
Western  Union  Tel.  Co.  v.  Pendle 

ton    (122    U.    S.    347,    30   L.   Ed 

1187),  13,  42. 
Western  Union  Tel.   Co.  v.   Penn 

R.  R.  Co.    (195  U.   S.   594,  49  L 

Ed.  312),  90. 
Western   Union    Tel.    Co.   v.   Taf, 

gard  (163  U.  S.  1,  41  L.  Ed.  49) 

36. 
Westmoreland     &     Cambria     Nat 

Gas  Co.  V.  Dewitt    (130  Pa.   St 

235),   23. 
Wheaton   v.   Donaldson    (8   Peters 

1.  c.  658,  8  L.  Ed.  1079),   69. 
Wheeler-Stenzel  Co.  v.   Nat.  Win- 
dow Glass  Co.    (152   Fed.  864), 

543. 


734 


TABLE   OP   CASES. 


[references  are  to  pages.] 


AVhittaker  v.  I.  C.  Ry.    (176  Fed. 

130),   618. 
Whitwell   V.   Continental   Tobacco 

Co.    (125   Fed.   454,   63   C.   C.   A. 

290),   133,   137,   545,   552. 
Wickwire  Steel  Co.  v.  New  York 

Central  Co.  (181  Fed.  316),  425. 
Wight  V.  United  States   (167  U.  S. 

512,    42    L.    Ed.    258),    278,    286, 

297,   310. 
Wilcox    V.    Consolidated    Gas    Co. 

(212   U.   S.   19,   53    L.   Ed.    399), 

191,   195,   199,   254. 
Williams  v.   Arkansas    (217  U.   S 

79,  54  L.  Ed.  673),  209. 
Willimette    Bridge    Co.    v.    Hatch 

(125  U.  S.  1,  31  L.  Ed.  629),  87, 
Wilmington  &  W.  R.  Co.  v.  R.  R. 

Commissioners     (90     Fed.     33), 

184. 
Wilson  V.  Atlantic  Coast  Line  R. 

Co.    (129  Fed.  774),  290. 
Wilson  V.  Black  Bird  Creek  Marsh 

Co.  (2  Peters,  245,  7  L.  Ed.  412), 

38. 
Wilson  V.  U.  S.  (220  U.  S.  — ,  55  L. 

Ed.   — ),    446,   448. 
Windsor  Coal  Co.  v.  C.  &  A.  R.  Co. 

(52  Fed.  716),  248,   249. 


Winkler    v.   Pennsylvania   R.    Co. 

(53  Atl.  Rep.  90),  589. 
Winslow  V.  Atl.  Coast  Line  (60  S. 

E.  709,  79  S.  C.  344),  61. 
Wisconsin  &  C.  R.  Co.  v.  Jacobson 

(179  U.  S.   287,  45  L.   Ed.   194), 

202,  204. 
Wisconsin  &  M.  R.  Co.  v.  Powers 

(191  U.   S.  379,  48   L.  Ed.  229), 

36. 
Woodruff  V.  Parham   (8  Wall.  123, 

19  L.  Ed.  382),  7,  15,  30. 
Woodside  v.  Tonapah  R.  Co.   (184 

Fed.  358),  175,  186. 
Worcester  v.  Georgia   (6  Pet.  515, 

8  L.  Ed.  483),  6. 


Y. 


Yellow  Pine  Rate  Case   (206  U.  S. 

441),  261. 
Young  V.  Kansas  City,  St.  J.  &  C. 

B.    R.    Co.    (33    Mo.    App.    509), 

249. 

Z. 

Zikos   y.    Oregon    R.    R.    etc.    Co. 
(179   Fed.   893),   617,  619. 


INDEX. 

[beferences  ake  to  sections.] 

A 

ACCIDENT  LAW  OF  MARCH  3,  1901  (see  Appendix). 
ACCESSORIAL  SERVICES   (see  Cabtage,  Stobage,  Deliveey,  Demuk- 

KAGE) 

under  Interstate  Commerce  Act,  152. 
must  be  rendered  equally  to  all  alike,  246. 

ACCOUNTS— 

by  railroad,  not  compelled  to  keep  separate  account  as  shipper  and 
carrier,  214. 

ACTS  IN  THE  REGULATION  OF  COMMERCE  (see  Amendments)  — 
July  1,  1862,  Government  aided  Pacific  Railroads,  55. 
June  15,  1866,  42. 

scope  and  purpose  of,  42. 
did  not  compel  through  routing,  42. 
did  not  interfere  with  State  police  laws,  42. 
did  not  interfere  with  State  Sunday  laws,  42. 
did  not  exempt  interstate  roads  from  attachment  and  garnish- 
ment, 42. 
July  24,  1S66, 

prohibits  State  monopolies  in  interstate  telegraph  business,  55. 

permissive  only,  55. 

does  not  grant  telegraph  company  eminent  domain  over  road's 

property,  55. 
does  not  apply  to  telephone  companies,  7,  55. 
May  29,  1884,  Bureau  of  Animal  Industry,  58. 
June  29,  1886,  authorizing  incorporation  of  national  trades  unions. 

89. 
Aug.  7,  1888,  supplementary  to  the  Act  of  1862,  55. 
July  2,  1890  (see  Anti-Trcst  Act). 
Aug.  30,  1890,  unconstitutional,  35. 
March  2,  1893   (see  Safety  Appliance). 
May  2,  1895,  prohibiting  interstate  carriage  of  condemned  animal 

carcasses,  58. 
Feb.  2,  1897,  prohibiting  interstate  carriage  of  obscene  literature, 
58. 


736  INDEX. 

[references  are  to  sections.] 

ACTS  IN  THE  REGULATION  OF  COMMERCE— Continued. 

June  1,  189S,  arbitration  between  carriers  and  employees,  89. 
March  3,  1899,  Secretary  of  War  vested  with  certain  powers,  57. 
May  25,  1900,  prohibiting  interstate  carriage  of  game  unlawfully 

killed,  58. 
March  3,  1901,  Accident  law  (see  Appendix). 
May  9,  1902,  police  power  of  State  extended  to  oleomargarine,  58. 
July  1, 1902,  prohibiting  interstate  carriage  of  dairy  products  falsely 

labeled,  58. 
Feb.  2,  1903,  respecting  admissions  of  live  stock  into  State,  58. 
Feb.  25,  1903,  immunity  to  testifying  witnesses,  488. 
June  30,  1906,  Food  and  Drug,  58. 
June  30,  1906,  Meat  Inspection,  58. 
June  30,  1906,  Quarantine,  58. 

June  11,  1906,  National  Employers'  Liability,  58,  62,  527. 
April  22,  1908,  Employers'  Liability,  530. 
March  4,  1907,  Hours  of  Service,  540,  162. 
June  25,  1910,  White  Slave,  58. 

ACTIONS  AT  LAW  (see  Commencement  of  Actions)  — 
under  section  7,  Anti-Trust  Act,  479. 
under  section  8,  Interstate  Commerce  Act,  319. 

ADDYSTON  PIPE  TRUST  CASE,  78,  79,  84,  435. 

ADJOURNMENTS  AND  EXTENSIONS  OF  TIME   (see  Rules  OF  Peac- 

•  tice,  rule  8,  page  658). 

ADMIRALTY  AND  MARITIME  JURISDICTION— 
not  limited  to  tide  waters,  13. 
extends  to  public  navigable  lakes  and  rivers,  13. 
what  are  navigable  waters,  13. 

boundaries  and  limits  of  matters  of  judicial  cognizance,  15. 
extends  to  Erie  Canal,  14. 
jurisdiction  of  Federal  Courts,  15. 

ADVANCE  OF  RATES— 

without  reason,  subject  of  investigation,  306. 

AFFREIGHTMENT— 

effect  of  rebates,  on  contract  of,  225. 

AGENT— 

act  of,  binds  carrier,  422. 

ALIENS— 

power  to  exclude,  2,  5. 

immigration  of  (see  Department  of  Commerce  and  Labor,  sec.  7), 
495. 


INDEX.  737 

[references  are  to  SECTION'S.] 

AMENDMENTS  TO  THE  INTERSTATE  COMMERCE  ACT  (see  Inter- 
ST^ATE  Commerce  Acts)  — 
March  2,  1S99. 

mandamus  to  compel  carrier  to  furnish  equal  facilities,  51,  419. 
Feb,  11,  1893. 

enforcement  of  self-incriminating  testimony,  51,  345,  488. 
Feb.  11,  1903. 

Expedition  Act,  51,  490. 
Feb.  19,  1903   (see  Elkins  Act). 
June  29,  1906,  51. 
April  13,  1908,  51. 
June  18,  1910,  51. 

AMENDMENTS  OF  PLEADINGS  (see  Rules  of  Practice,  rule  7,  page 

658). 
AMERICAN  TOBACCO  CASE,  77,  78,  447,  473.  *' 

ANIMAL  INDUSTRIES  ACT— 
scope  of,  35. 

ANSWERS  (see  Rules  of  Practice,  rule  4,  page  657).  ' 

ANNAPOLIS  CONFERENCE— 

in  relation  to,  constitutional  convention,  1. 

ANTI-TRUST  ACT  (see  Restraint  of  Trade  Conspiracy) — 
Section  1,  432. 
Section  2,  454. 
Section  3,  464. 
Section  4,  466. 
Section  5,  474. 
Section  6,  476. 
Section  7,  478. 
Section  8,  489. 
passage  of,  72. 
purpose  of,  72. 
general  provisions,  73,  432. 
common-law  protection  irrespective  of  act,  74. 
constitutionality  of,  75,  432. 
construction  of,  by  Supreme  Court,  77. 
not  inconsistent  with  Interstate  Commerce  Act,  76. 
railroads  included  in,  76. 

territories  and  District  of  Columbia  included.  465. 
reasonable  construction  and  reasonable  restraints  distinguished,  77, 
direct  and  incidental  restraint,  78. 

Standard  Oil  Case,  78. 
what  monopolies  denounced,  77,  76. 

agreements  for  charges  for  local  facilities  not  included,  7S. 
47 


738  INDEX. 

f  REFERENCES  ARE  TO  SECTIONS.] 

ANTI-TRUST  ACT— Continued. 

not  restraint  of  trade,  illegal,  but  contract  in  restraint  thereof,  78. 

no  application  to  commerce  within  a  State,  84. 

State,  holding  companies,  85,  108,  434. 

application  to  combinations  of  labor  and  capital,  91,  449. 

employment  of  common  agency,  450. 

no  distinction  as  to  commodities  subject  of  contract,  87. 

necessities  of  life  on  same  footing  with  other  articles,  78,  87. 

combination  between  interstate  railroads  for  suppression  of  com- 
petition, 76. 

combination  to  regulate  competition  and  rates  by  pooling,  76. 

restrictive  sales  in  interstate  commerce,  86. 

procedure  under  the  Act,  467. 

agreements  within  Act,  444. 

not  to  sell  to  persons  who  cut  prices,  444. 
inducement  to  maintain  arbitrary  prices,  444. 

interstate  transportation  is  subject  to  the  Act,  434. 

applies  to  transportation  wholly  within  a  territory,  142. 

Addyston  Pipe  Trust  Case,  435. 

California  Tile  Trust  Case,  436. 

Tennessee,  California  and  Ohio  Coal  Cases,  437. 

Chicago  Meat  Trust  Case,  438. 

Washington  Shingle  Trust  Case,  439. 

incidental  restraint  of  trade  not  violative  of  the  Act,  440,  441,  445. 

Kansas  City  Live  Stock  Exchange  Case,  441. 

Chicago  Board  of  Trade  Case,  442. 

Calumet  and  Heckla  Mining  Case,  442. 

Standard  Oil  Case,  777,  446,  472. 

American  Tobacco  Case,  78,  447,  473. 

Powder  Trust  Case,  448. 

agreements  not  within  the  Act,  441,  445. 

acts  done  outside  of  U.  S.,  451. 

patent  monopoly  not  within  the  Act,  452,  485. 

secret  formula  contracts,  453. 

prevention  of  dealing  with  competitors  through  payment  of  rebates 
not  unlawful,  445. 

restriction  of  sales  to  certain  territory  not  unlawful,  445. 

Incidental  restraint  of  trade  through  purchase  of  competitors,  445. 

agreement  of  manufacturers  to  fix  arbitrary  price  on  goods  not  un- 
lawful, 445. 

agreements  not  to  enter  into  competition,  445. 

criminal  provisions  of  the  Act,  332,  454,  455,  464. 

indictment  under,  essentials  of,  445,  459. 

suit  by  Government  for  dissolution  procedure,  471. 

decree  in  Standard  Oil  Case,  472. 


INDEX.  739 

[REFEHENCES  ABE  TO  SECTIONS.] 

ANTI-TRUST  ACT— Continued. 

decree  in  American  Tobacco  Case,  473. 

Chicago  Meat  Trust  indictment,  456. 

criminal  conspiracy  under  Act,  457. 

limitations  of  prosecutions  under,  458. 

sufficiency  of  indictment  for,  459. 

corporations  indictable,  4C0. 

conspiracy  to  run  a  corner,  461. 

injunction  under  the  Act  limited  to  the  Government,  467,  468. 

State  cannot  enjoin  under  the  Act,  470. 

State  not  a  person  or  corporation,  470,  481. 

bringing  in  new  parties  and  service  of  subpoenas,  474. 

construction  of  sec.  5,  475. 

seizure  and  condemnation  of  property,  477. 

private  action  at  law  under  section  7,  479. 

construction  of  by  Supreme  Court,  479. 

measure  of  proof,  480. 

petition  when  sufficient,  482, 

The  Danbury  Hat  Case,  483. 

plea  of  nolo  contendere,  463. 

measure  of  damages,  484. 

limitations  of  private  actions,  487. 

the  Act  as  defense  in  suits  by  alleged  illegal  combinations,  485. 

the  Act  as  defense  in  patent  litigation,  485. 

no  recovery  under  Act  for  violation  of  Interstate  Commerce  Act,  4S6. 

term  "person"  or  "persons"  include  what,  489. 

self-incriminating  testimony,  488. 

commodity  may  be  subject  of  illegal  agreement  in  restraint  of  trade, 
yet  subject  to  State  taxing  power,  81. 

does  not  apply  to  agreements  between  business  men  for  better  con- 
duct of  their  business,  though  incidentally  affecting  interstate 
commerce,  78. 

interstate  contract  unenforcible   at  common  law  violative  of  the 
Act,  83. 
APPEAL  (see  Expeditiox  Act  of  Feb.  11,  1903)  — 

right  of,  393. 

right  of  under  section  16  to  Commerce  Court,  393. 

under  Fourteenth  Amendment,  111. 

ARBITRATION  ACT— 

passed  June  1,  1898,  89. 
the  courts  on,  90. 

"ARRIVAL"— 

meaning  of  term  in  Wilson's  Original  Package  Bill,  18,  56. 
contract  for,  at  given  time  enforcible,  246. 


740  INDEX. 

[references  are  to  sections.] 
ARTICLES  OF  CONFEDERATION,  1. 

ASH  PAN  ACT  (see  Appendix). 

ASSIGNMENT— 

cause  of  action  may  be,  324. 

ASSOCIATIONS— 

are  persons  within  meaning  of  Anti-Trust  Act,  489. 

ASSUMPTION  OF  RISK  (see  Safety  Appliance  Act). 

ATTACHMENT— 

of  foreign  railroad  cars,  39. 

AUTOMATIC  COUPLERS  (see  Safety  Appliance  Act,  sec.  2). 

"AVERAGE  HABITUAL  USE"— 
rule  of,  21. 


BANKRUPTCY— 

power  to  establish  uniform  system,  45. 

BASING  POINT  SYSTEM— 
meaning  of,  237. 
not  illegal,  237. 
not  exempt  from  regulating  power  of  Commission,  238. 

BELT  RAILROAD— 

subject  to  State  control  when  doing  local  business,  280. 

BILL  OF  EXCHANGE— 

not  interstate  commerce,  8. 

BILL  OF  LADING — 

when  on  interstate  commerce  State  tax  on- void,  8,  40,  n. 

when  on  foreign  shipment  exempt  from  State  or  Federal  taxation,  8. 

BLANKET  RATES   (see  Grouping  of  Rates). 

BOOKS  AND  PAPERS  (see  Immunity,  sec.  12)  — 

Amendments  of  1893  only  refers  to  testimony  before  the  Commis- 
sion, 345. 

Section  9,  compelling  production  of,  unconstitutional,  332. 

compulsory  production  of  before  Commission,  362. 

compulsory  production  of  under  Expedition  Act,  491. 

compulsory  production  not  enforced  when  party  or  corporation 
thereby  exposed  to  penalty  or  forfeiture,  345. 

distinction  by  Commission  between  those  of  carriers  and  strangers, 
362. 


INDEX.  741 

[beferences  are  to  sections.] 

BOOKS  AND  PAPERS— Continued. 

distinction   by  Commission  between  "private"  and  "public"  docu- 
ments, 362. 
may  be  summoned  before  commission  from  any  part  of  the  United 
States,  351. 

BOUNDARIES  ON  SEA— 

State  may  define,  subject  to  limitations,  11. 

BOYCOTTS  (see  Illegal  Combinations,  Strikes  and  Boycotts). 

BRAKES— 

driving  wheel  and  train  brakes  required    (see  Safett  Appliance 
Act,  sec.  1). 

BRANCH  LINE— 

point  on  may  be  charged  higher  rate,  24G. 

BRIDGES— 

not  common  carriers,  7. 

power  of  Congress  to  authorize  between  States,  54. 

regulation  of  over  navigable  streams,  25,  54,  57. 

when  included  in  term  "Railroad,"  sec.  1,  148. 

power  of  Congress  to  charter  between  States,  67. 

State  regulation  of  toll,  on  interstate  void,  7. 

when  carrying  on  interstate  commerce,  16,  34. 

State  cannot  regulate  tolls  on  interstate,  7,  37. 

as  affecting  unjust  discrimination  against  locality,  242. 

BRIEFS  (see  Rules  of  Practice,  rule  14,  page  661). 

BROKER— 

State  tax  on  money  or  exchange  broker  not  a  regulation  of  com- 
merce, 8. 

BROTHERHOOD  OF  LOCOMOTIVE  ENGINEERS— 
rule  12  of,  violated  section  10  of  the  Act,  336. 

BURDEN  OF  PROOF  (see  Pbesumptions)  — 
follows  general  rules,  361. 

on  carrier  when  seeking  relief  under  section  4,  361. 
on  party  complaining,  361. 

on  complainant  shipper  before  the  Commissioner,  120. 
on  carrier  to  show  dissimilar  circumstances  and  conditions  under 

section  4,  293. 
on  carrier  where  there  is  a  departure  from  the  rule  of  the  law,  361 
on  carrier  to  show  unreasonable  limitation  fixed  by  State,  167. 
on  complainant  to  show  carrier  has  exceeded  reasonable  standard, 

167. 


742  INDEX. 

[refebences  are  to  sections.] 

BURDEN  OF  PROOF— Continued. 

In  prosecution  under  Safety  Act,  518. 

in  court  after  finding  of  Commission,  390. 

on  complainant  to  show  unreasonableness,  176. 

on  carrier  where  departure  from  equal  rates  on  several  branches  of 

the  road,  361. 
on  carrier  where  facts  justifying  disparity  peculiarly  within  his 

knowledge,  361. 

BUREAU  OF  COMMERCE  (see  Dep.^rtmext  of  Commerce  and  Labor). 

BUREAU  OF  CORPORATIONS    (see  Department  ob"  Commerce  and 
Labor), 

BUREAU  OF  LABOR—  . 

created  under  Act  of  June  27,  1884,  88. 
made  Department  of  Labor  June  13,  1888,  88. 

BUREAU  OF  MANUFACTURE— 
established  Feb.  18,  1903,  59. 


CALIFORNIA  COAL  CASE,  437. 

CALIFORNIA  TILE  TRUST  CASE,  436. 

CALUMET  AND  HECKLA  MINING  COMPANY  CASE,  443. 

CANALS  (see  Erie  Canal)  — 

between  points  in  same  State,  subject  to  State  control,  24. 

CAPITALIZATION  OF  RAILROAD— 
as  basis  for  rate  making,  168,  177. 

CARCASSES— 

interstate  carriage  of  condemned  prohibited,  58. 

CARRIERS   (see  Railroads)  — 

status  as  shippers  and  consignees,  310. 

CAR  SERVICE— 

meaning  of  "car"  in  Safety  Appliance  Act,  504. 
Commissioner's  report  for  1904  concerning,  253. 
Commission's  ruling  in  coal  car  service  sustained,  251. 
order  of  Commission  requiring  counting,  250. 
powers  of  Commission  in,  372. 
when  "engaged"  in  interstate  commerce,  508. 
common-law  duty  to  furnish,  250. 
undue  preference  in,  250,  253. 


INDEX.  743 

[referencek  are  to  sections.] 

CAR  SBRY ICE— Continued. 

may  be  against  localities  or  individuals,  2oO. 
compulsion  by  way  of  mandamus,  250,  251. 
no  defense  for  refusal  to  furnish,  that  cars  can  be  more  profitably 

employed  elsewhere,  2riO,  251. 
delay  in  furnishing  cars,  when  discrimination,  250. 
discrimination  in  carrier's  own  favor,  253. 
furnishing  of  cars  on  spur  traclt  not  discrimination,  250. 
no  duty  to  notify  shipper  when  he  can  obtain  cars,  250. 
no  duty  of  carrier  to  meet  extraordinary  demand,  250. 
discrimination  in  private  cars,  195,  251,  253. 
two  classes  whether  or  not  owner  interested  in  contents,  253. 
rules  and  rates  of  carriage  must  be  published,  311. 
tank  cars,  duty  to  furnish  impartially,  253,  271. 
carrier  may  acquire  cars  as  it  pleases,  233,  254,  256. 
leasing  of  car  does  not  carry  right  of  exclusive  use  by  owner,  257. 
no  discrimination  against  locality  where  lack  of  cars,  250. 
shortage  how  dealt  with,  419,  420. 
carrier  not  responsible  for  detention  of  cars,  250. 
refusal  to  receive  from  connecting  line  (see  Saiety  Appliance  Act, 

sec.  3). 
may  refuse  to  haul  private  cars,  253. 
state  cannot  impose  penalty  on  carriers  for  delay  in  furnishing 

cars,  40,  n. 
common-law  duty  requires  furnishing  of  refrigerator  cars,  154. 

CARGO  RATES— 

discriminative,  209. 
CARLOADS  AND  LESS  THAN  CARLOAD  RATES— 

legality  recognized,  205. 

must  bear  reasonable  relation,  205. 

discriminations  in,  208. 

discrimination  based  on  ownership  of  cargo,  206. 

proper  differential  between,  from  Middle  West  to  Pacific  Coast,  205. 

create  dissimilar  circumstances  and  conditions,  205. 

differential  between  may  effect  unjust  discrimination,  205,  246. 

minimum  charge  to  be  for  one  hundred  pounds,  206. 

forwarding  agents,  extra  charge  unjust  discrimination,  207. 
CAHRIER  AND  SHIPPER  THE  SA:\IE— 

carrier  may  not  give  itself  undue  preference,  252. 

CARTAGE  (see  Storage,  Delivfry)  — 

Commission  may  require  publication  of  charges  for  under  section  6, 

149,  311. 
railroad  not  bound  by  custom  to  pay  charges,  149. 
unjust  discrimination  and  undue  pieference  may  be  based  on,  149, 

246. 
not  in  general  a  terminal  expense,  149,  311. 


744  ixDEX. 

[references  are  to  sectioxs.] 

CATTLE  (see  Differentials  in  Rates,  Live  Stock). 

CHANCERY  (see  Equity  Proceedings). 

CHANNELS,   IMPROVEMENT  OF  NAVIGABLE    (see  Regulation  of 
Commerce,  Concurrent  Jurisdiction). 

CHARGES  REASONABLE  AND  JUST   (see  Rates)  — 
under  state  statute,  163. 

provision  of  first  section  affirmance  of  common  law,  161. 
rule  in  England,  161. 

question  of  reasonableness  one  of  fact,  162,  230. 
in  absence  of  legislation  court  must  decide  vfhat  is  reasonable,  161. 
practical  difficulties  in  enforcement  of  rule,  162. 
rate  unreasonable  when  paid  may  become  reasonable  before  trial 

in  court  finished,  162. 
for  local  facilities  not  within  anti-trust  act,  78. 
reconsignment,  259. 

CHARTER  CORPORATE— 

State  may  alter,  amend  or  repeal,  when,  129. 

federal  power  of  granting,  67. 

power  to  grant  not  within  enumerated  powers  of  Congress,  67. 

CHICAGO  MEAT  TRUST  CASE,  438. 

CHOICE  OF  ROUTE— 

undue  preference  in  denying  shipper,  263. 

CIGARETTES— 

State  may  declare  how  far  to  be  sold,  10. 

State  may  prohibit  sale  entirely  after  leaving  original  package,  10. 

cannot  prohibit  importation  in  original  package,  10. 

CIRCUIT  COURT  OF  APPEALS  (see  Federal  Courts)  — 
jurisdiction  on  appeal  in  contempt  cases,  101. 

CIRCUMSTANCES  AND  CONDITIONS— 

of  through  and  local  traffic  are  dissimilar,  199. 
not  made  dissimilar  by  quantity  of  freight,  202. 
rendered  different  by  accessorial  services,  204. 
employment  of  forwarding  agent  as  creating  dissimilar,  207. 
increased  cost  of  service  resulting  from  stoppage  create  dissimilar, 

199. 
of  carload  and  less  than  carload  are  dissimilar,  199,  205,  206. 
ocean  transportation  creates  dissimilar,  233. 
dissimilarity  of,  renders  preference  not  undue,  230,  231,  236. 
under  fourth  section,  236. 

competition  may  create  dissimilar,  199,  231,  233,  236,  290. 
under  second  section  not  rendered  dissimilar  by  competition,  200. 


INDEX.  745 

[BEFEBENCES  ABE  TO  SECTIONS.] 

CIRCUS  TRAIN— 

carrier  may  refuse  to  transport  except  under  special  contract  lim- 
iting liability,  204. 

CITY   ORDINANCE— 

regarding  stone,  when  void,  40,  n. 

regarding  street  railroad  in  interstate  commerce,  40,  n. 

CLASSIFICATION   (see  Interstate  Commerce  Act)  — 

commodity,  when  not  classified,  given  commodity  rate,  272. 

undue  preference  in,  275, 

complaint  concerning,  against  whom  made,  359. 

consultation   of  carriers  in  classification  not  illegal  combination, 

274. 
proof  of  undue  preference  in,  necessary  to  obtain  order  of  change, 

275,   277. 
in  State  railroad  legislation,  131. 
reasonable  regulations  in  classification,  277. 
justice  of  classification  determined  by  comparison,  275. 
power  of  Commission  in  correcting,  276. 
no  contract  right  to  special  classification,  276. 
transfer  from  low  to  high  class  may  be  unlawful,  275. 
governing  principles  of  freight  classification,  275. 
specific  commodities. 

dried  fruits  and  raisins,  275. 

hub  blocks  and  lumber,  275. 

railroad  ties  and  rough  lumber,  275. 

Hostetter's  Stomach  Bitters  with  other  liquids,  275. 

patent  medicines  and  ale,  beer,  mineral  water,  275. 

toilet  soap  and  laundry  soap,  275, 

celery  and  vegetables,  275. 

open  end  envelopes  and  merchandise  envelopes,  275. 

Iron  pipe  fittings  in  pipes  and  in  barrels,  275. 

flour  and  cereal  products,  275. 

cow  peas  and  grain,  and  fertilizers,  275. 
uniform  classification  recommended,  273. 

COAL  (see  Differentials  in  Rate)  — 

desirable  traffic  owing  to  small  hazard,  186. 

"00-EFFlCIENT"  POWER— 
meaning  of,  5. 

COINAGE  OF  M0NE3Y— 

power  of  Congress  over,  5. 

COIVEBINATIONS    (see  Restraint  of  Trade,  Anti-Trust  Act,  Stbikes 
AND  Boycotts,  Conspiracy,  Tenth  Section). 
other  than  in  transportation,  435. 


746  INDEX. 

[references  are  to  sectioks.] 

CX)MMi^JXCEMEXT  OF  ACTIONS— 
when  suit  begun,  382,  384. 
where  to  be  filed,  381,  382,  390. 

COMMERCE  (see  Interstate  Comjierce,  Reqxjlation  of  Commerce,  De- 
partment OF  Commerce  and  Labor) ^ 
•what  is,  7. 

not  traffic  alone,  but  intercourse,  7. 
Inaportation  the  test,  7. 
correspondence  school,  7. 
white  slave  traffic,  7,  n. 
transportation  of  passengers,  7. 
what  is  not,  8. 
insurance,  9. 
what  are  subjects  of,  10. 
oleomargarine,  10. 
tobacco,  10. 

State  cannot  determine  what  are  subjects  of,  10, 
game  and  fish,  11. 
liquor,  17. 
oil  and  gas,  12. 
manufacture  not,  433. 
sale  as  an  incident  of  manufacture  not,  433. 

COMMERCE  CLAUSE— 

in  the  Constitution  discussed,  1. 

judicial  construction  of,  6. 

rulings  of  State  courts  on,  40. 

with  reference  to  admiralty  jurisdiction,  13. 

COMMERCE  COURT  (see  Interstate  Commerce  Act,  Appendix) — 
creation  of,  53. 
membership,  53. 
jurisdiction,  53. 

rulings  on  interdependence  of  rates,  185. 
review  of  Commission's  orders,  394. 
parties  entitled  to  apply  for  review,  395. 
rules  of  practice  (see  Appendix). 

COMMISSIONER  OF  CORPORATIONS  (see  Department  of  Commerce 
AND  Labor). 

COMMERCE  COURT  ACT  (see  Appendix). 

COMMODITIES  (see  Kinds  of  Traffic,  Differentials). 

COMMODITIES  CLAUSE — 
validity  of,  157. 
rulings  on,  157. 


INDEX.  747 

TRrFKRENCKS  ARE  TO  SKCTIONS.] 

"CX)MMON  CONTROL,  MANAGEMENT,"  ETC.— 
what  constitutes,  140. 

test  of,  is  tliroiish  routing  in  interstate  commerce,  110. 
Immaterial  that  one  road  receive  sole  benefit,  140. 
express  agreement  obviated  by  acquiescence,  140 

COMMON  LAW— 

In  interstate  commerce,  46. 

Western  Union  Telegraph  Co.  v.  McCall  Pub.  Co.,  4C. 

state  regulation  under,  33. 

right  of  discriminations,  196. 

right  of  discrimination  not  unlimited,  197. 

no  obligation  to  charge  equal  rates  to  all  customers,  196. 

contract  governed  by,  when  in  interstate  commerce,  74 

contracts  in  restraint  of  trade  unen forcible  at,  74,  78,  83,  87. 

no  common  law  of  conspiracy,  87. 

COMMUTATION  RATES  (see  Sfc.  22)  — 
reasonableness  in,  181. 
jurisdiction  of  Commission  in,  418. 

COMPARISON— 

not  a  basis  for  determining  reasonableness  of  rates,  176. 

COMPETITION- 

does  not  render  circumstances  and  conditions  dissimilar  under  seo- 

tion  2,  200. 
as  affecting  through  rates,  199. 
effect  on  long  and  short  haul,  230,  292. 
burden  of  proof,  293. 

allows  giving  of  preference  or  discrimination,  230. 
at  the   seaport  renders   circumstances   and   conditions  dissimilar, 

233. 
railroad  competition  same  as  water  competition,  236. 
creating  dissimilar  circumstances  and  conditions  under  section  4, 

289,  292. 
when  with  foreign  or  other  railroads  not  subject  to  the  Act,  289. 
In  peculiar  cases  between  railroads  subject  to  the  Act,  289. 
resort  to  Commission  for  this  purpose,  292. 
preferences  of  localities  enforced  by,  not  undue,  230,  241. 
competition  between  cities  on  opposite  banks  of  rivers,  242. 
differentials  between,  243. 
application  of  the  competition  rule,  231,  232. 
qualification  in  the  apiilication  of  the  rule,  240. 
question  of  fact  whether  controlling,  236,  232. 
competition  created  by  carriers,  23G. 
basing  point  system,  237. 
natural  advantages,  241. 


748  INDEX. 

[references  are  to  sectiotts.] 
COMPLAINTS  (see  Pleadings,  Rules  of  Practice,  Rule  3,  page  656). 
COMPLIANCE  WITH  ORDERS  (see  Rules  of  Pbactice,  Rule  18,  page 
663). 

CONCURRENT  AND  EXCLUSIVE  POWERS— 
distinguished  (see  Regulation  of  Com.mebce). 

CONGRESS,  JURISDICTION  OF  (see  Regulation  of  Commeboe) — 
no  jurisdiction  over  commerce  wholly  within  one  State,  84. 
labor  legislation  of,  88. 
extent  of  power,  60. 
limitation  of  power,  64. 
the  unexercised  power  of,  60. 
co-efficient  power,   5. 

CONNECTING  CARRIERS— 

State  cannot  make  receiving  carrier  agent  of,  40,  n. 
discrimination  by  having  interest  in,  213. 
liability  for  discrimination  of  initial  carrier,  224. 
rights  as  to  milling  in  transit,  2R6. 

uniting  in  joint  tariff  not  a  standard  of  determination  of  separate 
tariff,  291. 

CONSIGNEES— 

doing  business  in  State,  16. 
CONSPIRACY  (see  Anti-Trust  Aot)— 

defined,  94. 

may  result  from  boycott,  92. 

a  misdemeanor,  not  a  felony,  94. 

essential  of  indictment  for,  94,  455,  459. 

doctrine  of  merger  inapplicable,  94. 

obstruction  to  United  States  mail,  94. 

each  conspirator  liable  for  acts  of  co-conspirator,  94. 

enforcement  of  rule  of  Brotherhood  of  Engineers  as,  94. 

conspirators  liable  for  loss  to  private  parties,  94. 

concerted  quitting  employment,  93. 

doing  a  lawful  thing  in  unlawful  manner,  94. 

conspiracy  to  run  a  corner,  indictability  of,  461. 

limitation  of  prosecutions  for,  458. 

English  legislation  on,  95. 

conspiracy   under   the   Act  distinguished  from   common   law  con- 
spiracy, 95. 

malice  in  conspiracy,  96. 

application  to  contempt  cases,  104. 

United  States  statute  concerning,  94,  336. 

under  section  10,  338. 

Incidental  interference  with  commerce  not,  93,  337. 

what  constitutes,  95,  337,  338. 


INDEX.  749 

[befebences  are  to  sections.] 

CONSPIRACY— Co?j<i?iMed. 

combination  to  compel  railroad  to  break  contract  for  use  of  cars,  92. 
as  applied  to  proceedings  for  contempt,  104. 
newspaper  reports,  etc.,  to  show  character  of,  94. 

CONTAGIOUS  DISEASES— 

State  legislation  may  exclude  persons  infected  with,   10. 

CONTEMPT  IN  UNITED  STATES  COURTS— 
proceedings  criminal  in  nature,  101. 
United  States  statute  concerning,  101. 
power  of  Congress  over,  101. 
power  to  punish  for,  at  common  law,  101. 

Interference  with  receiver  appointed  by  court  a  contempt,  101. 
not  triable  by  jury,  101. 

court  may  punish  for  crime,  though  indictable,  101. 
for  refusal  to  testify,  351. 

claim  that  proceeding  should  not  be  summary,  lOl. 
Involves  no  element  of  personal  injury,  101. 
application  of  law  of  conspiracy,  101. 
liability  not  limited  to  party  of  record,  101. 
review  of  contempt  finding  on  appeal,  101. 

only  matters  of  law  considered,  facts  of  trial  tribunal  being  con- 
clusive, 101. 
power  to  punish  for  disobedience  of  injunction,  101. 
by  railroad  employees  engaged  in  interstate  commerce,  327. 
direct  and  indirect  contempt,  102, 
criminal  and  civil  contempts,  103. 
Gomper's  case,  103,  n. 
conspiracy  and  contempt,  104. 

CONTINENTAL  TOBACCO  CASE,  83,  87. 

CONTINUOUS  CARRIAGE  (see  Through  Traffic). 

CONTRACTS   (see  Rk.straint  of  Trade,  Charters,  Anti-Trust  Act)  — 
between  shipper  and  carrier  governed  by  law  of  State  where  made, 

32. 
in  interstate  commerce  governed  by  rules  of  common  law,  66. 
in  restraint  of  trade  not  illegal  at  common  law,  74. 
secret  formula  contracts,  453. 
limiting  liability  valid,  204. 
no  contract  right  to  special  classification,  276. 
jurisdiction  of  Commission  over,  between  carriers,  378. 

CONTRIBUTORY  NEGLIGENCE    (see   S.^fety  Appliance  Act,  Anti- 
trust Act). 

CONVICTS— 

State  legislation  may  exclude,  10. 


750  INDEX. 

[references  are  to  sections.] 

CORPORATIONS— 

State  corporation  in  interstate  commerce  (see  Foreign  Corpora- 
tion). 

not  a  '-citizen"  within  meaning  of  Constitution,  16. 

a  "person"  or  "citizen"  when' necessary  to  effective  legislative  in- 
tent in  statutes,  346. 

a  "person"  within  meaning  of  14th  Amendment,  16,  111. 

requirement  of  Federal  franchise,  70. 

railroad  operating  in  several  States  corporation  of  what  State,  106. 

are  persons  within  meaning  of  Anti-Trust  Act,  489, 

relation  of  State  to  Federal  corporations,  69. 

as  to  self-incriminating  testimony,  346. 

subject  to  penalties,  346. 

subject  to  indictment,  346,  460. 

visitorial  power  over,  63. 

Federal  power  over  capitalization,  63, 

power  over  stock  and  bond  issue,  63. 

power  of  Congress  to  charter,  67. 

power  of  Congress  to  charter  bridge  across  navigable  streams,  55. 

place  of,  immaterial,  146. 

place  of,  immaterial  as  to  regulating  power,  108. 

cannot  appropriate  property  without  compensation  therefor,  22. 

conviction  for  misdemeanor,  422. 

power  of  Congress  to  charter  not  in  enumerated  powers,  67. 

CORRESPONDENCE  SCHOOLS  (see  Commerce). 

C50NSTITUTI0N— 

article  I,  section  8,  par.  3,  1. 
article  I,  section  8,  par.  18,  1. 
article  I,  section  9,  par.  5,  1. 
article  IV,  section  2,  1. 
article  VI,  par.  2,  1. 
article  I,  section  9,  par.  5,  3. 
article  III,  section  2,  par.  5,  15. 

CONSTITUTION,  AMENDMENTS  TO— 

X,  1,  5. 

XIV,  1,  111,  128. 
COPIES  OF  PAPERS  OR  TESTIMONY  (see  Rules  OF  PeactiCE,  Rule 
17,  page  663). 

CORPSE— 

not  a  subject  of  commerce,  10, 

•COSTS— 

how  levied,  381. 

how  paid  in  suits  by  Commission,  381, 


INDEX.  751 

[BEFEBENCES  ABE  TO  SECTIONS.] 

COST  OF  CARRIAGE— 

in  relation  to  receipts  as  regulating  charge,  172. 

COURTS  (see  Fedebal  Courts)  — 

no  revisory  power  after  finding  by  Commission,  391,  394. 

power  to  enforce,  testimony  before  Commission   (see  Witnesses). 

prior  leave  of,  unnecessary  to  entitle  shipper  to  proceed  against 

railroad  in  hands  of  receiver,  358. 
have  no  power  to  fix  rates,  166. 

CRIMES— 

none  at  common  law  in  United  States,  74. 
State  legislation  may  prevent  spread  of,  10. 

CROSSINGS  ON  SURFACE— 
State  may  regulate,  29. 

D 
DAIRY   PRODUCTS— 

interstate  carriage  of  falsely  labeled,  prohibited,  58. 

DAMAGES   (see  Eighth  Sectio:^;   Ninth  Section)  — 
failure  to  adjust,  33. 

measure  of  in  unjust  discrimination,  223,  367. 
proof  of,  must  be  made  by  complainant,  367. 
speculative,  not  allowed,  367. 

jurisdiction  of  Commission  in  awarding,  367,  387. 
measure  of,  where  rate  charged  exceeds  publishied  rate,  367. 
liability  of  carrier,  319. 
for  discrimination,  331. 
for  discrimination  in  car  service,  250. 
remedy  for  failure  to  render  special  service,  204. 
measure  of,  in  rate  wars,  265. 
to  through  shipment,  403,  407. 

DEFENSE— 

of  judgment  before  Commission  to  action  in  Federal  court,  332. 

individual  claimant  not  barred  by  suit  of  his  association,  332. 

of  statute  of  limitations   (see  Limitatioxs  of  Actions). 

no  defense  in  discriminations  between  persons  that  the  privilege 
may  be  withdrawn  at  will,  223. 

adoption,  printing  and  posting  schedule  of  rates  as,  164. 
DELAY— 

not  of  itself  ground  for  complaint,  359. 

in  furnishing  cars  may  effect  discrimination,  250, 
DELEGATION  OF  POWER— 

to  Interstate  Commerce  Commission,  57. 

upon  President,  57. 

upon  Secretary  of  War,  57. 


752  INDEX. 

[befebences  are  to  sections.] 

DELIVERY   (see  Storage,  Cartage)  — 

no  additional  duty  of,  imposed  by  section  1,  149. 

services  if  rendered  must  be  impartial  and  reasonable,  149,  204,  246. 

distinction  between  American  and  English  customs  of,  149. 

live  stock  and  perishable  property  require  additional  facilities  for, 

153. 
extra  charge  for  these  additional  facilities  unlawful,  153. 
railroad  may  contract  with  stock-yards  company  for  delivery  of 

live  stock,  153. 
where  consignees  off  main  line,  153. 
higher  charge  for  quick  delivery,  204. 

DEMURRAGE  CHARGES— 

undue  preference  shown  by,  246. 

unjust  discrimination  in  failure  to  collect,  215, 

uniform  rules  recommended,  245. 

on  private  cars,  254. 

DEMURRER— 

notice  in  nature  of  (see  Rules  of  Peactice,  rule  5,  page  657). 

statute  of  limitations  raised  by,  323. 
DEPARTMENT  OF  COMMERCE  AND  LABOR— 

sections  1,  2,  3,  4,  5,  494. 

section  6,  495. 

sections  7,  8,  9,  10,  11,  12,  496. 

established  by  Act  of  February  18,  1903,  59,  88,  494. 

Department  of  Labor  made  part  of,  88. 

Secretary  of  Commerce  and  Labor,  494. 

a  Cabinet  member,   59. 

what  corporation  subject  to,  59. 

Act  never  judicially  construed,  59. 

Bureau  of  Manufactures,  59,  494. 

Bureau  of  Corporations,  59,  495. 

powers  of  investigation,  494. 

report  of  Commissioner  of  corporations,  59,  n. 

Commissioner  of  Corporations,  495. 

duty  of  Commissioner,  59,  495. 

has  no  judicial  powers,  59. 

power  of  Commissioner,  59,  495. 

Deputy  Commissioner,  495. 

employees,  495. 

immunity  to  witnesses  testifying  before,  495. 

compilation  and  publication  of  information,  495. 

DEPARTMENT   OF   LABOR— 

established  June  13,  1888,  88.  494. 

duties  of  Commissioner,  88,  89. 

made  part  of  the  Department  of  Commerce  and  Labor,  494. 


INDEX.  753 

[referk.ncks  aki;  to  sections.] 

DEPOSITIONS  (see  Rules  of  Practice,  Rule  12,  page  660)  — 
taken  by  order  of  Commission,  343. 
notice  must  be  given,  343,  359. 
testimony  by  deposition  may  be  compolled,  343. 
manner  of  taking,  343. 
whf-n  witness  in  foreign  country,  343. 
must  be  filed  with  Commission,  343. 
before  whom  taken,  343. 

DETENTION— 

not  of  itself  ground  for  complaint,  :]59. 

DIFFERENTIALS  (see  Kixns  ok  Trai  fic)  — 

in  rates  between  live  hogs  and  packing  house  products,  266. 
wheat  and  flour,  266. 

raw  materials  and  manufactured  product,  266. 
anthracite  and  bituminous  coal,  266. 
live  hogs  and  cattle  and  dressed  products  of  each,  2C6, 
grain  and  grain  products,  269.  ': 

competitive  cities,   243. 
may  be  preferential,  246. 

DISCRIMINATION   (see  Unjust  Discrimtnation). 

DISEASED  CATTLE,  EXCLUSION  OF  (see  Regulation  of  Commerce, 
Concurrent  Jurisdiction ) . 

DISPENSARY  LAWS  OF  SOUTH  CAROLINA  (see  Simritous  Liquobs). 

DISTRICT  ATTORNEY   (see  Safety  Appliance  Act,  sec.  6)  — 
power  of,  under  Elkins  Act,  326. 
duty  to  prosecute  under  section  12,  343. 
in  general,  381. 

DISTRICT  OF  COLUMBIA— 

power  of  Congress  to  grant  charters  in,  67. 

DIVERSE  CITIZENSHIP   (see  Jihisdk  iton  of  Fedi  ral  Courts). 

DIVISION  OF  TERRITORY— 
undue  preference  in,  264. 

DOCKS,   REGULATION  OF    (see   Regulation   of   Commerce,   Concur- 
rent Jurisdiction). 

"DOING  BUSINESS"— 

distinction  from  "carrying  on"  interstate  commerce,  16. 

DRAW  BARS  (see  Safety  Appliance  Act,  sec.  5). 

DRURTMERS— 

may  be  sent  through  various  States,  16. 

4*^ 


754  INDEX. 

[references  are  to  sections.] 


EARNINGS— 

relation  of  rates  to  investment  of,  170. 

ECONOMIC  CHANGES— 

influence  of,  on  construction  of  Federal  Constitution,  71. 

EIGHTH   SECTION— 

liability  of  carriers  for  damages,  319. 

construction  of,  320. 

plaintiif  must  show  injur j%  321. 

action  at  law,  320. 

cause  of  action  under  may  be  assigned,  324. 

limitation   of  actions,   323. 

jurisdiction  of  Federal  Courts,  324. 

EIGHTEENTH    SECTION— 

salaries  of  Commissioners,  Secretary,  etc.,  399. 

expenses  of  the  Commission,  399. 

employees  of  the  Commission,  399. 

oflices  and  supplies  of  the  Commission,  399. 

ELECTION   (see  Nixth  Section). 

ELECTRIC   RAILROADS— 

between  States,  subject  to  the  Act,  143. 
between  States,  rates  on,  143. 
switching  connections,  374. 

ELEVATORS— 

undue  preference  in  allowance  for  service,  247. 
construction  of,  on  right  of  way,  262. 

ELEVENTH   AMENDMENT— 

suit  against  State  Commission  not  suit  against  State  within  mean- 
ing of,  112. 

ELEVENTH  SECTION    (see   Interstate  Commerce  Commission)  — 
Interstate  Commerce  Commission,  341. 
number  of  Commissioners,  341. 
how  appointed,  341. 
term  of,  341. 
requirements  of,  341. 
removal,  341. 
organization  and  members,  341. 

ELKINS  ACT   (see  Rebating)  — 

discussed,  51,  195,  305,  309,  326,  335. 
general  provisions,  422. 


INDEX.  75;j 

rKi:Fi:i{i:x(i:s  ark  to  sectioxs.] 

ELKTXS  ACT— Continued. 
amendments,    423. 

repealing  clause  of  Hepburn  Act  did  not  bar  prior  offenses,  424. 
validity  and  enforclbility,  425. 
unit  of  offense  under,  427. 
Standard  Oil  case,  427. 
scope  of  personal  provisions,  430. 
requisite  of  indictment  under,  431. 
contents  of,  431. 

EMBARGO— 

Congress  may  place  on  foreign  commerce,  2. 

EMINENT   DOMAIN— 

power  of,  in  Congress,  5. 

power  of,  in  telegraph  companies  under  Act  of  1866,  5.5. 
does  not  give  telegraph  company  right  of  way  over  railroad  prop- 
erty, 55. 

EMPLOYEES   (see  Empioyers'  Li.vniLiTY  Act)  — 

interstate  commerce  in  relation  to  employees  therein,  58,  G2,  96. 
Federal   regulation  of  interstate  employers,  62. 
not  impaired  because  intrastate  service  incidentally  affected,  62. 
relation  of  carrier  and  employee  that  of  free  contract,  98. 
right  to  leave  employment,  subject  to  certain  limits,  93,  96. 
distinction  between  relation  of  gHasi-public  and   private  corpora- 
tions to  employees,  96. 
abandonment  of  train,  98. 
peaceable  strike  lawful,  337. 
State  laws  establishing  qualifications  of,  valid,  29. 

EMPLOYERS'   LIABILITY   ACT— 

general  provisions  Act  of  1906,  527. 

invalid  as  to  interstate  commerce,  528. 

valid  as  to  District  of  Columbia  and  territories,  529. 

Act  of  1908 

general  provisions,  530. 

amendments  to  of  1910,  531,  534. 

construction  of  Act  of  1908,  532. 
the  fellow  servant  rule,  532. 
contributory  negligence,  533. 
what  is  employment  in  interstate  commerce,  536. 

bridge  gang,  536. 

track  walker,  536. 
concurrent  jurisdiction  of  State  courts,  537. 
contracting  out  of  Act  prohibited,  538. 
superseding  State  statutes,  539. 
removal  of  cases  under  the  Act,  540. 


756  INDEX 

[references  are  to  sections. J 

ENGLISH  ACTS  IX  REGULATION  OF  COMMERCE— 
Railway  Clauses  Consolidated  Act,  45. 
Railway  and  Canal  Traffic  Act,  45,  228,  229. 
Regulation  of  Railways  Act,  1873,  44. 
Conspiracy  and  Protection  of  Property  Act,  1875,  95. 
difference  between  conditions  in  England  and  United  States,  44. 

ENUMERATED  POWERS— 
government  one  of,  5. 
power  to  charter  corporations  not  within,  67. 

EQUITY  PROCEEDINGS  (see  Injunction)  — 
jurisdiction  of  Federal  court  over,  326,  469. 
by  Act  of  February  19,  1903,  326. 

for  protection  of  interstate  commerce  against  combination  in  viola- 
tion of  the  Act,  327. 
pleading  in  (see  Pleading  and  Proof). 
jurisdiction  irrespective  of  citizenship,  327. 
to  protect  against  combinations  in  restraint  of  trade,  74. 
under  ninth  section,  330. 
under  Anti-Trust  Act,  467. 

ESCH-TOWNSEND  BILL  OF  1906,  51. 

ESTOPPEL— 

Interstate   Commerce   Commission   not   bound  by  ruling  of   State 
Commission,  270. 
EVIDENCE   (see  Ninth  Section,  Testimony,  Witness)  — 

reports  of  railway  accidents  as   (see  Accident  Law%  sec.  3). 

tax  return  of  railroad  officials  to  establish  reasonableness,  172. 

contracts  and  tariffs  filed  and  published  under  section  6,  306. 

of  contract  for  through  routing,  140. 

contracts  between  third  persons  not  party  to  proceedings,  352. 

advanced  rate  filed  with  Commission  going  in  effect  pending  hear- 
ing, 172. 

newspaper  reports,  etc.,  to  show  character  and  purpose  of  conspir- 
acy, 94. 
EX  PARTE  STATEMENTS   (see  Moot  Questions). 
EXPEDITION  ACT  FEB.  11,  1903   (see  Lnterstate  Commerce  Acts)  — 

terms,  490. 

judicial  application  of,  491. 

Amendment  of  1910,  492. 

construction  of  statute,  493. 

EXPERT  TESTIMONY  (see  Testimony,  Witness,  EvmENCE). 

EXPORTS   (see  Imports  and  Exports,  Preference  Clause)  — 

prohibition  of  tax  or  duty  on,  from  any  State  not  applicable  to  in- 
terstate traffic,  4. 


INDEX.  75i 

[refebexces  are  to  sections.] 

EXPRESS  COMPANIES— 
under  the  Act,  138. 

railroad  not  bound  to  grant  equal  facilities  to,  133. 
may  pool  earnings,  302. 

EXTENSION  OF  TIME  (see  Rules  of  Practice,  Rule  11,  page  662). 


FACILITIES  FOR  INTERCHANGE  OF  TRAFFiO— 
tap  lines,  212. 
plant  facilities,  212. 

danger  of  strike  as  excuse  for  refusal,  336. 
injunction  to  compel,  336. 
construction  of  term,  278. 
State  control  of,  281. 
does  not  compel  through  routing,  278. 
meaning  of  "track  and  terminal  facilities,"  278. 

FEDERAL    CAUSE    OF    ACTIONS    IN    STATE    COURTS    (see    State 
Courts ) . 

FEDERAL  CONTROL  OF   STATE   REGULATION— 
State  regulations  through  State  commissions,  lOG. 

expenses  of,  107. 
State  regulation  not  dependent  on  State  incorporations,  108. 

nor  congressional  incorporations,  108. 
cannot  regulate  any  part  of  interstate  commerce,  109. 
competitive  effect  of  intrastate  rates  on  interstate  commerce,  110. 
The  Fourteenth  Amendment,  111. 
Federal  review  of  State  regulation,  112. 
jurisdiction  of  U.  S.  Courts,  112. 
construction  by  State,  112. 

Federal  jurisdiction  must  be  invoked  on  substantial  grounds,  113. 
mere  delegation  of  jurisdiction  insufficient,  113. 
Federal  jurisdiction  cannot  be  limited  by  State  legislation,  114. 
due  process  of  law,  114.  ^ 

injunction  against  State  officials,  115. 
Federal  control,  over  orders  of  Commission,  116. 
procedure  in,  117. 

temporary  injunctions  against  legislation,  under  Act  of  1910,  118. 
Supreme  Court  on  State  regulation.  122. 
schedules  of  rates  and  special  rates,  123. 
reasonableness  of  rates,  107. 
valuation  of  property,  124,  IGS. 
apportionment  of  railroad  property,  125. 


758  IXDEX. 

[befekences  are  to  sections.] 

FEDERAL  CONTROL  OF  STATE  REGULATION— Confmiie^. 

eonfisciUion,  12G. 

cost  and  revenue,  126. 

rate  of  profit  necessary  to  avoid  confiscation,  127, 

protection  against  discriminating  State  legislation,  128. 

Ctate  Anti-Trust  Laws,  130. 

State  classification  in  railroad  legislation,  131. 
FEDERAL  COURTS,  JURISDICTION  OF— 

amount  in  controversy,  389. 

in  admiralty  cases,  15. 

exclusive  of  State  courts  under  the  Act,  47,  325. 

concurrent  jurisdiction  where  action  based  on  common  law  of  in- 
terstate commerce,  47,  325. 

distinction  between  cause  arising  or  not  arising  under  Act,  325. 

suit,  where  brought,  325. 

amount  in  controversy,  47. 

over  equity  proceedings  under  the  Act,  326. 

under  Elkins  Act,  335,  422. 

no  jurisdiction  of  intrastate  combinations  not  affecting  interstate 
commerce,  64. 

in  reparation  cases  under  sec.  16,  388. 

irrespective  of  citizenship,  117,  325. 

prior  to  adoption  of  Fourteenth  Amendment,  111. 

based    on   cause    arising   under    Constitution   and    laws    of   United 
States,  47,  47,  n,  325. 

when  such  a  suit  arises,  47,  48,  326. 

no  jurisdiction  on  removal  where  State  court  had  none,  46,  325. 

power  of,  cannot  be  limited  by  State  legislation,  44,  95. 

in  admiralty  and  maritime  cases,  15. 

under  Judiciary  Act  of  1879,  15. 

includes  maritime  cases  wholly  within  single  State,  15. 

of  Circuit  Court,  286,  392,  394. 

of  Circuit  Court  of  Appeals  in  contempt  cases,  101. 

suits  by  non-resident  stockholders  against  State  Commission  con- 
testing State  imposed  rates,  117. 

under  Anti-Trust  Act,  467,  468,  4G9. 

power  of  State  regulation  of  intrastate  traffic  subject  to  review  by, 
112. 

in  questions  involving  reasonableness  of  rates,  112,  113. 

cannot  be  limited  by  State  law,  114. 

in  general,  47. 

where  State  statute  denies  due  process  or  equal  protection  of  the 
law,  112. 

injunction  against  State  officials,  115. 

mandamus,  419. 


INDEX.  75!) 

[heferences  ake  to  sections.] 

FEDERAL  COURTS,  JURISDICTION  OF— Continued. 
not  bound  to  follow  State  Courts,  43. 
over  Commission's  orders,  391,  394. 

of  Circuit  Court  over  violations  of  Commission's  orders,  392. 
no  revisory  power  of  Commission's  findings,  290. 

FEDERAL  REGULATION   (see  RECiiLATiox  of  CoMMERn:)  — 
Federal  sovereignty,  5. 

^EES— 

of  attorney,  how  allowed  and  collected,  319. 
of  attorney  under  Anti-Trust  Act,  478,  479. 
of  witnesses,  343  (see  Rllks  of  Practice,  Rule  13,  page  662), 

FERRIES   (see  RrorLATioN  of  CoMMKr.n:)  — 

when  included  in  term    "railroad,"  section  1,  148. 

regulation  of,  on  navigable  streams,  54. 

in  interstate  commerce,  16. 

as  instrumentalities  of  interstate  commerce,  54. 

free  from  State  control,  54. 

FIFTEENTH  SECTION  (see  Interstate  Commerce  Commission)  — 
as  amended,  369. 

Amendments  of  1906  and  1910,  370. 
constitutionality  of  Amendment  of  1906,  371. 
enlarged  powers  of  Commission,  372. 

FIFTH  SECTION— 

pooling  of  freights  and  division  of  earnings  forbidden,  298. 

construction  of,  299. 

agreements  controlling  through  routing  and  allotting  territory,  300. 

agreement  not  within  the  prohibition,  301. 

agreements  for  division  of  through  freights  between  members  of 

trunk  line  not  unlawful,  301. 
agreement  for  consultation  for  promotion  of  reasonable  rates,  301. 
division  of  immigrant  traffic  in  proportion  to  domestic  traffic,  301. 
relation  to  Anti-Trust  Act  of  1S90,  302. 
"physical"  pooling,  299. 
"money"  pooling,  299. 

pooling  as  defense  to  action  by  carrier,  303. 
meaning  of  term  "freights,"  300. 

FILING  OF  SCHEDULES  (see  Scuedules). 

FINES— 

for  refus.'l  to  obey  injunction  or  other  process,  3S1. 

FIRE  INSURANCE— 

not  interstate  commerce,  9. 


760  INDEX. 

[keferexces  are  to  sections.] 

FIRST  SECTION  OF  ACT  OF  18S7,  132. 
as  amended  to  June,  1910,  133. 
amendments  to  section,  134. 
all  of  interstate  commerce  not  included,  135. 
parties  subject  to,  136. 
common  carriers  under  Act,  137. 
express  companies,  138. 
sleeping  car  companies,  139. 

common  control,  etc.,  for  continuous  carriage,  140. 
transportation  through  a  State,  141. 
territorial  transportation,  142. 
electric  railroads,  143. 

receivers,  lessees  and  purchasers  pendente  lite,  144, 
foreign  commerce,  145. 
place  of  incorporation  immaterial,  146. 
intention  of  shipment,  147. 
transportation,  meaning  of,  148. 
delivery,  cartage,  storage,  etc.,  149. 
terminal  facilities,  150. 
accessory  charges,  152. 

duty  of  carriers  as  to  carriage  of  live  stock  and  perishable  prop- 
erty, 153. 
refrigeration  in  transit,  154. 
prohibition  of  passes,  156,  219. 
commodities  clause,  157. 
switching  connections,  158. 
through  routes,  159. 

classifications,  regulations  and  practices,  160. 
charges,  reasonable,  161. 
standard  of  reasonableness,  164. 
power  to  fix  rates,  165,  166. 
reasonableness  of  rates  under,  171. 

FISHERIES— 

how  far  State  may  regulate,  11. 

FLOUR  (see  Differentials  in  Rates), 

FOOD  AND  DRUG  ACT,  58. 

FOOD  PRODUCTS— 

protection  against  adulterated,  10. 

State  may  protect  people  against  fraud  In  sale  of,  10. 

FORECLOSURE  SALE— 

purchasers  at  have  no  contract  right  against  State  legislation  sub- 
sequent to  mortgage,  129. 


INDEX.  TGI 

[befebences  are  to  sections.] 

FOREIGN  COMMERCE    (see  Commebce,  I.nteustatk  CoiiiiEBCE,  Regu- 
lation OF  Commerce)  — 
when  subject  to  the  Act,  144. 
Congress  may  place  embargo  on,  3. 
no  power  in  State  over,  3. 

congressional  inaction  in  foreign  and  interstate  commerce  distin- 
guished, 38. 

FOREIGN  CORPORATIONS  (see  Corporation's )  — 
State  may  exclude  or  impose  conditions  on,  16,  43. 
right  to  engage  in  business  in  local  State  depends  on  whether  cor- 
poration is  carrying  on  interstate  commerce,  IC,  43. 
may  depend  upon  its  own  charter,  10. 
meaning  of  term  "carrying  on  interstate  commerce,"  16. 
public  carriers  are  "carrying  on  interstate  commerce,"  16. 
bridge  companies  are  "carrying  on  interstate  commerce,"  10. 
ferry  companies  are  "carrying  on  interstate  commerce,"  16. 
telegraph  companies  are  "carrying  on  interstate  commerce,"  16. 
telephone  companies  are  "carrying  on  interstate  commerce,"  10. 
steamboat  companies  are  "carrying  on  interstate  commerce,"  16. 
railroad  companies  are  "carrying  on  interstate  commerce,"  16. 
manufacturer  who  ships  goods  to  purchaser  in  another  State  is,  16. 
manufacturing  or  trading  company  is,  16. 
may  send  drummers  through  other  States,  16. 
cannot  establish  office  within  local  State  without  latter's  consent,  10. 

FOREIGN  COUNTRIES— 
Porto  Rico  not,  3. 

FORMS  (see  Appendix). 

FOURTEENTH  AMENDMENT— 
adoption  of.  111. 

applies  to  corporation  as  well  as  inc'ividuals,  111. 
protects  carrier  from  unreasonable  State  interference,  128. 

FOURTEENTH  SECTION— 

report  of  investigation,  304. 
amendments  to,  305. 

FOURTH  SECTION  (see  Long  and  Short  Hall)  — 
history  of  and  amendments,  289. 
construction  of  prior  to  amendments,  290. 

similar  circumstances  and  conditions,  200. 
proviso  of,  288. 
burden  of  proof  under,  293. 
"over  the  same  line,"  meaning  of,  291. 


762  INDEX. 

[refekexces  are  to  sections.] 

FOURTH  SECTION— ConfiwMed. 

application  for  relief  under  proviso   (see  Rules  of  Practice,  Rule- 

19,  page  663),  292,  296. 
carrier  may  judge  in  first  instance  controlling  effect  of  competition, 

292. 
construction  of  by  commission,  294. 
application  to  different  classes  of  rates,  294. 
the  five  trade  zones,  297. 

FRANCHISE— 

State  tax  on  valid,  22. 

requirement  of  federal  franchise  for  business  corporation  in  inter- 
state commerce,  70. 

FRAUD— 

cause  of  action  at  common  law  for  unjust  discrimination  irrespec- 
tive of,  223. 

FREE  OR  REDUCED  RATE  TRANSPORTATION— 
persons  and  property  entitled  to,  412. 

FREIGHT— 

terms  means  commodity  carried,  not  compensation  paid,  299. 

FUNCTIONS  OF  GOVERNMENT— 

blending  of  legislative  executive  and  judicial  in  Interstate  Com- 
merce  Commission,  54. 

G 

GAS  (see  Natural  Oil  and  Gas). 

GAME  (see  Commerce)  — 

unlawfully  killed,  interstate  carriage  prohibited,  11,  58. 

GARNISHMENT— 

railroad   not  subject  to  because  in   possession  of  cars  of  foreign 

carrier,  39. 
railroad  is  subject  to  for  debts  of  shipper,  39. 

GIBBONS  V.  OGDEN— 
discussed,  6. 

GRAB  IRON  AND  HANDHOLDS  (see  Safety  Appliance  Act,  sec.  4). 

GRAIN  AND  GRAIN  PRODUCTS  (see  Differentials  in  Rates)  — 
inspection  of,  37,  n. 
differentials  between,  2C9. 


INDKX.  76Ji 

[beferences  are  to  sections.] 

GROUPING   OF  RATES— 
meaning  of,  239. 

not  unlawful  unless  undue  preference  results,  239. 
illustrative  cases  on  the  subject,  239. 

GUARDS  AND  GUARD  POSTS— 

State  law  valid  requiring  them  on  bridges  and  trestles,  29. 

H 

HARBORS,  POLICING  OF  (see  Regvl.vtion  of  Commerce). 

HEARINGS  (see  Rules  of  Practice,  rule  11,  page  659) — 
place  of,  401. 

practice  of  Commission,  401. 
assignments  for  at  request  of  either  party,  359. 

HEATING  OF  PASSENGER  TRAINS  (see  Act  of  1866)  — 
may  be  regulated  by  State  law,  29. 

HEPBURN   ACT   OF   1903    (see   Elkins   Act;    Interstate   Commebce 
Acts) — 
Attorney  General  Moody's  opinion,  51,  n. 
passage  of,  51. 
Esch-Townsend  Bill,  51,  n, 

HIGHWAYS— 

construction  of,  subject  to  State  control,  24. 
power  of  Congress  to  authorize  national,  67. 

"HOLDING  COMPANIES"  (see  Anti-Tkust  Act). 

HOURS  OF  SERVICE  ACT— 
mentioned,  58,  62. 
general  provisions,  541. 
constitutionality,  542. 
not  void  for  uncertainty,  543. 
authority  to  require  reports,  544. 

no    privilege    to   corporations   or   corporation   officer   against   self- 
incrimination,  545. 

I 

ICING— 

an  important  factor  in  refrigerator  car  service,  154. 

ILLEGAL  COMBINATIONS   (see  Tenth  Section,  Anti-Tiu'st  Act,  Re- 

str.\int  ov  Tk-vde). 
IMMUNITY  TO  TESTIFYING  WITNESSES    (see  Witnesses)— 

no  vicarious  immunity.  345. 

none  to  corporation  from  enforced  testimony  of  officers,  346. 


764  INDEX. 

[references  are  to  sections.] 

I^^IMUNITY  TO  TESTIFYING  WITNESSES— Confw«e3.' 
to  corporations  under  Elkins  Act,  345,  422. 
under  Hours  of  Service  Act,  544. 
in  criminal  prosecution,  462. 

IMPORTS  AND  EXPORTS   (see  Interstate  Commerce) — 

lower  rate  on  from  or  to  seaport  than  on  domestic  traffic,  not  un- 
due preference,  233. 

intermediate  points  entitled  to  proportionate  reduction,  235. 

Power  of  President  to  suspend  free  importation  of  certain  articles, 
57. 

publication  and  filing  of  rates  under  section  6,  234,  312. 

rulings  of  Commission  on,  295. 

application  of  4tli  Section,  295. 

IMPRISONMENT— 

abolished  by  Elkins  Act,  335. 

restored  by  Amendment  of  1906,  422,  423. 

INCORPORATION   (see  Corporations)  — 

power  of  Congress  to  charter  bridge  across  navigable  streams,  54, 

57. 
railroad  running  through  several  States  and  holding  charter  from 

each,  a  corporation  of  each,  106. 
place  of,  immaterial  as  to  regulating  power,  106,  146. 
power   of   Congress   to   charter   companies  engaged   in   interstate 

commerce,  67. 
federal  incorporation,  68. 
requirement  of  federal  franchises,  70. 

INDIAN  SUPPLIES— 

for  United  States  may  be  transported  at  less  than  published  rate, 
416. 

INDIAN  TRIBES  (see  Regulation  of  Commerce). 

INDICTMENT— 

defective  in  not  showing  discrimination,  338. 

essentials  of,  338. 

agent  of  railroad  who  merely  collects  freight  not  Indictable,  338. 

who  in  general,  338. 

essentials  of  under  Anti-Trust  Act,  455. 

INFORMATION  TO  PARTIES   (see  Rules  of  Practice,  rule  20,  page 
664). 

INITIAL  CARRIER— 

liability  for  damage  to  through  shipment,  403,  407, 


INDEX.  765 

[refebences  are  to  sections.] 

INJUNCTION'S    (see  Eqiity  Pkockkdincs)  — 

to  enjoin  Interference  with  intercliange  of  traflif,  92. 
for  protections  to  receivers,  92. 

against  labor  combinations  interfering  with  foiniDcrce,  92. 
in  interstate  commerce,  100. 
not  defeated  because  crime  involved,  100. 
scope  of,  in  trade  disputes,  100. 

distinction  where  persons  are  in  privity  or  independent  tort-feas- 
ors, 100. 
contempt,  101. 

mandatory  injunction  in  interstate  commerce,  lOo. 
cannot  enjoin  competition,  only  agreements  not  to  compete,  81. 
value  of  preliminary  injunction,  105. 

to  restore  passage  of  freight  backward  and  forward,  327. 
to  restrain  order  of  State  Railroad  Commission,  2G1. 
against  unjust  discrimination,  248. 
to  enforce  section  2,  223. 
under  section  16,  381. 
to  compel  interchange  of  facilities,  33G. 

not  issued  to  compel  performance  of  personal  services,  336. 
in  rate  wars,  265. 

defense  of  pooling  of  earnings,  303. 

government  only  can  enjoin  under  Anti-Trust  Act,  407. 
private  party  cannot  enjoin  under  Anti-Trust  Act,  468. 
State  cannot  enjoin  under  Anti-Trust  Act,  470. 
injunction  against  State  officials,  115. 
temporary  injunction  against  State  legislation,  118. 
under  Act  of  1910,  119. 

INSPECTION  LAWS    (see  RKriiLATiox  of  Commkrce)  — 

absolute  prohibition  of  certain  cattle  within  certain  seasons  un- 
lawful, 34. 

of  State,  valid,  but  must  be  reasonable,  10,  34. 

State  cannot  require  inspection  of  animals  before  slaughtering, 
when,  40,  n. 

Congress  has  no  power  of.  over  State  manufacturing  business,  35. 

effect  of  Congressional  legislation  upon,  35,  35,  n. 

inspection  of  grain,  37,  n, 

INSURANCE— 

not  interstate  commerce,  9. 

subject  to  State  legislation,  9. 

incorporation  by  Congress  in  District  of  Columbia,  67. 

INTENTION— 

does  not  make  shipment  interstate,   147. 


765  INDEX. 

[refekences  ake  to  sectio:xs.] 

INTERCHANGE   OF  TRAFFIC    (see  Facilities  foe   I^-TERC^A^^GE  of 
Teaffic,  Terminals)  — 
Interlocking  Act,  see  Appendix. 

INTERSTATE  COMMERCE  (see  Commerce,  Corporations,  Regulation 
OF  Commerce,  Original  Packages,  Taxation,  Acts,  Restraint  op 
Trade) — 
Federal  sovereignty  in,  5,  71. 
common  law  of,  46. 

free  from  State  control  by  police  or  taxing  power,  20,  37. 
under  Federal   Constitution,  7. 
Federal  regulation,  41,  71. 

in  relation  to  employes  therein,  37,  n,  62,  96,  98. 
shipment  not  made  interstate  by  intention,  147. 
State  cannot  make  routing  instructions,  37. 
limitations  upon  Federal  power  therein,  64. 
when  carried  on  by  water  subject  to  maritime  law,  46. 
no  statutory  regulation  of  prior  to  Interstate  Commerce  Act,  46. 
navigation  is,  7. 
correspondence  schools,  7. 
transportation  is,  7,  434. 
telegraph  messages,  7,  15,  16. 
telephone  messages,  7,  16. 

carrying  of  lottery  tickets  between  States,  7,  65. 
spiritous  liquors,  10,  18. 
white  clave  traffic,  7. 

business  of  "carrying  on,"  free  from  State  taxation,  20. 
right  to  sell  or  solicit  sales  free  from  State  taxation,  20. 

immaterial  that  taxation  is  without  discrimination,  20. 

immunity  from  unlawful  interference  not  limited  to  railroads,  but 
extends  to  all  engaged  in  interstate  commerce,  96. 

carriage  between  points   in   same   State  passing  through   another 
State,  7. 

Congress  alone  can  act  as  to  admission  of  goods  from  one  State  to 
another,  17. 

ferry  companies  between  States,  16. 

bridge  companies  between  States,  16. 
INTERSTATE  COMMERCE  ACT  (see  Various  Subjects  and  Various 
Sections)  — 

genesis  of  the  Act,  49. 

passage  of  the  Act  Feb.  4,  1S87,  50. 

debate  on,   50. 

purpose  and  scope  of  the  Act,  51. 

judicial  construction  of  the  Act,  51. 

power  of  Congress  with  reference  to,  58. 

amendments  of  the  Act,  51. 

Amendment  of  1889,  51. 


INDEX.  7G7 

[bEFEBENCES  ABE  TO  SECTIONS.] 

INTERSTATE  COMMERCE  ACT— Continued. 
amendment  of  lS'j:5,  51. 
amendment  of  1003,  51. 
amendment  of  1906,  51. 
amendment  of  1908,  51. 
amendment  of  1910,  51. 

INTERSTATE    COMMERCE    CJOMMISSION    (see    Ele:\enth    Sectiov, 

TWELBTII   SeOTIOX)  — 

enlarged  powers,  52,  370. 

reports  from  railroads,  52,  403. 

reports  to  Congress,  411. 

original  members,  342. 

present  members,  342. 

appointment,  term,  qualification,  vacancies,  etc.    (see  Sec.  11). 

a  general  reference,  277,  278,  421. 

Quasi-judicial  body,  52,  372. 

general  powers,  355,  372. 

jurisdiction  over  contracts  of  carriers,  37S. 

as  to  commutation  rates,  418. 

powers  of,  construed,  380. 

resort  to  before  seeking  redress  in  courts,  52. 

finding  of  facts  by  prima  facie  evidence,  365,  367. 

must  make  reports  of  investigation,  364, 

what  report  necessary,  365. 

powers  of  under  section  6,  305. 

powers  of  under  section  12,  355. 

power  as  to  car  service,  356,  372. 

no  power  in  granting  special  privileges,  355. 

no  power  to  compel  extra  allowance  for  baggage,  355. 

power  to  fix  through  route,  372. 

limitations  of,  373. 
orders  of,  when  effective  and  limitation  of,  375. 
orders  of  when  reviewable,  395,  396. 
orders  of  finality,  396. 
no  power  to  allow  attorney's  fees,  355. 
no  power  of  entering  judgr.nents,  355. 
no  power  of  imposing  penalties,  355. 

no  power  to  make  order  over  one  not  party  to  proceeding,  355. 
power  to  institute  investigation,  355. 
to  summon  witnesses,  52,  355. 

to  determine  relation  of  rates  as  between  localities  and  commodi- 
ties, 276,  355. 
to  find  existing  rates  unreasonable  or  unfair,  52,  355. 
over  foreign  commerce  extends  to  what,  145. 
over  foreign  corporation  limited  to  this  country,  145. 
cannot  compel  through  routing,  140,  278. 


768  INDEX. 

[references  are  to  sections.] 

INTERSTATE  COMMERCE  COMMISSION— Confinwed. 
no  power  to  enforce  finding,  366. 

discretion  of  under  section  7,  Safety  Appliance  Act,  57. 
only  violation  of  the  Act  considered,  359. 
rulings  of  the  Commission  as  precedents,  52,  363. 
may  declare  rate  unreasonable,  52. 
rulings  on  car  service,  251. 

rulings  on  import  and  export  rates  under  4th  section,  295. 
rulings  of  on  application  for  relief,  296. 

may  determine  whether  rate  is  reasonable  or  unreasonable,  52,  173. 
power  to  fix  rates,  maximum,  minimum  or  absolute,  52,  165. 
rulings  on  interdependence  of  rates,  184. 
rulings  on  reasonableness  of  rates,  173. 
limitation  of  its  power  to  fix  rates,  174. 
power  to  establish  through  rates,  52. 
no  power  to  raise  rate  in  rate  wars,  191. 

power  to  compel  carrier  to  deliver  cars  to  another  carrier,  372. 
power  to  grant  relief  under  section  4,  57   (see  Sec.  4). 
duty  of  chairman  under  Act  of  June  1,  1888,  89. 
jurisdiction   over    carriers,    and   those    interested    in    controversy, 

136. 
jurisdiction  in  awarding  reparation,  386. 
jurisdiction  in  awarding  general  damages,  387. 
powers  and  duties  of  Commission  under  Act  of  1888,  55. 
not  bound  by  ruling  of  State  Commission,  270. 
power  to  correct  classification,  276. 
resort  to  determine  effect  of  competition  on  rate,  292. 

prima  facie  effect  of  findings,  52,  367. 

prima  facie  effect  of  orders,  389. 

address  of,  Washington,  D.  C,  401. 

procedure  before,  368. 

form  of  procedure,  398. 

report  of  decisions,  367. 

official  seal  of,  367. 

oaths  by  members,  367. 

quorum,  what  constitutes,  398. 

appearance  of  parties  before,  398. 

proper  party  to  complaint,  398. 

subpoenas  may  be  signed  by  members,  398. 

sessions  of,  401. 

salaries  of  commissioners,  52,  399,  421. 

secretary  of,  399,  421. 

expenses  of,  399,  400. 

employes,  399. 

offices  and  supplies,  399. 
INTERVENING  PETITIONS— 

when  allowed,  367,  383  (see  page  655). 


INDEX.  769 

[references  are  to  sections.] 

INTRASTATE  RATES   (see  Rates)  — 

State  power  in  regulating  limited  by  federal  authority,  120. 
standard  of  reasonableness  consid?red  by  court  not  same  as  that 

considered  between  carrier  and  patron,  120. 
what  Is  reasonableness,  121. 
what  considered   in  determining,  121. 
no  definite  standard  of,  121. 

INVESTIGATION— 

of  complaints  by  Commission,  3."6. 

preliminary  investigation  by  Commission  not  necessary,  390. 

J 

"JIM  CROW"  CARS— 

not  prohibited  by  second  section,  218. 

how  far  State  may  regulate,  30. 
JOINT  RATES   (see  Through  Ratks). 

JUDGMENTS,  ENTERING  OF  (see  iMiiRSTATE  Commerce  Commission, 

Powers  oi). 
JUDICIAL  PRECEDENT— 

doctrine  of,  has  limited  application,  52,  243,  363. 

judgment  before  Commission  bar  to  action  in  the  court,  332. 
JUDICIARY  ACT  OF  1789— 

jurisdiction  of  federal  courts  under,  16. 
JURY  TRIALr— 

right  to  discussed,  383. 

may  be  waived  in  writing,  2S4. 


KANSAS  CITY  LIVE  STOCK  EXCHANGE  CASES,  167,  441. 

KINDS  OF  TRAFFIC   (see  Differentials  in  Rates)  — 
discrimination  in,  2GG. 
may  also  be  against  locality,  2(10. 

second  section  does  not  deal  with  discrimination  between,  194. 
preference  against  must  involve  injury,  267. 
classification,  271. 

KNIGHT  COMPANY  CASE,  7G,  S4. 

L 

LABELLING   OF  GOODS— 

State  cannot  require  it,  when,  40,  n. 

LABOR  COMBINATIONS  IN  INTERSTATE  COMMERCE  (see  Con- 
spiracies, Strikes  and  Boycotts,  Anti-Trust  Act,  Emi-luyeb's 
Liability  Act)  — 

49 


770  INDEX. 

[references  are  to  sections.] 

LABOR  CO:\IBINATION,  ETC.— Continued. 
legislation  by  Congress,  88. 
Bureau  of  Labor,  88. 
Department  of  Commerce  and  Labor,  SS. 
regulation  of  interstate  commerce  in  relation  to  labor,  89. 
organization  of  labor,  89. 
railroads  discharging  members,  89. 
arbitration,  89. 

tlie   courts  on   labor  combinations   in   relation  to   interstate  com- 
merce, 90. 
constitutionality  of  incorporation  of  unions,  90. 
interstate  commerce  and  labor,  91. 

employes,  96. 

striking,  96. 

immunity  of  interstate  commerce  from  unlawful  strikes,  96. 
the  relation  of  employes  to  interstate  carriers,  98. 

leaving  employment,  93. 

right  of  representation,  99, 

injunctions,  100. 

mandatory  injunctions,  103, 

to  preserve  status  quo,  103. 

under  Sec.  10  of  Act,  336. 

LABOR    LEGISLATION    OF    CONGRESS    (see    Depaetment   of    Com- 
merce  AND   LADOR). 

LABOR  ORGANIZATION— 

right  of  includes  rights  of  representation,  99. 

LEGAL  TENDER  NOTES— 
power  to  issue,  5, 

LESSEES— 

when  subject  to  the  Act,  144. 

LICENSE  FEE— 

city  may  exact  of  interstate  telegraph  companies,  22. 
State  cannot  exact  for  use  of  navigable  waters,  25. 

LIFE  INSURANCE— 

not  interstate  commerce,  9. 

LIKE  KIND   OP   TRAFFIC— 
meaning  of  in  section  2,  221. 

LIME— 

State  cannot  require  inspection  of  when  imported  into  State,  40,  n. 

LIMITATION— 

of  orders  of  Commission,  375. 


iNDi:x,  771 

[references  a  hi;  to  sections.] 

LIMITATION'  OF  ACTION— 

no  i)rovision  in  Interstate  Coiniuoroc  Act,  323. 

State  statute  controls,  323,  I'.SL 

question  raised  by  demurrer,  323. 

wlien  statute  begins  to  run,  323, 

when  suit  is  begun,  384. 

private  actions  under  Anti-Trust  Act,  438. 

in  cases  of  criminal  prosecution,  340. 

LIMITATION  OF  LIABILITY— 
to  stipulated  valuation,  32. 
to  carrier's  own  line,  32. 
complete  exemption,  32. 
complete  exemption  where  pass  used,  219. 

State  statute  placing  duty  on  carrier  of  tracing  loss  void,  37. 
State  statute  placing  duty  on  carrier  of  showing  loss  not  on  his 
line  valid,  37. 

LIQUOR  TRAFFIC   (see  Co-Mmi:i!ce,  Wii.son  Act)  — 
state  control,  19. 
inspection  fee,  19. 

LIS  PENDENS— 

purchasers  bound  by  order  of  Commission,  144. 

LIVE  HOGS  (see  Differkntiai.s  ix  Rates), 

LIVE  ST0C7K  (see  Regulation  of  Co.mmerce,  Concurrent  Jurisdiction, 

28  Hour  Law)  — 
inspection  laws,  34,  35. 

transportation  from  State  to  State  not  included  in  Act  of  1884,  58. 
increased  hazard  in  carriage  warrants  higher  rate,  1S6. 
require  additional  facilities  for  delivery,  153. 
railroad  may  contract  with  stock  yards  company  for  delivery  of, 

153. 
when  commercial  transit  of  ends,  17,  81. 
power  of  Secretary  of  Agriculture  over,  58. 
State  cannot  require  inspection  of  and  fee,  40,  n. 

LOCAL   BUSINESS  OF   INTERSTATE  COMPANIES    (see   Railboads. 
Police  Power)  — 
license  to  do  business,  22. 
State  power  of  taxation.  22. 
State  control  upon  entering,  43. 
preventing  removal  of  causes,  43. 
local  incorporation,  43. 

LOCAL  AND  THROUGH  RATES— 

charging  of  local  rate  not  unjust  discrimination  when  no  through 
rate,  283. 


772  INDEX. 

[references  are  to  sections.] 

LOCAL  AND  THROUGH  RATES— Com  i  in  wed. 

charge  of  local  rate  greater  than  proportionate  part  of  through  rate 

not  unlawful,  ISO. 
division  of  through  rates  usually  less  than  corresponding  local,  128. 
distinction  between,  180. 
the  Commission  on,  173,  191. 
mileage  basis  not  required,  180. 
responsibility  for  through  rates,  180. 
manner  of  making  through  rate  only  important  as  to  its  legality, 

180. 
local  rate,  including  terminal  expenses,  is  prima  facie  excessive  as 

part  of  through  rate,  180. 
local  rate  need  not  correspond  with  division  of  joint  through  rate, 

180. 

LOCAL  AND  THROUGH  TRAFFIC— 

circumstances  and  conditions  of  are  dissimilar,  199. 

through  traffic  different  "kind  of  service"  from  local  traffic,  199. 

LOCALITY— 

second  section  does  not  deal  with  preferences  in  favor  of  or  against, 
194. 

rates  will  not  be  changed  to  equalize  commercial  conditions,  175. 

adjustment  of  rates  between,  240. 

preference  of  excused  by  competition,  230,  231. 

competing  cities  on  opposite  banks  of  rivers,  242. 

recognition  of  natural  advantage   of  situation   not  undue   prefer- 
ence, 241. 
LOCAL  INDUSTRIES— 

Congress  no  power  over,  84. 
LONG  AND  SHORT  HAUL   (see  Fourth  Section)  — 

application  where  short  haul  wholly  within  one  State,  100,  290,  291. 

carrier  may  judge  in  first  instance  whether  circumstances  and  con- 
ditions dissimilar,  230. 

application  to  Commission  to  determine  effect  to  competition  on 
rate,  292. 
LOTTERY  TICKETS— 

as  subjects  of  comm.erce,  9. 

carriage  between  States  may  be  prohibited  by  Congress,  7,  58. 

carriage  between  States  may  be  punished  by  Congress,  58. 

in  general,  CO,  65. 

M 

MADISON,  JAMES— 

on  federal  regulation  of  interstate  commerce,  1. 

MALICE— 

as  an  ingredient  of  civil  action,  96. 


INDEX.  773 

[heferences  aue  to  sections.] 
MANDAMUS— 

to  (01111)01  transfer  and  return  of  cars,  33. 

to  ooiiipol  equal  distribution  of  cars,  250,  419    420. 

remedy  cumulative,  419,  420. 

by  interstate  Commerce  Commission,  52. 

to  compel  carrier  to  obey  tbe  law,  48,  419. 

to  compel  express  companies  to  receive  shipment  of  liquor,  18. 

to  compel  compliance  with  sec.  20  requiring  reports,  403,  406. 

MANDATORY    INJUNCTIOXS    (see    In.iu.nctions,    Mann-Elkins   Act, 

I.NTEUSTATi:     CuM.MKKCE    AcTS,     AMKiNUMENTS    OF). 

MANUFACTURE— 

distinguished  from  commerce,  433. 

MANUFACTURER— 

when  engaged  in  interstate  commerce,  16. 

MANUFACTURING,  BUSINESS  OF— 
not  interstate  commerce,  8. 

MANUFACTURING    CORPORATIONS    (see   Foreign   CoBroRATiONS). 

MARINE  INSURANCE— 

not  interstate  commerce,  9. 

MARITIME  JURISDICTION   (see  Admtbalty  and  Maritime  Jurisdic- 
tion). 

MEASURE  OF  DAMAGES  (see  Damages). 

MEASURE  OF  PROOF  (see  Proof). 

MEAT  INSPECTION  ACT,  58. 
MILEAGE  BASIS— 

rule  as  to  State  taxation,  21. 

Commission  no  power  to  make,  187. 

no  requirement  for  in  Act,  ISO, 
MILEAGE  TICKETS  (see  Tickets). 
MILLING   INDUSTRY— 

discrimination  against,  266. 

MILLING  IN  TRANSIT  (see  Stoppage  in  Transit)  — 

privilege  of,  2.14. 

rights  of  connecting  carrier,  286. 
MISDEMEANOR— 

failure  to  publish  rate,  422. 

as  to  rebates,  422,  429. 

person  engaged  in  monopoly  guilty  of,  434. 

party  to  contract   or    combination,  of    conspiracy   In    restraint  of 
trade,  guilty  of,  455. 


i  ,  -i  INDEX. 

[BEFERKXCES  ABE  TO  SECTIONS.] 

MISDEMEANOR— Confiw«ed. 

under  Anti-Trust  Act,  432,  454,  455,  464. 
conspiracy  a  misdemeanor  not  felony,  94. 

MISROUTING— 
claims  for,  309. 

MODE  OF  SHIPMENT— 

discrimination  in,  271. 

MONEl'— 

power  of  coinage,  5. 

MONOPOLY  (see  Anti-Tkust  Act;  Restraint  of  Trade;  Conspiracy)  — 
meaning  of  term,  83. 
means  attempting  to  control  market,  83. 
in  law  and  in  fact  distinguished,  74. 
persons  engaged  in  guilty  of  misdemeanor,  454. 

MOOT   QUESTIONS— 

not  decided,  359,  360,  375. 

MUNICIPAL   SUBSCRIPTIONS— 

for  building  road,  no  effect  on  competing  locality,  241. 

N 

NARROW  GAUGE  RAILROADS   (see  Railroads). 

NATIONAL  BANK— 

power  to  charter,  5,  69. 

NATIONAL  HIGHW^AYS  (see  Regulation  of  Commerce) — 
power  of  Congress  to  authorize,   67. 

NATIONAL  INCORPORATIONS  (see  Corporations)  — 

relation  of  State  to  federal  corporations,  69. 

State  cannot  interfere  with  Federal  corporation,  69. 

franchise  not  subject  to  State  taxation,  69. 

requirements  for  federal  franchise  for  business  corporation  in  in- 
terstate commerce,  70. 

as  a  means  of  regulating  commerce,  68. 

power  of  Congress  to  charter  corporations,  67. 

removal  of  case  from  State  to  Federal  court  under  Act  of  1875,  67. 

power  of  Congress  to  incorporate  interstate  railroad  companies,  67. 

power  to  charter  corporation  for  construction  of  interstate  bridge, 
67. 
NATIONAL  QUARANTINE  ACT   (see  Appendix). 

NATIONAL  TRADE  UNION  INCORPORATION  ACT   (see  Appendix). 
NATURAL  ADVANTAGES    (see   Localities). 


INDEX.  775 

[BEFERENCES  are  to  Sr.CTIONS.] 

NATURAL  OIL  AND  GAS   (see  Oil)  — 
as  subject  of  commerce,  12. 
not  subject  to  State  legislation,  12. 
distinction  between  and  animals  "ferae  naturae,^  12. 
State  statute  prohibiting  piping  out  of  State  void,  12. 
State  statute  prohibiting  escape  of  into  air  valid,  12. 

NAVIGABLE  WATERS  (see  Admiralty  and  ilAiiiTiiiE  Jurisdiction)  — 
what  are,  13. 

navigable  in  law  if  so  in  fact,  13. 
immaterial  that  rapids  and  falls  interrupt  the  flow,  1$, 

NAVIGATION— 

is  interstate   commerce,   7. 

"NECESSARY   AND   PROPER"— 
construction  of  term,  5. 

NECESSITIES  OF  LIFE   (see  Anti-Tbust  Act). 

NEGLIGENCE— 

State  abolition  of  fellow  servant's  rule  applicable  to  interstate  em- 
ployes, 37,  n. 

NINETEENTH   SECTION— 

principal  office  of  the  Commission,  etc.,  401. 
place  of  hearing,  402. 

NINTH  SECTION— 

right  of  election  in  appealing  to  Commission  or  court,  328. 

limitation  of  right  of  private  action,  329. 

testimony  clause  of  unconstitutional,  332. 

suit  may  be  brought  either  before  Commission  or  in  United  States 

courts,  330. 
equity  jurisdiction  under,  330. 
judicial  application  of  332. 

NOLO  CONTENDERE   (see  Pleading). 

NOTICE  IN  NATURE  OF  DEIMURRER  (see  Rules  or  Pbacitce,  rule  5, 
p.  657). 

0 

OBSCENE  LITERATURE— 

interstate  carriage  of  prohibited,  58. 

OCEAN  TRANSPORTATION— 

creates  dissimilar  circumstances  and  conditions,  233. 

OFFICER— 

act  of  the  act  of  carrier,  422. 

OHIO  COAL  CASE,  437. 


776  INDEX. 

[references  are  to  sections.] 

OIL   (see  Natural  Oil,  Commerct^)  — 

discrimination  in  mode  of  shipment,  271. 

higher  rate  for  barrel  than  tanli  car  shipments  unlawful,  271. 

higher  rates  for  less  than  car  load  than  for  car  load  of  barrels  not 

unlawful,  271. 
allowance  for  leakage  in  tanks  and  not  in  barrels  unlawful,  271. 

OLEOMARGARINE— 

subject  of  commerce,  10. 

subject  to  taxation,  10. 

State  may  prohibit  manufacture  and  sale  of,  10. 

cannot  prohibit  its  introduction  into  State  in  original  package,  10. 

police  power  of  State  extended  to,  58, 

OPINION  EVIDENCE  (see  Evioence,  Witnesses,  Testimony). 

ORIGINAL  PACKAGE    (see  Wilson's   Original  Package  Bill)  — 
meaning  of  term,  17,  18. 

time  when  taxing  power  of  State  begins,  17. 
in  relation  to  State  taxing  power,  17. 
in  relation  to  State  police  power,  17,  18. 
meaning  of  the  term  "arrival,"  57. 
when  transit  ends,  17,  18. 

OVERCHARGE— 

retention  of  a  violation  of  the  law,  222. 

"OVER  THE  SAME  LINE"— 

meaning  of  term  in  section  4,  291. 

OW^TERSHIP- 

discrimination  based  on  ownership  of  cargo,  206. 

OYSTERS— 

how  far  State  may  regulate  business,  11.  * 

P 

PARALLEL  LINES— 

one  railroad  owning  both  should  provide  equal  advantages,  188. 

PARLOR  CAR  RATES— 

discrimination  in  between  local  and  through  passengers,  218. 

PARTIES  TO  CASES  (see  Rules  of  Practice,  rule  2,  page  657). 

any  person  or  association  may  complain  either  for  himself  or  com- 
munity,  358. 

parties  entitled  to  apply  to  commerce  court  for  review  of  Commis- 
sion orders,  395. 

proper  and  necessary  defendants,  395. 

under  Elkins  Act,  422. 

under  Anti-Trust  Act,  474. 


INDEX.  777 

[references  are  to  sections.] 

PARTIES  TO  CASES— Continued. 

Interstate  Commerce  Commission  as  party,  395. 

all  carriers  on  the  route  not  necessary,  367. 

in  suit  against  unincorporated  association,  467. 

in  suit  by  unincorporated  association,  3.j8. 

owner  of  portion  of  througli  line  not  necessary,  358. 

Commission  may  bring  in  all  parties  interested,  358. 

PARTY  RATES— 

government  not  entitled  to,  414. 
Party  Rate  case  discussed,  201. 

PASSES— 

prohibition  of,  156. 

rulings  on,  156. 

issuing  of  unlawful  unless  excused  by  section  22,  219. 

no  recovery  for  injury,  if  risk  assumed,  219. 

to  officers  and  employes  do  not  include  their  families,  414. 

PASSENGERS- 

unjust  discrimination  in  service  to,  218. 

State  imposed  duty  on  master  of  vessel  to  report  arrival  of  valid, 

22. 
State  tax  on  immigrant  void,  22. 

PAUPERS— 

State  cannot  compel  gratuitous  removal  of  by  railroad,  40,  n. 
State  legislation  may  exclude,   10. 

PATENTS— 

power  to  grant,  5. 

sale  subject  to  State  police  prwer,  33. 

monopoly  in,  not  subject  to  Anti-Trust  Act,  452. 

PAYMENTS   (see  Prepayment)- 

by  shipper  ignorant  of  discrimination  not  voluntary  and  may  be 
recovered  back,  162,  223. 

PEACE  OF  THE  UNITED  STATES— 
meaning  of,  5. 
enforcement  of  by  executive,  5. 

PENALTIES   (see  Interstate  Commerce  Commission,  Powers  of)  — 
for  failure  to  adjust  losses,  33. 
for  failure  to  furnish  cars,  33. 
for  refusal  to  testify,  343. 
corporations  subject  to,  "46. 
for  violation  of  the  Act,  333. 
for  failure  to  rt  port  accidents,  522. 

in  section  10  apply  to  employees  refusing  to  haul  freight  of  other 
roads,  91. 


7  78  INDEX. 

[refeeences  are  to  sections.] 

PENALTIES — Continued. 

for  failure  to  publish  rates  or  observe  published  rate,  422. 

as  to  rebates,  422. 

for  violation  of  Safety  Appliance  Act,  515. 

under  Anti-Trust  Act,  432,  454,  455. 

PERISHABLE  PROPERTY— 

duty  of  carrier  under  Act,  153. 

PERJURY— 

prosecution  for,  343. 

PERSONAL    SERVICES— 

equity  cannot  enjoin  performance  of,  336. 

"PERSON"  OR  "PERSONS"— 

meaning  of  in  Anti-Trust  Act,  489. 

corporation  a  person  within  meaning  of  fourteenth  amendment,- 16^ 

111,  217. 
corporation  a  person  when  necessary  to  effect  legislative  intent  in 

statutes,  346. 

PETITION  (see  Pleadngs). 

PICKETING  AND  SOLICITING — 
in  interstate  commerce,  97. 

PIERS,  REGULATION  OF   (see  Regulation  of  Commebce). 

PILOTS  (see  Regulation  of  Co-mjiebce). 

PHOTOGRAPHS— 

State  tax  on  when  void,  40,  n. 

PLANT  FACILITIES— 
discrimination  in,  212. 

PLEADINGS  (see  Procedure)  — 

necessary  averments  for  a  cause  of  action  in  relation  to  schedules,. 

164. 
no  replication,  358. 
in  equity  cases,  381.  390. 

complaint  concerning  classification  against  whom  made,  358. 
necessary  averments  in  action  for  damages  under  section  2,  223 
petition  to  state  what  under  section  7,  Anti-Trust  Act,  482. 
Danbury  Hat  Case,  483. 

plea  of  nolo  contendere  under  Anti-Trust  Act,  463. 
petition  to  recover  penalty  must  show  what,  321. 

POLICE  POWER  (see  State  Legislation,  Regulation  of  Comaterce")  — 
State  not  deprived  of  by' regulating  power  of  Congress,  10,  33,  42.. 
distinguished  from  regulation  of  commerce,  37. 
in  relation  to  sale  of  United  States  patents,  33. 


INDEX.  779 

[rffkkkxcks  akk  to  srn  ions.] 

POLICE  POWKR—Conti7iue(l. 

Federal  Governnieiit  as  such  has  none,  5. 

In  relation  to  inspection  of  live  stock  (see  IxsrEmov  Lawb). 

extends  to  reasonable  inspection  of  articles  brought  from  another 

State,  10,  18. 
State  may  exact  inspection  and  license  fee,  18. 

POOLING   (see  Fiitii  Section)  — 

recommendations  of  Presidents  Taft  and  Roosevelt,  51,  n. 
forbidden,  75. 

cannot  be  lawfully  employed  as  preventive  of  rebates,  360. 
reservation  to  initial  carrier  of  power  to  route  shipment  beyond 

its  own  line  unlawful,  264,  300. 
meaning  of  term  "pool,"  299. 
express  companies  may  pool  earnings,  302. 
as  defense  to  action  of  carrier,  30".. 
agreements  not  within  the  prohibition,  301. 
meaning  of  term  "freights,"  300. 
"physical"  pooling,  299. 
"money"  pooling,  299. 

POST  OFFICES  AND  POST  ROADS— 
power  to  establish,  1,  5,  n. 

POWERS  OF  GOVERNMENT  (see  Functions  of  Goveenment). 

PRACTICE  BEFORE  THE  COMMISSION,  RULES   (see  Appendix)  — 

before  commerce  court   (see  Appendix). 
PRE-COOLING  (see  Refkigebation). 
PRETFERENCE  AND  ADVANTAGE  (see  Unjust  Discrimination)  — 

form  of  immaterial,  246. 

preference  of  locality  excused  by  competition,  230,  231. 

competition  rule,  231. 
qualifications  of,  240. 

between  domestic  and  foreign  traffic  in  import  and  export  rates 
not  undue,  233. 

where  preference  rate  exceeds  competitive  rate,  232. 

advantages  of  location,  etc.,  241. 

competing  cities  on  opposite  banks  of  rivers,  242. 

cannot  be  alleged  by  town  which  railroad  does  not  reach,  241. 

shown  by  "demurrage,"  244,  254. 

failure  to  publish  rate  through  to  particular  town  is,  246. 

failure  to  allow  equal  "accessorial  service"  is,  246. 

allowances  to  shipper  for  services,  379. 

in  differential  between  carload  and  less  than  carload,  246. 

not   unjust   preference    where    circumstances   and   conditions   dis- 
similar, 246. 

against  traffic  must  involve  injury,  267. 


780  IXDEX. 

[rkferences  are  to  secttoxs.] 

PREFERENCE  AND  ADVANTAGE— Cow/inucd. 

delay  in  furnishing  cars,  250   (see  Car  Service). 
guarantee  to  party  rate  purchaser,  arrival  at  certain  time  not  pref- 
erential, 246. 
in  denying  shipper  choice  of  route,  263. 
in  arbitrary  division  of  territory,  264. 
in  classification,   272,   275. 
in  elevator  service,   247. 
in  wharfage  rights,  248. 

in  management  of  stations  and  warehouses,  249. 
in  private  cars,  253. 
in  side  tracks  and  connections,  262. 

rate  wars,  265. 
reasonable  regulation  of  car  load  weights  not  preferential,  268. 
in  mode  of  shipment,  271. 

PREFERENCE  CLAUSE,  IN  CONSTITUTION— 
discussed,  3,  GO. 

no  application  to  interstate  commerce,  3. 
transportation  from  United  States  to  Porto  Rico  not  included,  3. 

PREPAYIMENT  (see  Payment)- 

requirement  of  one  connecting  carrier  and  not  of  another  not  un- 
just discrimination,  279. 
requirement  of  from  shipper,  279. 

PRESIDENT  OF  THE  UNITED   STATES— 

power  to  suspend  free  importation,  57. 

PRESUIMPTIONS  (see  Burden  of  Proof,  Rates)  — 

rates  established  by  law  are  presumed  to  be  reasonable,  185. 

long  continuance  of  rate  presumption   of  reasonableness,  175,  176, 

PRIMA   FACIE  CASE— 

reports  of  proceedings  before  Commission  as,  52,  367,  389. 
rulings  of  Commission  on  unreasonableness  as,  173. 

PRINTING  OP  PLEADINGS  (see  Rules  of  Practice,  rule  16,  page  663). 

PRIVATE  CARS   (see  Car  Service)  — 
under  Act,  155. 

PRIVITY  OF  CONTRACT— 

none  between  car  owner  and  shipper  where  carrier  pays  mileage, 
257. 

PORTO  RICO— 

not  a  foreign  country,  3. 

PROCEDURE  (see  Pi.eadixcs  and  Proof,  Sections  16a  and  17) — 
in  federal  review  of  state  legislation,  117. 
before  Commission  simple,  356,  35S,  367. 


INDEX. 


781 


[references  are  to  sections.] 


PROCEDURE— CojitinHcd. 

dilatory  proceedings  not  favored,  356,  338. 

who  may  complain,  336. 

where  suit  to  be  filed,  3S1,  390. 

appearance,  398. 

leave  of  court  unnecessary  in  suits  against  receivers.  35S. 

failure  of  proof,  effect  of,  338. 

hearings,   359,   401. 

rehearing  review,  etc.,  397. 

failure  of  carrier  to  answer.  Commission  will  proceed,  359. 

no  replication  required,  359. 

hearings  orally  or  on  brief,  359. 

complaints,  how  and  by  whom  made,  359. 

how  served  upon  carriers,  356. 

immaterial  that  trade  organization  is  unincorporated,  358. 

in  federal  review  of  State  regulation  of  carriers,  117. 

suit  by  United  States  under  Anti-Trust  Act,  471    (see  A>-ti-Trust 

Act). 
restraining  order  may  issue  without  notice,  466. 
proceedings  by  Commission  to  enjoin  violations,  422, 
effect  on  other  action,  422. 

PRODUCTS  OF  OTHER  STATES— 

State  cannot  discriminate  against,  40,  n. 

PROOF   (see  Evidence,  BuRnEX  of  Proof)  — 
plaintiff  must  shov/  injury,  321. 
reasonable  time  allowed  for  making,  359. 
measure  of,  under  Anti-Trust  Act,  480. 
newspaper  reports,  etc.,  to  show  conspiracy,  94. 
plaintiff  must  show  rate  unreasonable,  164. 
in  case  of  unpublished  rate,  321. 
failure  of  proof.  Commission  may  take  charge,  358. 
for  recovery  of  penalty,  321. 
relief  not  given  without.  361. 
in  case  asking  reparation  proof  necessary,  3G7. 

PROPORTION— 

as  affecting  reasonableness  of  rates.  190. 

"PROPORTIONAL  TARIFFS"— 
meaning  of  term,  261. 
State  Commission  no  control  over,  when,  261. 

PUBLICATION  UNDER  SECTION  6  (see  Schedi-les.  Sixm  Sl'^rTTo:^)- 
joint  rates  must  be  duly  authorized  before  published,  129,  31d. 
effect  of  iniMication,  164.  306. 
what  is  sufficient.  :-!l2. 


782  INDEX. 

[kkferkxces  are  to  sections.] 

PUBLICATION  UNDER  SECTION  Q— Continued. 

contracts  and  tariffs  filed  may  be  considered  before  Commission 

without  introduction,  306. 
published  rate  conclusively  deemed  legal,  307,  422. 
enforcibility  of  unpublished  rate,  307. 
good  defense  to  action  for  damages,  163. 
of  joint  traffic  and  through  rates,  313. 
of  State  rates  in  connection  with  interstate,  313. 
excursion  rates  must  be,  313. 

schedules  need  not  be  duplicated  by  each  company,  312. 
posting  notice  that  all  rates  are  on  file  in  office  not  sufficient,  312. 
schedules,  what  included  in,  311. 

terminal  charges  must  be,  311. 

storage  charges  must  be,  311. 
rules  and  rates  of  carriage  of  private  cars,  311. 
application  to  import  and  export  rates,  145,  316. 
of  charges  for  refrigerator  in  transit,  154. 
failure  to  post  rates,  308. 

failure  to  publish  when  undue  preference,  246,  333. 
failure  to  publish  or  observe,  a  misdemeanor,  422. 
reduction  of  rates  without  filing  schedule  unlawful,  313. 
increase  of  rate,  313. 
contract  for  rate  lower  than  published  rate  not  binding,  305. 

PUBLIC  CHARGE— 

State  legislation  may  exclude  persons  likely  to  become,  10. 

PUBLIC  OPINION— 

influence  of  on  construction  of  Federal  Constitution,  71. 

PUBLIC  SAFETY— 

in  general,  29. 
PUBLIC  SESSIONS  (see  Rules  of  Practice,  Rule  1,  page  G35). 

PUNISHMENT— 

for  refusal  to  obey  injunction  or  other  process,  381. 

Q 

QUARANTINE  LAWS— 

of  State  valid  (see  Regulation  of  Commebce,  Concubrent  Jueisdio- 

tion). 
national  quarantine  laws,  58. 

R 

RAILROADS  (see  Federal  Control  of  State  Reoiti.atton)  — 

concurrent  State  power  in  interstate  railroad  regulation,  27,  444. 
employes,  29. 
carriers  for  hire,  44. 


INDEX.  783 

[referexcls  ari;  to  sections.! 

RAU.ro  ADS— Continued. 

subject  to  legislative  control  unless  exeni|it  hy  charter,  44. 

duty  to  carry,  44. 

State  rules  and  regulations  respecting,  37,  44,  109. 

owned  by  corporations  of  two  States,  a  corporation  of  each,   lOiJ. 

Federal  review  of  State  regulation,  112. 

in  interstate  commerce,  16. 

term  "railroad"  in  section  1  includes  all  bridges  and  ferries  used 

or  operated  in  connection  with  any  railroad,  148. 
but  not  when  operated  by  railroad  company,  148. 
included  in  Anti-Trust  Act,  76. 
Federal  incorporation  of  interstate  roads,  G7. 
State  power  of  regulation  cannot  extend  to  interstate  traflac,  44. 
State  power  of  regulation  may  fix  a  limit  of  charge,  44. 
State  control  of  terminals,  282. 
cannot  require  exclusive  business  of  shipper,  262. 
wholly  in  one  state  when  not  subject  to  the  Act,  135. 
when  subject  to  the  Act,  135. 
State  regulations  under  State  Commissions,  106. 
power  of  regulation  independent  of  incorporation,  107. 
regulations  may  be  made  by  railroads  for  delivery  of  freight,  262. 
regulations  may  be  made    by    railroads    respecting    reduced    rate 

ticket,  218. 
government  regulation  of,  in  England,  45. 
when  not  subject  to  Sec.  20,  405. 
Government  aided   (see  Acr  July  1,  1862). 
reports  of  accidents  (see  Acciokxt  Law,  sec.  1). 
Railroad  Commissions  established  in  States,  44. 
valuation  of  property  as  a  basis  for  rate  making,  168. 
the  unearned  increment,  169. 
damage  to  through  shipment,  403,  407. 

RAPID   TRANSIT— 

warrants  higher  charge,  181,  204. 
RATES  (see  Tickets,  Thkougu  R-\tes,  Ciiauges  Reasonable  and  Just, 
Inteestate  Commerce  Commission,  Unjust  Discrimination,  Cab- 
load  Rates,  Cargo  Rates,  Amendments  to  hie  Interstate  Com- 
merce Acrs,  PuRi.icATiox)  — 

quantity  of  freight  as  affecting  rates,  197,  201,  202. 

wholesale  rates  in  passenger  and  freight  traffic  distinguished,  202, 
203. 

limitation  by  Federal  authority  of  State  power  in  regulating  inter- 
state rates,  120. 

what  is  reasonable  in  the  limitation  of  State  authority,  120. 

reasonableness  of  State  rate  determined  without  reference  to  in- 
terstate  commerce,   121. 

character  of  freight  as  affecting  rate,  172,  186. 

cost  of  service  and  needs  of  shipper  as  affecting  rates,  189. 


784  INDEX. 

[referexcf.s  are  to  sections.] 

RATES— Continued. 

rapid  transit  as  affecting  rates,  186,  204. 

cost  of  handling  as  affecting  rates,  186,  189. 

distance  as  affecting  rates,  187,  239. 

reasonableness  of  rates  question  one  of  fact,  54,  162,  230. 

no  definite  standard  of,  in  railroad  rates,  120. 

finding  of  Commission  does  not  extend  to  ultimate  question  of,  54. 

practical  difficulties  in  the  enforcement  of,  162. 

standard  of,  under  State  statutes,  162. 

standard  of,  under  the  Act,  163. 

supreme  court  on  State  regulations,  122. 

schedules  of  and  special  rates,  123. 

what  considered  in  determining,  120,  177,  240. 

presumption  of  reasonableness  from  long  continuance,  175. 

burden  of  proof,  176. 

interests  of  both  the  public  and  owner  of  property  to  he  consid- 
ered, 125. 

in  absence  of  legislation  court  must  decide,  161. 

Federal  courts,  on  reasonableness  of,  167. 

capitalization  of  railroad  as  basis  of  rates,  168. 

reasonableness  of,  under  section  1,  distinguished  from  preferences 
under  section  3,  171. 

comparison  not  a  basis  for  determining  reasonableness,  176. 

fixing  of  future  rate  a  legislative,  not  administrative  function,  188. 

or  judicial  function,  54,  166. 

power  of  Interstate  Commerce  Commission,  to  fix  rates,  52,  165, 
372. 

limitation  of  that  power,  174. 

effect  of  Commission's  ruling  on  reasonableness  of  rates,  173. 

Interstate  Commerce  Commission  may  fix  maximum  rates  for  the 
future,  52,  174,  372. 

competitive  effect  of  intrastate  rates  on  interstate  rates,  110. 

question  of  reasonableness  raised  by  defense  in  action  at  law,  117. 

question  of  reasonableness  raised  by  bill  in  equity,  117. 

may  be  unreasonable  because  too  low  as  well  as  too  high,  167. 

reasonableness  under  Sees.  1  and  3,  of  Act  171,  240. 

consideration  of,  in  the  courts,  172. 

rulings  of  Commission,  173. 

immaterial  whether  railroads  combine  or  act  separately,  178. 

tax  return  of  railroad  officials  to  establish,  172. 

interstate  rates  bear  no  comparison  to  State  rates,  182. 

reasonableness  and  proportion,  190. 

in  comparison  of  rates,  dissimilar  circumstances  and  conditions 
are  to  be  considered,  182,  293. 

what  is  a  reasonable  rate,  178. 

rates  as  affected  by  development  of  country,  183. 

res  adjndicata,  179. 


INDEX,  785 

[references  are  to  sections.] 

RATES— Continued. 

inter-dependence  of  rates,  184,  185. 

grouping  of  not  illegal,  239. 

rates  on  lines  of  rival  companies  or  different  branches  of  same  com- 

I)any  properly  considered,  ISO. 
increase  of  rates  for  purpose  of  securing  traffic  under  agreement. 

unreasonable,   18S. 
standard  of  reasonableness  considered  by  the  courts  not  the  sani'j 

as  between  carrier  and  patron,  120. 
presumption  of  reasonableness  of  State  imposed  rates,  120. 
rate  per  ton  per  mile  rule,  180. 
reduction  of  rates  without  consent  of  connecting  carrier  or  filing 

of  schedule,  .306. 
advance  of  without  reason,  ?>0G. 
three  days'  notice  required,  305,  313. 
presumption  of  unreasonableness,  175. 
over  continuous  line  where  no  rate  established,  313. 
rates  may  be  reasonable  in  one  part  of  country  and  not  in  another, 

188. 
no  connection  between  rates  in  opposite  directions,   188. 
filed  or  participated  in,  deemed  legal   (see  Elkixs  Act). 
transfer  from  rate  to  another  does  not  determine  future  rate,  276. 
commcdity  rate  for  intended  settlers  only,  275. 
commutation  rates,  181. 

rates  cannot  be  apportioned  according  to  mileage,  141. 
share  of  through  rate  not  measure  of  reasonable  rate,  188. 
apportionment  of  through  rates  to  different  parts  of  line  significant 

on  question  of  reasonableness,  188. 
trade  zones,  297. 

REBATES    (see  U.njust  Discrimixatiox,  Preference  and  AnvANTAOE, 
Ei.Ki.NS  Act)  — 
effect  upon  of  contract  of  affreightment,  225. 
given  to  secure  business,  unlawful,  200. 

contracts  for,  made  prior  to  taking  effect  of  Act  unenforcible  there- 
after, 223. 
offense  committed  prior  to  passage  of  Elkins  Act,  424. 
unit  of  offense  under  Elkins  Act,  427. 
knowledge  of  published  rate,  427. 
defense  to,  428. 
intent,  428. 
conspiracies  in  rebating,  429. 
what  are  rebates,  430. 

RECEIVERS— 

subject  to  Act,  141. 

RECONSIG.X.ME.XT  CHARGES  (see  Charges). 
GO 


786  INDEX. 

•[references  are  to  sections.] 

REFRIGERATION  IN  TRANSIT— 
duties  of  carrier,  154. 
pre-casting,  154. 

REGULATION  OF  COMMERCE  (see  Acts  in  Regulation  of  Commerce 
Corporations)  — 
exclusive  jurisdiction  of  Cojigrcss. 

concurrent  and  exclusive  powers  distinguished,  23. 

distinction  between  power  over  interstate  and   foreign   commerce 
and  with  Indian  tribes,  38,  48. 

all  subjects  national  in  nature  or  requiring  one  uniform  system, 
22,  23. 

all  interstate  shipments,  7. 

regulation  of  interstate  employees,  62. 

not  impaired  because  intrastate  service  is  affected,  62. 

all  interstate  bridges,  7,  25. 

release  of  the  Federal  regulating  power,  56. 

regulation  by  the  delegation  of  power,  56. 

development  of  the  latent  Federal  power  in  regulation  of  commerce, 
71. 

judicial  formulation  of  extent  of  power,  60. 

not  the  exercise  but  the  existence  of  the  power  in  Congress  that 
invalidates  State  laws,  38,  41. 

regulation  in  relation  to  labor,  89. 

beginning  of  Federal  regulation,  41. 

Meat  Inspection  Act,  58. 

Food  and  Drug  Act,  58. 

National  Quarantine,  58. 

commerce  may  be  regulated  by  inaction  of  Congress,  23,  37,  38,  39. 

supremacy  of  Federal  power,  61. 

extent  of  Federal  powers,  60. 
.unexercised  Federal  regulating  power,  60. 

unexercised  Federal  powers  in  matters  of  State  legislation,  60,  01. 

in  granting  corporate  charters,  67,  68. 

question  for  Supreme  Court  to  determine  whether  State  laws  abro- 
gated by  Act  of  Congress,  60. 

regulation  by  taxing  power,  66,  66,  n. 

prohibition  and  regulation,  65. 

regulation  of  navigation  over  inland  waters,  24. 

Federal  and  State  courts,  jurisdiction  of,  47. 

inaction  of  Congress  in  foreign  and  interstate  commerce  distin- 
guished,  38. 

inaction  of  Congress  means  interstate  commerce  must  be  free,  37, 
56. 

action  by  Congress  nullifies  State  laws,  S.^i. 

limitation  upon  Federal  authority  in  interstate  commerce,  64. 
due  process  of  law,  64. 


INDEX.  4  b  t 

[RFri;i!i:.vcES  akk  to  sections.] 

REGULATION  OF  COMMERCE— Continued. 
preference  over  ports,  etc.,  C4. 
intrastate  commerce,  64. 
Supreme  Court  on  the  three  classes,  24. 
power  over  State  corporations,   tj!5. 

dissolution  of  for  violation  of  Federal  laws,  C3. 

by  national  incorporation,  1,  67. 
concvrrent  jurisdiction  incliKhs — 

regulation  of  pilots,  25. 

quarantine  laws,  25,  36. 

inspection  laws,  25,  35. 

live  stock  laws,  34,  35,  35,  n. 

policing  of  harbors,  34,  35. 

improvement  of  navigable  waters,  23. 

regulation  of  wharves,  25. 

regulation  of  bridges  over  navigable  waters,  25,  54. 

regulation  of  piers,  25. 

regulation  of  docks,  25. 

regulation  of  railroad  employes,  29. 

construction  of  bridges  across  navigable  waters  of  a  State,  25, 
54. 

establishing  of  ferries  across  navigable  waters  of  a  State,  23, 
54. 

contractual  relations  of  interstate  carrier  and  shipper,  32. 

regulation  of  telegraph  companies'  poles,  wires,  etc.,  2G,  55. 

exclusion  of  diseased  cattle,  33. 

jurisdiction  in  interstate  railroad  traffic,  27,  42,  47. 

action  of  Congress  renders  State  law  void,  24,  27,  29. 

concurrent  and  exclusive  powers  distinguished,  23. 

effect  of  police  laws  of  State  on  interstate  carriers,  27. 

effect  of  Act  of  Congress  on  police  laws  of  State,  27. 

State  laws  prohibiting  running  of  freight  trains  on  Sunday,  28. 

stoppage  of  through  trains,  31. 
exclvsiiv  State  jurisdit  tion  includes — 

regulation  under  rules  of  common  law  in  State  court,  33. 

construction  of  highways,   24. 

construction  of  turnpikes,  24. 

construction  of  railways  between  points  in  the  same  State,  24. 

construction  of  canals  between  points  in  the  same  State,  24. 

operation  of  bridges  over  navigable  streams,  24. 

•where  State  powers  end,  60. 

regulation  of  domestic  commerce,  129. 

State  may  make  reasonable  regulations  for,  129. 

State  may  enforce  facilities  for  transportation  of  freight,  129. 

State  may  alter,  amend,  or  re!)cal  charter,  when,  129. 

State  may  prohibit  discrimination,  129. 


788  INDEX. 

[referexces  are  to  sections.] 

REGULATION  OF  CO:\IMERCE— Conti?i«ed. 

State  may  prohibit    coneolidation    of    parallel    or    competing 

lines,  129. 
State  may  require  erection  of  stations  along  line  of  railroad, 

129. 
State  Anti-Trust  laws,  130. 
classification  of  State  railroad  legislation,  131, 

REHEARINGS  (see  Rules  of  Practice,  Rule  15,  page  662;  Sec.  16a). 

RELIEF  FROM  OPERATION  OF   SECTION   4    (see  Fourth   Section, 
proviso  of),  2. 

REMOVAL  OF  CAUSE  TO  FEDERAL  COURT— 

State  laws  preventing  interstate  companies  from,  43. 
national  corporation  may  remove,  67. 

no  jurisdiction  on  removal  where  State  court  had  none,  47,  48,  325. 
no  jurisdiction  unless  cause  be  originally  brought  in  Federal  court, 
47,  n. 

REMOVAL  OF  PERSON— 

from  one  district  to  another  for  trial,  339. 

REPARATION   (see  Damages)  — 

jurisdiction  of  Commissions  in,  385. 

before  investigation  relieves  carrier  from  liability,  356. 

jurisdiction  of  State  courts,  48,  390. 

demand  for  must  be  specifically  stated,  360. 

limitation  of  action  for,  3S4. 

finding  of  reasonableness  before  routing,  384. 

REPORTS  (see  Twentieth  Section)  — 

by  railroads  to  Commission,  52,  403,  543. 

carriers  must  render  annual,  to  Commission,  403,  404. 

what  reports  to  contain,  403. 

railroads  subject  to,  405. 

liability  of  initial  carrier,  407. 

enforcement  of  by  viaiidomus.  406. 

Commission  to  render  annual,  to  Congress,  411. 

REPORTS  OF  ACCIDENTS   (see  Accident  Law,  section     1). 

REPORTS  OF  DECISIONS  OF  COMMISSION— 

Int.  Com.  Rep.,  368. 

I.  C.  C.  R.,  368. 
"RES  .JUDICATA"   (see  .It  diciae  Precedent)  — 

with  respect  of  rates,  179,  377. 
RESTRAINT  OF  TRADE   (Anti-Trust  Act)  — 

demand  for  Federal  regulation  of  business  combinations,  72. 

contracts  in,  at  common  law,  and  under  Anti-Trust  Act,  74,  80., 


INDEX. 


789 


[kkkfrknces  are  to  sections.] 

RESTRAINT  OF  TRADE— Continued. 
modPin  law  of,  80. 
Anti-Trust  Act  of  1S90,  74. 
constitutionality.   T.'j. 
railicads   included,   76. 
monopoly,  meaning  of,  83. 
direct  and  accidental,  78. 
contracts  in,  and  how  construed,  77. 
contracts  restricting  sales  by  rebates  not  unlawful,  79. 
restraints  of  competition  must  be  substantial,  79. 
combinations  between  interstate  railroads  suppressing  competition, 

79. 

jurisdiction  over  combinations  within  a  State  not  affectinK  inter- 
state commerce,  64. 

agreements  for  charges  for  local  facilities  not  included,  78. 

combinations  in  restraint  of  interstate  commerce  unlawful,  though 
subject  of  contract  within  jurisdiction  of  a  State,  81,  84. 

restrictive  sales  in  interstate  commerce,  86. 

combination  for  employment  of  none  but  union  labor  may  be.  84. 

commerce  within  a  State,  84. 

complete  monopoly  unnecessary,  sufficient  if  prices  enhanced  and 
competition  suppressed,  82.  317. 

Incidental  restraint  of  trade  not  unlawful,  78,  322. 

State  anti-trust  laws,  130. 

REVISORY  POWER  (see  Courts). 

ROLLING  STOCK  (see  Car  Servtct:)  — 
not  subject  to  attachment,  when,  39. 

ROUTING— 

selection  by  shipper,  376. 

RULE  OF  REASON  (see  Anti-Trust  Act). 

RULES  AXD  REGULATIONS— 

respecting  reduced  rate  tickets,  218. 

collection  of  extra  fare  from  passenger  without  ticket,  218. 

unreasonable,  may  be  discriminative,  209. 


SAFETY  APPLIANCE  ACT— 
Section  1,  497. 
Section  2,  503. 
Section  3,  509L 
Section  4,  511. 
Section  ">,  513. 
Section  6,  515. 
Section  7.  ."19. 


790  INDEX. 

[referexcks  are  to  sections.] 

SAFETY  APPLIANCE  ACT— Continued. 
Section  S,  521. 

amendment  of  March  2,  1903,  525. 
amendment  of  April,  1910,  526. 
railroads  subject  to  this  Act,  498. 

common  law  duty  of  carrier  in  relation  to  safety  appliances,  499. 
petition  and  procedure  under  the  Act,  500. 
question  for  jury  whether  railroads  comply  with  the  Act,  500. 
Federal  question  in  suits  under  the  Act,  501. 
the  Act  in  State  courts,  502. 
coupler  equipment  under  section  2,  503. 
automatic  couplers  of  different  makes,  58,  505. 
absolute  duty  to  provide,  507. 
meaning  of  word  "car"  in  section  2,  506. 
when  "engaged  in"  interstate  commerce,  508,  519,  520. 
responsibility  of  carriers  for  cars  out  of  condition,  524. 
assumption  of  risk,  521,  522. 
contributory  negligence,  522,  533. 
discretion  of  the  Commission  in  delaying  enforcement  of  the  Act, 

519,  520. 
the  use  of  defective  cars  forbidden,  510. 
driving  wheel  and  train  brakes  (see  Section  1),  497. 
automatic  couplers  (see  Section  2),  503. 

when  carriers  may  refuse  to  receive  cars  (see  Section  3),  509. 
grab-irons  and  handholds  (see  Section  4),  511. 
construction  of  Sec.  4,  512. 

standard  height  of  drawbars  for  freight  cars  (see  Section  5),  513. 
delegation  of  power  sustained,  514. 
penalties  for  violation  of  Act  (see  Section  6),  515. 
Supreme  Court  on  prosecutions  for  penalties,  517. 
burden  of  proof,  518. 
enforcement  of  Act  by  prosecution,  516. 

SALE  (see  Orkixal  Package)  — 

as  incident  of  manufacture,  distinguished  from  commerce,  433. 
restrictive  sales  in  interstate  commerce,  86. 

SAVINGS  BANKS  IN  DISTRICT  OF  COLUMBIA— 

incorporated  by  Congress,  67. 

SCHEDULE  (see  Publication)  — 
what  is  included  in,  311. 

filing  of  raises  no  presumption  of  legality,  309. 
failure  to  challenge  does  not  make  unlawful  rate  lawful,  309. 
what  is  sufficient  publication  and  filing,  312. 
Commission's  power  of  modification,  316. 


INDEX.  791 

[rEFEBEXCES  ABE  TO  SECTIONS.] 

SECOND  SECTION  (see  Pki-fkbence  and  Auna.nxace,  Unjl&t  Discrimi- 
nation)— 
origin  of  the  section,  193. 
purpose  of  the  section,  194. 

does  not  deal  with  preferences  in  favor  of  or  against  localities,  194. 
does  not  deal  with  discrimination  between  kinds  of  traffic,  194. 
effectiveness  of  the  section,  195. 
application  of  the  section,  221. 

no  application  to  cases  occurring  before  Act  passed,  223. 
meaning  of  a  "like  kind  of  traffic,"  221. 
enforcement  of  the  section,  22n. 
enforcement  by  injunction,   224. 
what  constitutes  violation  of  section,  193. 

SECRET  FORMULA  CONTRACTS— 
not  within  Anti-Trust  Act,  453. 

SECRETARY  OF  AGRICULTURE   (see  Live  Stock). 

SECRETARY  OF  WAR— 

powers  and  duty  of  in  regulation  of  commerce,  58,  n, 

SEIZURE  AND  CONDEMNATION  OF  PROPERTY— 
how  enforced  under  section  6,  Anti-Trust  Act,  447. 

SERVICE  (see  Rates,  Accessoriai,  Services)  — 

difference  in  warrants  difference  in  rates,  198-204. 

remedy  where  special  service  charged  for  but  not  rendered,  204. 

SERVICE  OF  PAPERS  (see  Rules  of  Practice,  rule  C,  page  657). 

SEVENTEENTH   SECTION— 

Interstate  Commerce  Commission — Form  of  Procedure,  398. 

SEVENTH  SECTION— 

considered  in  connection  with  section  3,  318. 
judicial  application  of  section,  318. 

continuous  carriage  of  freight  from  place  of  shipment  to  place  of 
destination,  317. 

SHEEP— 

Sheep  driven  from  one  State  to  another  subject  of  Interstate  com- 
merce, 17. 

SHERMAN  ANTI-TRUST  ACT   (see  Anti-Tbust  Act  or  1890). 

SHIPMENT— 

State  cannot  impose  penalty  for  disobedience  of,  40,  n 
discrimination  in  mode  of,  271. 

SHIPPER  AND  CARRIER  THE  SAME — 

discrimination  by  carrier  in  favor  of  himself  as  shipper,  214. 


792  INDEX. 

[refekknces  ake  to  sections.] 

SHIPPERS'   ORDERS— 

State  cannot  impose  penalty  for  disobedience  of,  40. 

SIDE  TRACK  AND  COXXECTIONS— 

State  legislation  concerning,  2G2. 

railroads  under  no  obligation  to  build  spur  track,  2o2. 

no  discrimination  to  build  for  one  and  refuse  to  another,  262. 

SIXTEENTH   SECTION— 
general  provisions,  381. 
Amendments  of  1906  and  1910,  382. 
trial  by  jury,  383. 

limitation  of  action  for  reparation,  384. 

petition  to  United  States  Courts  in  cases  of  disobedience  of  orders 
of  Commission,  381. 

SIXTEEN  A— 

rehearing,  review,  etc.,  397. 

SIXTH  SECTION   (see  Publication)  — 
as  amended,  304. 

printing  and  posting  of  schedules  of  rates,  fares  and  charges,  304. 
history  of,  305. 
effect  of  publication,  306. 
Amendments  of  March  2  and  February  19,  1903,  30,5. 

SLEEPING  CAR  COMPANIES    (see  Interstate  Commerce  Acts). 

SOCIAL  CIRCLE  CASE,  51. 

"SOLICITING"— 

in  interstate  commerce,   97. 

SOUTH  CAROLINA— 

inspection  laws  of,  invalid,  27. 

SPECIAL  PRIVILEGE    (see   Interstate  Commerce  Commission,  Pow- 
ers of). 

SPECIAL  SERVICE  (see  Rates,  Accessorial  Services). 

SPEED  OF  TRAINS  WITHIN  MUNICIPAL  LIMITS— 
may  be  regulated  by  State  laws,  29. 

SPIRITUOUS  LIQUORS   (see  Wilson  Bill  of  1890)  — 

subject  to  commerce,  10. 

State  may  prohibit  Introduction  of,  23. 

State  cannot  prohibit  introduction  and  sale  in  original  package,  10. 

State  may  prohibit  domestic  manufacture  and  sale  of,  10. 

South  Carolina  dispensary  laws  invalid,  37. 
SPUR  ON  SIDE  TRACK  (see  Side  Tracks  and  Connections). 


INDEX.  793 

[BErERENCKS  AKE  TO  SIXTIONS.l 

STANDARD  OIL  CASE  (see  ANn-TursT  Act),  77,  78,  HI,  473. 

STATE   (see  Reculation  oi'  Commkkce)  — 

not  a  person  or  corporation  within  meaning  of  section  7.  Anti-Trust 

Act,  481. 
power  to  regulate  rate.s  by  legislature  or  by  State  Commission,  lOG. 

STATE  ANTI-TRUST  LAW— 

in  connection  with  14th  Amendment,  l.jO. 

protection  of  carrier  against  discriminative  State  legislation,  128. 

discriminations  may  be  prohibited,  129. 

facilities  for  interchange  of  traffic  may  be  enjoined,   120. 

reasonableness  of  contracts   between   carrier  and   patron   or  other 

carrier,  129. 
consolidation  of  parallel  and  competitive  lines  may  be  prohibited. 

129. 
statute    valid    punishing    wilful    or    malicious    injury    to    another's 

business,  130. 
statute  invalid  which  punishes  offense  committed  by  jjerson  outside 

of  State,  130. 
f-:atute  invalid  which  exempts  certain  class  of  the  community,  13u. 

STATE   COMMISSION— 

resort  to  in  first  instance,  329. 

effect  of  rulings  of  on  Interstate  Commerce  Comniis.-5ion.  270. 
regulation  of  railroads,  lOG. 
subject  to  federal  review,  112,  120. 

may  be  delegated  the  power  to  fix  schedule  of  rates,  106, 
orders  of  not  judicial,  106. 
expenses  of,  how  apportioned,  106. 
limitation  of  authority  in  domestic  commerce,  Itif). 
suit  against,  not  against  State  within  meaning  of  Eleventh  Amend- 
ment, 112. 
no  control  over  proportional  tariffs,  261. 

STATE  CORPORATIONS— 
Federal  regulation,  63. 

STATE  COURTS— 

on  the  Commerce  Clause,  40. 

jurisdiction  of,  in  the  regulation  of  commerce.  48. 

jurisdiction  in  common  law  of  interstate  commerce,  44,  45. 

under  Anti-Trust  Act,  470. 

under  Employer's  Liability  Act,  539. 

in  reparation  cases  under  sec.  IG,  388. 
jurisdiction  of  rights  created  by  Congress.  48. 
no  jurisdiction  in  absence  of  resort  to  State  Commission.  329. 


794  INDEX. 

STATE  LEGISLATION  (see  Federal  Control  of,  etc.)  — 
protection  of  carrier  against  discriminating,  128. 
interstate  commerce  free  from,  37. 

STATE  RAILROAD  LEGISLATION   (see  Fedebal  COxNtrol  of,  etc.)  — 
classification  of,  valid  if  reasonable,  131. 
illustrative  cases  on,  131. 

STATE  REGULATIONS  (see  Regulations  of  Commerce,  Federal  Con- 
trol, ETC.)  — 
local  business  of  interstate  companies,  43. 
in  United  States,  44. 
rates  of  charge,  44. 
interstate  commerce  free  from,  37. 

STATE  STATUTES— 

final  rulings  on  by  statute  courts,  40. 
superseded  by  Employer's  Liability  Act,  539. 

STATIONS— 

State  statute  valid  requiring  erection  of,  129. 
management  of  must  not  result  in  preferences,  249. 
exclusive  control  of,  287. 

STIPULATIONS  (see  Rules  of  Practice,  rule  10,  page  658). 

STOCKYARDS— 

extra  charge  for  delivery  to,  when  off  main  line,  153. 

Stockyards  Case,  67. 

State  statute  regulating  charge  of  one  only,  invalid,  131. 

STOPPAGE  IN  TRANSIT  PRIVILEGES   (see  Special  Privileges)  — 

discussed,  216. 

unjust  discrimination  through  abuse  of,  217. 

includes  right  of  milling  grain  in  transit,  21C,  260,  234. 

right  of  connecting  carrier  as  to,  286. 

Includes  right  of  compressing  cotton,  216,  260. 

includes  right  of  manufacture  of  logs  into  lumber,  258. 

does  not  include  stop  between  point  of  purchase  and  point  of  sale,. 
258. 

the  "Tap  Line"  Case,  216,  258. 
STOPPAGE  OF  TRAINS  AT  CERTAIN  STATIONS— 

to  what  extent  State  may  compel,  31,  40,  n. 

elements  considered,  31. 
STORAGE  (see  Delivery,  Cartage)  — 

no  additional  duty  imposed  by  section  1,  149. 

charges  for  must  be  published,  311. 

services,  if  rendered,  must  be  impartial  and  reasonable,  149. 

nnjust  discrimination  and  undue  preference  may  be  based  on,  149,. 
215,  246. 


INDEX,  TO.') 

[references  AltE  TO  SECTIONS.] 

STORAGE— Continued. 

charge  for,  in  depot  may  be  higher  than  in  warehouse,  149. 
of  grain  elevators  at  stoppage  points,  149,  21C. 
free  storage  as  basis  of  unjust  discrimination,  215. 
right  of  carrier  to  contract  for  storage  of  through  grain,  in  eleva- 
tors at  terminals  in  transit,  21  ij. 
bulk  grain  storage  as  part  of  transportation,  151. 

STREET  RAILROAD— 

city  ordinance  prohibiting  discrimination,  void,  40,  n, 

STRIKES  AND  BOYCOTTS— 

distinguished   (see  Conspiract). 

within  Anti-Trust  Act,  92. 

contempt,  92,  n. 

interference  with  interstate  commerce  illegal,  92. 

strikes  by  interstate  employers,  93,  96. 

boycott  may  result  in  conspiracy,  92. 

concerted  quitting  employment  may  be  lawful,  93. 

when  concerted  quitting  unlawful,  93. 

boycott  of  any  form  of  interstate  commerce,  unlawful,  96. 

immaterial  that  no  violence  results,  93. 

peaceable  strike  lawful,  337. 

malice,  96. 

sympathetic  strikes  and  boycotts,  93. 

picketing  and  soliciting,  97. 

injunctions,  100,  105. 

to  compel  attendance,  343,  381. 

SUBPOENAS  (see  Rules  of  Practice,  rule  12,  page  660)  — 
how  served  in  bringing  parties,  474. 
to  compel  attendance,  343,  381. 

SUBROGATION— 

initial  carrier  against  carrier  responsible  for  damage  to  through 
shipment,  403. 

SUGAR  TRUST  CASE,  76,  S4. 

SUNDAY  LAWS— 

State  may  prohibit  running  of  freight  trains  on  Sunday,  28,  42. 

In  general,  28. 
SUPERSEDEAS  (see  Appeal). 
SURFACE  CROSSINGS— 

State  law  for  protection  of,  valid,  29. 
SWITCHING  CONNECTIONS— 

construction  of  under  Act,  158. 

between  steam  and  electric  railways,  374. 


796  INDEX. 

[rkferexces  are  to  secttoxs.] 

SWITCHING  RAILROAD— 

subject  to  State  control  when  doing  local  business,  281. 
when  not  subject  to  the  Interstate  Commerce  Act,  140. 

SYMPATHETIC   STRIKES   AND   BOYCOTTS    (see   Strikes   and  Boy- 
cotts). 

T 
TANK  CARS  (see  Oil)  — 

duty  of  carrier  to  furnish,  253,  271. 

TAP  LINES— 

allowance  to,  discriminatory,  212. 

plant  facilities.  212. 

private  transfer  companies,  226. 

TARIFFS  (see  Rater,  Through  Rates). 

TAXATION— 

regulation  of  commerce  through,  6G. 

State  taxation  and  interstate  commerce,  17,  20,  37. 

State  taxing  power  of  corporations  engaged  in  interstate  commerce, 

21,  26. 
property  in  commercial  transit  free  from  State  taxation,  17,  20. 
business  of  carrying  on  interstate  commerce  not  taxable,  21,  37. 
property  employed  in  taxable,  21. 
intangible  property,  how  located  in  State,  20,  21. 
the  "unit  rule,"  21. 
the  "average  habitual  use"  rule,  21. 

property  employed  in  taxable,  21. 
receipts  from  interstate  commerce  cannot  be  taxed,  21» 
Intent  to  export  does  not  free  State  taxation,  7,  147. 
franchise  taxation,  22. 

tax  may  be  apportioned  according  to  mileage,   141. 
on  broker,  when  lawful,  8. 
State  tax  on  telegraph  companies,  26. 
State  tax  on  alien  passengers  void,  7. 
Congress,  subject  to  limitations,  may  impose  taxes  on  subjects  of 

commerce  and  on  rights  to  carry  on,  66. 
on  gross  receipts,  40,  n. 
on  bills  of  lading,  40,  n. 

TEAMS— 

transportation  by,  not  subject  to  the  Act,  135. 

TELEGRAPH  COMPANIES— 
in  interstate  commerce,  16. 
regulation  of,  5.5. 

Amendment  of  1910. 


INDEX.  797 

riUI'KKKNCES  AKK  TO  SKCTIOXS.] 

TELEGRAPH  COMVASIES— Continued. 
cannot  be  excluded  by  State,  2i'>. 
valid  State  regulation,  2(i. 
State  license  fee  for  use  of  streets,  22. 
power  of  eminent  domain,  55. 

interstate  business  governed  by  rules  of  common  law.  55. 
powers  of  under  act  of  18G2,  55. 
does  not  include  railro-d  property,  55. 

powers  of  under  act  of  1SG6,  55   (see  Act  of  July  24.  ISCG). 
State  statute  void  conferring  exclusive  rights  on  State  company,  55. 

TELEGRAPH  MESSAGES— 
regulation  of,  55. 

when  between  States  are  interstate  commerce,  7. 
are  interstate  commerce,  when  interstate.  7. 
cannot  be  taxed  by  State,  2G. 
State  may  prescribe  delivery  in  State,  26. 
State  may  tax  intrastate  messages,  26. 
State  cannot  prescribe  delivery  outside  of  State,  26. 
damage  for  failure  to  deliver,  27,  n. 

TELEPHONE  COMPANIES— 

in  interstate  commerce,  16. 

not  included  in  Act  of  1866,  55. 

discrimination  in  service,  220. 
TELEPHONE  MESSAGES— 

are  interstate  commerce,  when  interstate,  7. 

Act  of  July  24.  18C6.  not  applicable  to,  7. 
TENNESSEE  COAL  CASE,  437. 
TENNESSEE  DRUMMERS'  CASE,  49. 
TENTH  AMENDMENT  TO  CONSTITUTION,  1,  5. 
TENTH  SECTION— 

provisions  of,  333. 

as  amended  March  2,  1899,  334. 

Amendments  of  1903,  335. 

illegal  combinations  under,  336. 

incidental  interference  with  interstate  commerce,  337. 

construction  of  section,  33S. 

essentials  of  offense  under  section  10,  338. 

removal  of  accused  persons.  338. 

limitations  of  criminal  prosecutions,  340. 

TERMINALS  (see  F.vcilities  for  Lntercha.nge  of  Trafftc,  Track?  xyu 
Tfrmixai,  Facilities)  — 
State  and  municipal  control  of,  282. 
no  duty  to  furnish  same  facilities  for  all  kinds  of  traffic.  262. 


798  INDEX. 

[kkfkrexces  are  to  sectioxs.] 

TERMINALS— ContiuMcd. 

charges  must  be  published,  311. 

extra  charge  allowed  for  delivery  off  main  line,  311. 

TERRITORIAL  COURTS— 

jurisdiction  of  under  Interstate  Commerce  and  Anti-Trust  Acts,  332. 

TESTIMONY  (see  Ninth  Section;  Evidence,  Witnesses,  Immunitt) — 
experts  to  determine  difference  in  cost  of  moving  between  local  and 

through  freight,  180. 
compelling  production  before  Commission,  52. 
in  determining  reasonableness  of  rates,  172. 
section  nine  compelling,  unconstitutional,  332. 
in  circuit  court  not  limited  to  that  before  Commission,  390. 
compelling  self-incriminatory,  345,  488. 

THIRD  SECTION  (see  Unjust  Discrimination,  Preference  and  Ad- 
vantage, LocALrriES,  Kinds  of  Traffic,  Interchange  of  Traf- 
fic)— 

origin  of,  228. 

relation  to  sections  1  and  2,  229, 

relation  to  section  4,  230. 

all  discrimination  not  included,  228. 

discrimination  must  be  undue  or  unreasonable,  228. 

not  limited  to  discrimination  in  rates  alone,  229. 

construction  of,  as  to  facilities  for  interchange  of  traffic,  278,  281. 

competition  rule,  231,  232. 

THIRTEENTH  SECTION   (see  Procedure,  Pleadings  and  Proof,  Bur- 
den OF  Proof,  Production  of  Books  and  Papers,  Judicial  Pre- 
cedent) . 
complaints  to  Commission,  356. 
Amendment  of  1910,  347. 
procedure  before,  358. 
pleadings  and  proof,  359, 

THROUGH  RATE— 

agreements  for  division  of  may  be  unlawful   (see  Pooling,  Fifth 

Section)  — 
refusal  to  give,  when  not  unjr.st  discrimination,  241. 
admit  of  great  variety,  180. 
favored  because  cheaper  rate  result,  ISO. 
relation  of  proportion  of,  to  the  rate  over  the  same  distance  along 

same  line  must  be  reasonable,  180. 
responsibility  for  through  rates,  314. 
cannot  be  relieved  from  by  breaking  haul  In  two,  314. 
not  responsible  for  rate  given  merely  for  information,  314, 


INDEX.  799 

[r.rFPRrxcE.s  are  to  skctioxs,] 
THROUGH  RATE— 

where  lines  of  several  carriers  are  conducted  as  one  system  part- 
nership established,  314. 
ownership  of  stock  or  bonds  of  another  road  does  not  show  such 
partnership,  314. 

not  criterion  for  determining  whether  separate  tariffs  violate  4th 

section,  291. 
publication  of,  313. 
must  be  authorized,  315. 
carrier  bound  by  participation  In,  426. 

THROUGH  ROUTING  (see  Local  and  Through  Traffic)  — 
matter  of  contract,  140,  ISO,  278,  2SG,  318. 
power  of  Commission  to  compel,  52,  108,  278,  318,  373. 
not  compelled  by  section  3,  278. 
right  of  exclusive  through  routing,  284. 
court  no  power  to  compel,  278. 
Act  of  June  15,  ISGG,  does  not  compel,  42. 
to  establish  common  control,  management,  etc.,  140. 
agreements  controlling  unlawful   (see  Fifth  Section,  Pooianq). 
continuous  carriage,  317. 
establishment  of  by  carriers,  159. 

TICKETS— 

State  cannot  make  ticket  binding  on  railroad  unreasonable  time 
40,  n. 

State  regulation  In  general,  128. 

miscellaneous  kinds,  412,  416. 

mileage,  excursion  and  commutation.  Issuance  not  compulsory,  415. 

withdrawal  of  at  will,  416. 

sale  of,  412. 

party  rates  lawful,  201. 

land  explorers'  tickets  lawful,  201. 

settlers'  tickets  lawful,  201. 

Immigrant  tickets  lawful,  201. 

reduced  tickets  permissive  but  not  compulsory,  416. 

reduced  tickets  if  issued  must  be  done  impartially,  416. 

excursion  tickets,  417. 
TIME— 

allowed  for  making  proof,  359. 

of  closing  freight  station  may  effect  unjust  discrimination,  249. 

contract  for  given  time  of  arrival  en  forcible,  246. 
TOBACCO— 

subject  of  commerce,  10. 

State  cannot  prohibit  Intioductlon  and  sale  of  in  original  package 
10. 


800  INDEX. 

[references  are  to  sectioxs.] 

TOBACCO— Co7itinued. 

State  may  prohibit  domestic  manufacture  and  sale  of,  10. 
State  may  prohibit  introduction  not  in  original  package,  25. 

State  may  exact  for  use  of  navigable  waters,  when,  25. 

TRACKAGE— 

contract  right  of,  285. 

Commission  no  power  to  interfere  with,  285. 

TRACKS  AND   TERMINAL  FACILITIES    (see  Facilities  for   Inter- 
change OF  Traffic,  Terminals)  — 
Commerce  Court  on,  150. 
meaning  of  term  in  section  3,  278. 

TRADE  MARKS— 

when  interstate  commerce,  8. 

TRADE  UNIONS    (see  National  Trade  Union  Incorporation  Act,  Ap- 
pendix)— 
incorporation  of,  89. 
Incorporation  Act,  67. 
amended  by  Act  of  June  1,  1888.  89. 
no  incorporation  under  up  to  Jan.  1,  1905,  67. 
the  courts  on,  90. 

TRADE  ZONES— 

in  transcontinental  traffic,  297. 

traffic- 
Is  interstate  commerce,  7. 

TRAINS—  • 

may  regulate  speed  at  crossings  and  signals,  27. 
cannot  stop  through  trains,  31. 

TRANSFER   COMPANIES— 

discrimination  in  allowance  to.  22G. 
discrimination  between  by  carriers,  278. 

TRANSFER  OF  FREIGHT,  PASSENGERS,  ETC.— 
State  cannot  require  at  certain  points,  40,  n. 

TRANSIT  PRIVILEGES— 

compressions  of  cotton,  260. 

milling  in  transit,  234,  260. 
TRANSPORTATION— 

meaning  of  term,  148. 

bulk  grain  storage,  part  of,  151. 

court  of,  proposed,  51. 


INDEX. 


801 


fliEFEREXCES  AUi:  TO  SECTIONS.] 

TRANSPORTATION— Co«<i>u/e(Z. 
is  coniiuerce,  434. 

of  persons  anil  freight  is  interstate  rommerce,  7. 
through  a  State,  when  subject  to  the  Act,  7,  141. 

TRIAI^- 

place  of,  422. 

removal  of  United  States  prisoners  for,  339. 

TRUST  COMPANIES  IN  DISTRICT  OF  COLUMBIA— 
incorporated  by  Congress,  67. 

TURN-PIKES— 

construction  of,  subject  to  State  control,  24. 

TWELFTH  SECTION  (see  Witxesses)  — 

power  and  duty  of  Commission  to  inquire  into  business  of  carriers,. 

343. 
amendments  to,  343,  345. 

compelling  self-incriminating  testimony,  345,  346. 
general  powers  and  duties  of  Interstate  Commerce  Commission,  355. 
third  paragraph  held  unconstitutional,  345. 

TWENTY-EIGHT  HOUR  CATTLE  LAW— 
passage  of,  546. 

delivery  to  connecting  carrier,  547. 
accidental  or  imavoidable  causes,  548. 
violation  of  rules  of  company,  549. 
press  of  business,  550. 
requested  confinement,  551. 
burden  of  proof,  552. 

government  entitled  to  writ  of  error,  553. 
pleading,  554. 
"wilfully"  construed,  555. 
who  subject  to  Act,  556. 
place  of  bringing  suit,  557. 
procedure — unit  of  dffense,  558. 

TWENTIETH  SECTION — 
amendments  to,  404. 
reports  by  railroads  to  Commission,  403. 

shall  contain  what,  403. 

when  filed,  403. 

additional  time  for  filing,  403. 
penalty,  403. 

Commission  may  prescribe  system  of  accounts,  403. 
monthly  or  periodical  report,  403. 
oath  to  reports,' 403. 
carrier  not  to  keep  other  accounts  than  those  prescribed,  402. 

51 


802  INDEX. 

[KKFEfiKXCKS  ARE  TO  SECTIONS.] 

TWENTIETH  SECTION— Co jjiwiweci. 

Commission  may  employ  special  examiners,  403,  40S, 
punishment  of  for  divulgence  of  facts,  403. 
punishment  of  carrier  for  failure  to  keep,  403. 
punishment  of  person  for  false  entry,  403. 
Amendment  of  Feb.,  1909,  403. 
destruction  of  papers,  403. 
mandamus  to  compel,  403. 
effectiveness  of  publicity  provisions  of  section,  409. 

TWENTY-FIRST  SECTION  (see  Repohts)  — 

Commission  to  render  annual  reports  to  Congress,  410. 

TWENTY-SECOND  SECTION— 

persons  and  property  that  may  be  carried  free  or  at  reduced  rates, 

412. 
illustrative  and  not  exclusive,  414. 
permissive  only,  415. 
Amendment  of  March  2,  1SS9,  413. 
Amendment  of  1895,  413. 
withdrawal  of  commutation  tickets,  416. 
commission  on  excursion  rates,  417. 

TWENTY-THIRD  SECTION— 

jurisdiction  of  United  States  Courts  in  mandamus,  419. 

car  shortage,  420. 

member  of  Commission,  421 


UNDER  BILLING— 

a  means  of  unjust  discrimination,  210. 

"UNDER  SIMILAR  CIRCUMSTANCES  AND  CONDITIONS"   (see  Cir- 
cumstances AND  Conditions)  — 
term  found  in  sections  2  and  4,  199,  231,  290, 

UNDUE  PREFERENCE  (see  Preference  and  Advantage). 
UNJUST  DISCRIMINATION  UNDER  SECTION  2— 

essential  elements  of,  193. 

application  of  section,  221. 

different  forms  of,  210. 

must  be  based  on  difference  in  cost  of  service,  202. 

common  law  as  to  discrimination,  46,  196. 

common  law  right  of  discrimination  not  unlimited,  197. 

in  abuse  of  stoppage  in  transit  privileges,  217. 

payment  of  rebate  not  necessarily  unlawful,  221. 

not  unlawful  where  traffic  is  of  different  kinds,  221,  266. 


[beferk.nces  akk  to  skctio.ns.] 

UNJUST  DISCRIMINATION  UNDER  SECTION  2— Continued. 

competition  as  affecting  rate,  I9y,  2W,  231. 

similar  circumstances  and  conditions,  199,  2J1,  290. 

making  concessions  to  secure  business,  200. 

Party  Rate  Case,  201. 

between  foreign  and  domestic  traffic  in  import  and  export  rates,  233. 

meaning  of,  'hke  kind  of  traffic,"  221. 

consists  in  doing  for  or  allowing  to  one  party  or  place  what  is  de- 
nied to  another,  221. 

refusal  to  pay  mileage  to  i)rivate  car  company  not  unlawful,  221. 

discrimination  based  solely  on  motive  of  shipper  unlawful,  221. 

discriminations  based  solely  on  quantity  of  freight  unlawful,  197» 
202. 

no  discrimination  where  service  different,  197,  204. 

in  car  service,  210,  252  (see  Cab  Skkvice). 

in  station  facilities,  287. 

in  mode  of  shipment,  271. 

prepayment  requirement,  279,  280. 

charge  for  local  rate,  283. 

In  cargo  rates,  209. 

in  carload  and  less  than  carload  rates,  205,  206,  208. 

in  restricted  rates,  211. 

forwarding  agents,  e-xtra  charge  unreasonable,  207. 

in  manufacturers'  rates  on  coal,  210. 

in  rebates  for  use  of  livestock  or  private  cars,  210. 

In  exaction  of  unreasonable  rent  for  private  cars,  210. 

allowance  to  private  transfer  companies,  226. 

in  unjust  classification,  210. 

in  commissions  paid  to  soliciting  agents,  210. 

in  combination  rates  less  than  tariff  rates,  210. 

in  underbilling,  210. 

in  billing  of  net  weight,  210. 

through  interest  in  connecting  companies,  213. 

by  carrier  in  favor  of  itself  as  shipper,  214,  252. 

in  storage  of  goods,  215. 

in  freight  service,  202. 

in  passenger  service,  218.  203. 

in  telephone  service,  220. 

in  retention  of  overcharge,  222, 

in  division  of  joint  rates,  213. 

carrier  may  not  discriminate  in  favor  of  himself  as  shipper,  214,  252. 

all  forms  of  secret  rates  and  rebates,  210. 

stoppage  in  transit  privileges,  216.  217. 

milling  in  transit  privilege,  234. 

merely  making  or  offering  illegal  rates,  not,  246,  321. 


804  INDEX. 

[references  are  to  sectioxs.] 

UNJUST  DISCRIMINATION  UNDER  SECTION  2—Contimi€d. 
natural  advantage,  etc.,  241. 
competing  cities,  242,  243. 

refusal  to  give  througli  rate  lawful  if  impartial,  241. 
railroad  cannot  discriminate  against  town  it  does  not  reach,  241. 
higher  rate  to  point  on  branch  line  not  discriminative,  244. 
.  connecting  carriers  not  responsible  for  initial  carriers,  224. 
import  rule,  235. 
basing  point  system,  237. 
action  for  damages,  for,  331. 

^'UNIT  RULE,"  21. 

V 

VALUATION  OP  RAILROAD  PROPERTY— 

as  basis  for  fixing  rates,  168. 
the  unearned  increment,  169. 
investment  of  earnings,  170. 

VISITORIAL  POWER  (see  Corporations)  — 

State  has  exclusive  over  State  corporations.  67. 
Congress  has  over  federal  corporations,  69. 
Wabash  Railroad  v.  Illinois,  49. 

W 
WAGONS— 

transportation  by  not  subject  to  the  Act,  135. 

washi::gton  shingle  trust  case,  82,  439. 

WATER  transportation— 
not  subject  to  the  Act,  135. 

WEIGHT  OF  carloads— 

reasonable  regulations  respecting  not  undue  preference,  352. 

western  union  TEL.  CO.  VS.  CALL  PUB.  CO.,  46. 

WHARFAGE  RIGHTS— 
preference  in,  248. 

WHARVES,  REGULATION  OF  (see  Regulation  of  CoMiiERCE). 

WHEAT   (see  Differentials  in  Rate). 

WHITE  SLAVE  TRAFFIC,  7,  58. 

WHOLESALE  AND  RETAIL  RATES— 

in  freight  and  passenger  track  distinguished,  202,  203. 

WILD  GAME— 

as  subject  of  Interstate  commerce,  11. 


INDKX.  805 

[hIMKKKM  KS  ARK  TO  SIXTIONS.] 

WILD  GAWE— Continued. 

State  may  prohibit   liilling  with  intent  to  export,  11. 
reasons  for  the  rule,  11. 

WILSON  ORIGINAL  PACKAGE  BILL  OF  1S90— 
purpose  and  validity  of,  18. 
not  a  delegation  of  federal  power,  5G. 
meaning  of  term  "arrival."  18,  50. 

WITNESSES    (see  I.MMr.MTV,  Tkstimony,  Rules  of  Practice,  rule  12, 

page  CGO) — 
summoning  of,  under  section  12,  343,  345. 
attendance  and  testimony  of,  52,  343. 
production  of  documentary  evidence,  345,  348,  488. 
production  of  books,  34G,  3G2. 

self-incriminating  testimony,  the  compelling  of,  345,  488. 
penalties  for  refusing  to  testify,  extends  only  to  witness  personally, 

34G. 
corporations  not  included  in  immunity,  34G. 
probative  effect  of,  349. 

power  of  court  to  enforce  testimony  before  Commission,  351. 
relevancy  of  testimony  before  the  Commission,  352. 
Amendment  of  Feb.  11,  1893,  345. 
only  refers  to  testimony  before  the  Commission,  346. 
fees  of,  399. 

cannot  refuse  to  testify  on  ground  of  implicating  employer,  346. 
may  be  summoned  before  the  Commission  from  any  part  of  the 

United  States,  351. 
ininumity  extends  to  what,  346,  350. 
extends  only  to  subject  of  testimony,  350. 
limitation  of  power  of  Commission  to  enforce  testimony,  353. 
investigating  pow-er  of  Grand  Jury,  354. 

WRIT  OF  ERROR— 

to  highest  state  court  where  federal  right  denied,  117. 


LAW  tmRAHY 

UNIVERSITY  OF  CALIFORNU 

LOS  ANGELES 


If  i,fii  nui  I 


AA    000  742942 


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